Your car, credit card and store accounts - no matter how much money you throw at it your debt just doesn’t seem to be decreasing and creditors are starting to send you threatening letters. If this sounds familiar, don’t despair just yet.
People the world over have resorted to the extraordinary in a desperate attempt to deal with their debt and in some cases they were successful. A common thread seems to be finding a way to save on accommodation and food costs so that you have more disposable income to reduce your debt. We rounded up some of the more interesting and amazing things people have done to get out of debt:
Moved to Alaska and took on odd jobs American, Ken Ilgunas, graduated with $32 000 (R339 523) worth of student debt. Although he had a degree under his belt, he was unable to find a job as a journalist and decided to move to Alaska where he took on camp jobs. One of his jobs involved working at a truck stop where he received free food and accommodation. This allowed him to channel all his earnings toward his debt and he was able to pay it off in just two and a half years!
Join a marine shipAnother American, who did not want to reveal her name, was facing $25 000 (R265 430) in credit card debt. She eliminated her accommodation and grocery costs as well as her utility bills by accepting a job as a crew member on a marine cargo ship.
Rent out your homeIf you have a large enough home with a granny cottage, you could rent out the main house while you live in the granny cottage or even rent out a room in your house or flat. Eric Chapman, a housing counsellor in Atlanta had a client who got divorced, lost his job and fell behind on his credit card payments. He decided to rent out his home and moved into a shed on his property in order to gain rental income and reduce his expenses at the same time.
Couch-surfNikki Yeager couch-surfed for a full year in order to save on her accommodation costs. She repaid her hosts by carrying out odd jobs around the house such as fixing drains or walking the dog. Couch-surfing is typically a cheap, inexpensive way to travel by simply sleeping on someone’s couch instead of renting a hotel room.
Other ideas you can use to pay off a mountain of debt include:
Work as an expatIf you have the right skills, you can find a high-paying job as an expat in a tax-free zone such as Dubai or a tax-friendly zone such as Mauritius where you pay a flat tax of 15% regardless of how much you earn. Scan international job listings to find out what skills are required. Often these posts offer accommodation, a living out allowance and cover your travel costs.
DownsizingIf you are lucky enough to live in a two-income household, reduce your expenses so that you only live off one salary and use the second salary to first pay off your debt and then to build up a savings and investment portfolio. Building up your savings with the second income will also mean that you can build up an emergency fund.
If you are single, you can still downgrade and cut costs where possible to put aside more money for debt repayments. Shaving small expenses can add up to a saving force to be reckoned with.
Final wordTackling your debt doesn’t have to be as drastic as the ideas outlined above. If your debt is still manageable, put a simple plan in place for paying it off. You should prioritise it in terms of the highest interest-bearing debt. Note that once you pay off one creditor, for example a clothing account, then the money you would have paid towards that instalment should be added to the next creditor on your list, such as your credit card.
“The only way you will ever take permanent financial control of your life is to dig deep and fix the root problem”. – Suze Orman