Debt and Getting Debt Free

My desire to become debt-free led me to start this personal finance blog. My main goal is to be financially independent and with luck leave something behind for my children and grandchildren. but just not costing them money to support me would be ok.

Money has always been a problem for me, but I haven’t always had it or spent it wisely. Ihave struggled to make ends meet and have had to make difficult financial decisions. I’ve made past mistakes with money and learned from them.

Luckily I have made some wise financial decisions, such as saving for retirement and investing in assets that have appreciated over time. These experiences have motivated me to pursue financial independence and continue to make smart choices with her money.

Major Financial Happenings in my lifetime – or why it’s Important to be flexible

1987 – Black Monday: The stock market crash on October 19, 1987, saw the Dow Jones Industrial Average drop 22.6% in a single day.

1991 – The fall of the Soviet Union: The collapse of the Soviet Union had a major impact on the global economy, including changes in trade and investment patterns.

1997 – Asian financial crisis: A financial crisis began in Asia, starting in Thailand, which led to widespread economic turmoil across the region.

2000 – Dot-com bubble: The burst of the dot-com bubble saw the stock market decline sharply after a period of speculative investing in internet-related companies.

2007-2008 – Global financial crisis: A widespread financial crisis began in the United States, triggered by the subprime mortgage crisis and the collapse of several major banks and financial institutions.

2010 – European debt crisis: Several European countries faced significant debt problems, leading to fears of a collapse of the Eurozone.

2020 – COVID-19 pandemic: The COVID-19 pandemic had a major impact on the global economy, leading to widespread business closures, job losses, and economic uncertainty.

Each of these events caused me and most people some financial loss, sometimes just lost investments, other time loss of jobs or homes. In my case the great recession resulted in taking on a debt to cover losses that I’m still paying off. Maybe some cirecumstance has caused something similair in your life, a loan for college, an updie down mortgage, etc?

Creative Ways to Get Out fo Debt

While there is no magical solution to getting out of debt, here are some unusual and creative ways to help you pay off your debt:

  1. Rent out a room in your home: If you have an extra room in your home, consider renting it out on a short-term or long-term basis. This can provide you with extra income to pay down your debt.
  2. Sell unused items: Look around your home for items that you no longer use or need, such as clothes, furniture, or electronics. Sell them online or at a garage sale to generate extra cash.
  3. Participate in online surveys: There are websites that pay you to participate in online surveys or complete other small tasks. While the payouts are usually small, they can add up over time and help you pay down your debt.
  4. Rent out your car: If you have a car that you don’t use often, consider renting it out on a peer-to-peer car rental platform. This can provide you with extra income while your car is not in use.
  5. Do odd jobs: Look for odd jobs in your community, such as dog walking, lawn mowing, or snow shoveling. These can be a good source of extra income and can help you pay down your debt.
  6. Start a side hustle: Consider starting a side business or freelance work to generate extra income. This can be anything from selling handmade crafts online to providing consulting services in your area of expertise.

While some of these methods may not be sustainable in the long run, they can help you generate extra income and pay down your debt in the short term. It’s important to also focus on reducing your expenses and making changes to your lifestyle to avoid accumulating more debt in the future.

More Traditional Ways to get out of Debt

  1. Create a budget: Start by reviewing your income and expenses and creating a budget that allows you to live within your means. Focus on reducing unnecessary expenses and finding ways to increase your income.
  2. Prioritize debt payments: Make a list of all your debts and prioritize them based on interest rates, due dates, and other factors. Then, focus on paying off the debt with the highest interest rate first, while making minimum payments on the other debts.
  3. Consider consolidation: If you have multiple debts with high-interest rates, consider consolidating them into one lower-interest loan. This can make it easier to manage your debt and reduce the amount of interest you pay.
  4. Negotiate with creditors: If you’re struggling to make payments, contact your creditors and explain your situation. They may be willing to work with you to create a more manageable payment plan.
  5. Consider a debt management program: A debt management program can help you consolidate your debts and make one monthly payment to a credit counseling agency. They will work with your creditors to negotiate lower interest rates and a more manageable payment plan.
  6. Seek professional help: If you’re struggling to get out of debt, consider seeking help from a financial advisor, credit counselor, or bankruptcy attorney. They can help you create a plan to get out of debt and achieve financial stability.

Remember, getting out of debt is a process that takes time and effort. It’s important to stay committed to your goals and make changes to your lifestyle and spending habits to avoid accumulating more debt in the future.

Debt as a Positive thing in Your Life

Debt can be a positive thing in certain circumstances, such as:

  1. Investing in education: Taking out student loans to invest in education can increase your earning potential and help you achieve your career goals. While student loan debt can be overwhelming, the long-term benefits of higher education often outweigh the costs.
  2. Starting a business: Taking out a loan to start a business can help you achieve financial independence and build wealth over time. However, it’s important to have a solid business plan and a clear understanding of the risks involved.
  3. Buying a home: Taking out a mortgage to buy a home can be a good investment, especially if property values in your area are likely to increase over time. Additionally, owning a home can provide stability and financial security for you and your family.
  4. Making necessary purchases: In some cases, taking out debt to make necessary purchases, such as a car or home repairs, can be a wise decision. However, it’s important to carefully consider the terms of the loan and ensure that you can afford the payments.

It’s important to remember that debt should be used wisely and in moderation. Before taking out debt, it’s important to carefully consider the risks and benefits and ensure that you have a plan for paying it back.