One of our goals this year was to pay down our large credit card debit. While my husband and I typically don't use credit cards to finance a huge purchase, an emergency emptied our savings account last summer and forced us to put $25,000 worth of repairs on credit.
Half of this debt we recently were able to roll into a low interest home mortgage refinance. The other half of the credit debt we've been paying off by working harder and spending less. In under six months, we were able to reduce our remaining credit card debt by nearly $8,000. Here's how.
Spending freeze. Saving money starts by not spending it. Aside from the "must have" essentials (food, gas, utilities, medical etc), we halted all spending on January 1 and have been diverting the savings into debt reduction ever since. The money saved here was funneled directly to the credit card.
Worked over time. When my husband was given the choice to outsource a project he was working on or work overtime this winter, he choose the overtime option. The extra work brought nearly $5000 into our household that was used for debt reduction too.
Ebay. A relative who was interesting earning quick cash asked if I would list some of her items on eBay for a commission. I earned nearly $1000 in commissions selling some of her things and picked up an extra $400 selling a few odds & ends around the house I no longer needed. All this cash went to lowering our credit card debt as well.
Moonlighting. Some call it moonlighting, I call it "scrounging for cash". Since last winter, we've been keeping our eyes open for additional ways to earn a bit of extra cash. We've been selling eggs, hauling trash to the dump for a family business, managing a small tenant improvement in a commercial building, consigning gently used clothes, sewing and taking on other small tasks that put an additional $2000 into our pocket this winter.
All these strategies made it possible to pay down $8,000 of credit card debt while simultaneously rebuilding our emergency savings account to the tune of about $4000. It was certainly hard work but worth the peace of mind to know that our household finances are finally moving in the right direction.
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- Banking & Budgeting
- credit card debt
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