Let's recap Jack's situation. He has 3 outstanding debts:
- Lowe's Credit Card, $550 balance, 18% APR, $15 per month minimum payment
- Student Loan, $6800 balance, 6% APR, $100 per month minimum payment
- Visa Credit Card, $2200 balance, 12% APR, 50 per month minimum payment
Using the debt snowball of paying off his bills in order from lowest balance to highest balance he'll first pay off the Lowe's Card, then Visa, then Student Loan. Using this approach Jack will be out of debt by February 2018. Can you believe that 6 years to pay off a total of $9550 + $2430.35 in interest. I don't know about you but that's unacceptable to me. Surely there's a way Jack can come up with some additional money to pay on his debts. Doing so will make a big, big difference as you'll see. Let's see what happens if Jack gets serious about paying off his debt and is able to apply an extra $5, $10, 15, $20, $25, $50, $75, $100 or even $200 per month extra towards his debt. How quickly can Jack get out of debt and move on to fully funding his emergency fund. The table below summaries each of these pay off options.
| Jack's Payoff Strategies | ||||
|---|---|---|---|---|
| Extra Amount | Pay Off Date | Total Interest Paid | Reduction in Payoff Time | Interest Saved |
| 0 | Feb 2018 | 2430.35 | 0 | 0 |
| 5 | Nov 2017 | 2265.89 | 1 year 1 month | 227 |
| 10 | Aug 2017 | 2138.63 | 1 year 4 months | 355 |
| 15 | Jun 2017 | 2032.15 | 1 year 6 months | 461 |
| 20 | Apr 2017 | 1939.66 | 1 year 8 months | 554 |
| 25 | Feb 2017 | 1857.69 | 1 year 10 months | 636 |
| 50 | May 2016 | 1548.23 | 2 years 7 months | 945 |
| 75 | Nov 2015 | 1336.39 | 3 years 1 month | 1157 |
| 100 | Jun 2015 | 1179.41 | 3 years 6 months | 1314 |
| 200 | Jun 2014 | 811.92 | 4 years 6 months | 1681 |
Let's take a look at the table and see what we can learn from it. We already know that using the debt snowball and paying off stuff in a specific order will get us out of debt faster than just paying minimums and not rolling the money over towards other debts. But look at the difference that an extra $5.00 per month makes. Isn't getting out of debt an entire year sooner worth $5.00 a month? Who couldn't manage to come up with 17 cents per day. As you can see an extra $5.00 is good and $10 gets better and so on. There are lots of ways to come up with some extra money for making additional payments on your debt. I'll share two of them that I'm using right now.
Selling Books on Half.com - If you're like me you may have a book case full of books that you've read once and oneday may read again, right? I was holding on to several books that fell into that category but these days with being able to read books on eReaders such as the Amazon Kindle Fire or the iPad or even your desktop/laptop computer hanging on to print books just didn't make a whole lot of sense. I decided to pull all books except those that I really, really wanted to keep and check to see what I might be able to sell them for on Half.com. I started typing in the ISBN for each book and in some cases I was disappointed to see that several people had the very same book listed for only 75 cents. When I saw a case like that I decided to put the book into the "donate to library" stack and moved on to the next one. As I was checking books I discovered that people can put in pre-orders on half.com. I don't know how long that feature has been in place but I decided to take advantage of it. The way it works is when you check the book and someone has placed a pre-order for it you'll get a notice that buyer XXX is willing to buy the book for $xx.00 and if you're willing to sell your book at that price you can sell it to that buyer right away without completing the listing process. To me that's a pretty cool feature. As it turned out I had 4 books that people had placed pre-orders for so I was able to sell 4 books instantly! I worked my way through the books and listed several and have sold two additional books so far. We also cleared out lots of space on the book shelf that we'll be turning into a big picture frame to hold pictures we want to print and frame. With very little effort I was able to make an extra $50 to pay towards our debt. As soon as Half pays me that's what I'll do with the money. Pay it towards debt.
Selling Stuff on eBay.com - Books have been written on how to get rich on eBay. I'm not here to tell you how to do that because I don't know how to do it :). I will tell you though that you can pick up some extra cash by selling stuff on eBay. While we were going through the books we found other stuff that had been sitting on the shelf for a long time. Since we weren't using it and didn't see us using it anytime soon we listed it on eBay. What I do when I list something on eBay is start it at 99 cents and no reserve. There are exceptions, of course, such as a high end camera lens I currently have listed. While I don't use it and am willing to sell it I'm not willing to give it away. The other stuff though, if I can get 99 cents for it I'd rather have that than the item taking up room in my house. Currently I have 9 items listed on eBay and as of the time I'm writing this 6 of them will sell for approximately $70.00. I expect this figure to go up before the auctions are over. I'll post a follow up and let you know how things actually turned out.
If you put you mind to it you can easily find extra money to help you get your debts knocked off. Hopefully this post will motivate you to find some extra cash. Good luck!
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