Eight Big, Game-Changing Ideas to Finally Pay Off Your Credit Card Debt This Year – Part Two

If you thought we proposed some pretty big ideas to pay off your credit card debt this year in part one of this series, you ain’t seen nothin’ yet. We’ve saved our biggest, boldest, and most serious ideas for this article. If you’ve got thousands of dollars in credit card debt to pay down, you can’t waste your time with small ideas. You need to go big or go home, and that’s exactly what we’re serving up in this article. Here we go with four more big ideas to finally decimate your credit card debt, in addition to the four we covered in Part One.

1. Share a Car with Your Spouse

Yes, sharing a single car with your spouse could be a big life change (but we warned you, didn’t we?), and it certainly won’t work for everyone, but the idea is worth considering. Can you get up a little earlier to drop your husband off at work or stay a little later so he can pick you up? How about carpooling with co-workers when needed? On the weekends, you will just need to do a little planning and compromising to make sure your schedules don’t conflict, and there’s always Uber in a pinch. Is this worth the hassle? Think about how much you could make by selling one of your cars right now.

How would it feel to pay down your credit card with an extra $5,000 or $10,000 or $15,000? Now, add another $907 to your checking account. That’s the average amount of annual car insurance paid in 2014. You’re also likely to save another $2,000 – $3,000 in car repair bills each year. No more replacing bald tires or paying your yearly registration for the second car either.

2. Move

Oh yes, now we’re getting into the big cuts. If you are like most Americans, your biggest monthly expenditure is your rent or your mortgage. In fact, according to the Bureau of Labor Statistics, the average American spends over 26% of their income on housing. That percentage rises dramatically as your income goes down. Though it may seem like a huge step, ask yourself the question: Can I move? The answer is probably yes. Many of us never consider leaving our homes. We fall into inertia or into the false perception that our personal value is wedded to the amount of house we can afford. This leads many Americans to buy as much as the banks will allow, not what they can actually afford.

Think about it. Do you really need a three bedroom home or a two bedroom apartment? Moving from an apartment that costs you $1,500 a month to $1,250 a month or moving from a home worth $400,000 to $350,000 will save you roughly $3,000 a year, (assuming you get the same interest rate and 30-year loan on both homes). You may feel a little cramped the first month, but you’ll quickly get used to your new digs.

3. Rent Out a Room in Your Home

Not keen on giving up your dream home? That’s okay. Your home is an asset that will appreciate in value, so it could pay off in the long run to keep a more expensive property. However, this article is about paying off your credit card debt now, so why not use your house to generate income? If you have an extra room to spare, consider renting it out. There are plenty of websites that let you connect to potential renters, including college students or young professionals looking to save money on housing. It will be an adjustment to have a stranger in your house, but that person doesn’t have to be a stranger for long.

You might find it a fun experience to meet and learn about someone new. You may also want to consider renting a room as a vacation rental through a site like Airbnb, which will let you control when you have new people in your home. Rental rates vary greatly depending on your geographic location, the type of room you can offer, and the competitiveness of your local rental market. However, it isn’t unreasonable to charge $500 a month to rent a room in many suburban areas. Rents can go even higher in expensive housing markets. That could mean a cool $6,000 or more in your pocket each year and even a new friend.

4. Ask for a Raise or Get a Second Job

You can only cut so much from your spending until your quality of life really starts to suffer, and we don’t want that for you. At some point you’ll need to switch tactics from cutting expenses to looking at ways to increase your income. If appropriate, consider asking for a promotion or raise at work. Even a 10% raise on a $50,000 salary will net you a cool $5,000 a year (before taxes) for doing the same work. Just make sure to put the extra money you earn toward paying your debt instead of falling into the trap of lifestyle creep.

However, maybe your boss says no to the raise request or you know your company can’t afford to pay you more. At this point, it may be time to consider a second job. Sure, working on your weekends or at night is pretty miserable, but just doing it for a year can take you a long way toward helping you pay down your credit card debt. Even if you just work 15 hours a week for $15 an hour, you’ll earn $11,700 a year before taxes. That’s good money, right there.

You can probably easily find a low-paying job that won’t require much training, but also consider the possibility of using your unique skill set. What about consulting on the side, working for a startup that will give you flexible hours, or even starting your own gig doing anything, from reselling treasures you find at garage sales or using your passion for photography to snap pics at friends’ weddings and parties for a competitive price? If you can do what you love (or at least like) and make some extra money, it might not feel like work at all.

We promised you two articles filled with big suggestions on how to pay off your credit card debt, and we weren’t lying. If these ideas seem too extreme for you, then you may need to take a slower, steadier route to paying off your debt, such as giving up your $5 lattes each day. (Here’s an article with six savvy tips to spend less and save smart.) However, consider the possibility that you may also simply be scared to make a big change. We understand. Big changes are scary, but they also tend to net you the biggest results.

Try one big leap for three months, maybe our first suggestion of cutting up your credit cards. If you don’t like it after three months, you can always order new cards. We bet, however, that you’ll find that you can quickly adapt to these life changes, probably faster than you imagined.

Go big and remember what you’re fighting for. Paying off your credit card debt will give you great financial freedom and boost your credit score. That may mean letting you finally quit the job you hate, qualify for a mortgage so you can buy your first home, or finally spend money without the sinking feeling of dread knowing that you are only adding to your debt.  If you need even more inspiration, consider taking our 21-Day Debt Makeover Challenge or starting a local Money Club.

If you missed Part 1 of this article, click here.

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