Money Relationship » Debt

Spring Cleaning = Cash

Adam — Thu, 08 Jul 2010 14:00:39 +0000

I know what you are thinking, “This guy is crazy, spring is over!” Well, spring cleaning can come late for some people, especially procrastinators like me (and possibly you).

When I talk about spring cleaning, I am specifically referring to selling some of the junk that you don’t use. As you are cleaning up around the house and digging in places that haven’t seen the light of day in over a year, you are bound to find some stuff to sell.

A few weeks ago, my wife and I decided to do a little spring cleaning ourselves. Needless to say, I was very surprised at the amount of stuff that I found that could net us some quick cash. Here is a quick list of some things I found (and forgot that I had) and how much they will net us:

Laptop computer - $200
Mac desktop computer – $100
Various textbooks – $200
Various software – $50

Doing that math, that adds up to over $500 that can be used towards our debt. Not too shabby for a days worth of cleaning!

So, now that you are soooo excited about cleaning and finding things to sell, how do you go about selling them? Well, here are a few options for getting rid of your junk and getting top dollar.

Amazon.com

Amazon.com is a great place to sell books, CD’s, software and more. I placed the textbooks and software on Amazon and sold the majority of it in a week. They get tons of traffic and people are always looking to get a great deal.

When I sell things on Amazon, I always list them for a lower price than anyone else in the same category (new, like new, good). For example, if I have a book that is like new and the lowest price in that category is $54.99, I will list mine for $49.99. I don’t really maximize my earnings but I can almost guarantee that it will sell FAST. That was my main motivation as I received the cash quicker and I got the junk out of the house faster.

The only thing that I don’t like about Amazon is the fact that they decide what to pay you for shipping. For example, if the buyer selects standard shipping, Amazon will reimburse you $3.99. That’s it. So, if you need to buy a bubble mailer and then ship the item across the country the cheapest way possible, you are more than likely going to spend in excess of $3.99.

eBay

eBay is a great place to sell larger more expensive items that can be shipped easily. I typically use them for smaller electronics (cameras, laptops, cell phones) and collectibles. I don’t really have any collectibles but some of you might. I will be putting the computer up for bid starting Friday. I’ve always had success selling on eBay and I typically yield better results than the average seller.

I’m not really going to tell you how to set up an eBay account, so here is a nice tutorial from eBay. Don’t be afraid to sell you items on the site as you can get GREAT results!

Craigslist

Craigslist is a site where individuals can list items for sale (just like the classifieds, except free) in a city near you. For example, I could list items for sale on a DC, Annapolis or Baltimore site. Having a local site makes it a great place to sell items that are just too large to ship. We have bought and sold several pieces of furniture on the site with great success. If you happen to find an old car during your spring cleaning, you can even sell that on Craigslist.

The only word of caution that I have is to just be careful. Make sure you call about the product first and ask for directions. You want to make sure you are going to be in a nice neighborhood. It’s also a good idea to take someone with you to check out items. You can never be too cautious!

Yard/Garage Sale

We don’t have enough junk (or a yard) to have a yard/garage sale but I imagine many of you do. These would be a great place to sell the odds and ends that aren’t good enough to make the cut on the other websites that I listed. A list of things to sell could be clothes, dishes, small appliances, etc. They don’t fetch top dollar but you can at least get something out of them. The main purpose in selling these items should be to just get it out of your house. I would take almost any deal if it meant removing it from the mass clutter that is my apartment.

Frugal Dad has a great post on how to have a successful yard/garage sale. The only other thing that I would recommend would be to have it when everyone else in the community is having one. You will get a lot more traffic if you plan it around that schedule.

Donate It

For all of the leftover things, you can donate them to charity. I typically just go to the local Goodwill store and drop the stuff off.

I know, you can’t really get “cash” for donating goods. However, you can get a tax deduction if you itemize on your tax return. Just make sure you get something in writing from an individual who works there detailing what you donated. You will also want to make a spreadsheet showing the fair-market-value of each item you donate.

Once again, the main goal in this section should be to just get it out of the house. If it’s in too bad of shape for even Goodwill, it’s time to just throw it away.

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I hope these tips help you get some quick cash to pay on debt!

Spring Cleaning = Cash

Debt Update: Two Months Combined

Adam — Tue, 06 Jul 2010 14:00:20 +0000

Yeah, yeah. I know I’m a month behind. Doesn’t that make this more exciting though?

Well, the last two months for us were full of financial surprises. We paid for a graduate class, had our tires replaced, blah, blah, blah. It seems to be getting a little old if you ask me. I just want things to go as planned!

Even with all of these “extra expenses” we are still able to pay all of our debts (at least the minimum). We just aren’t able to get that extra snowball going the way we would like. July is looking good but heck, it’s only the beginning of the month. What can I say, I’m not perfect.

This month I changed the graph up a little. You can now see what our actual payments are per month. They are listed as “Actual Payments”. The number below that one is the actual change in the balances for the month. By listing them that way, I can now see how much interest I am paying per month by subtracting the change from the actual payment amount. Let me tell you something, actually looking at how much interest I am paying makes me sick.

Here is a quick snapshot after the last two months:

Hopefully July will be much better!

Debt Update: Two Months Combined

Perfection Doesn’t Exist

Adam — Tue, 29 Jun 2010 12:00:04 +0000

Perfection is something that I thought could be obtained in some way. Actually, it almost caused me to quit writing this blog.

One of the reasons that I blogged so infrequently was because I was always trying to create the “perfect” blog post. Well, I’m here to tell you that perfection does not exist. It doesn’t exist in life, blogging and even finances.

“Once you accept the fact that you’re not perfect, then you develop some confidence.” ~ Rosalynn Carter

For as long as I can remember, I’ve always wanted to create the perfect blog post, have it quoted on various websites and have someone hand me a trophy (well, not really). You know what, that mentality caused me to not write at all! Pretty weird right? I wanted to be one of the best bloggers I could, yet I didn’t write. Makes a ton of sense! Seeking the unattainable caused me to not want to attain it.

Well, I am here to tell you that I am no longer seeking perfection. I won’t be seeking it with my writing or our finances. No more excuses. It’s just too stressful and unproductive. I’ve accepted the fact that I am not perfect and now I am going to build some confidence.

Enough about my life. So, how can you turn your finances around without seeking perfection?

Set Attainable Goals

If you have debt and finally come to the realization that it’s bad, you’re going to want to pay it all off in a hurry. Hell, when we first starting paying off our 150k, I was looking for the cure all medicine that could take care of the problem immediately. I wanted if gone, fast.

Unfortunately, you need to realize that there isn’t a magic debt elimination pill and it’s going to be a long and rough road. In order to make it easier, you need to set some attainable goals. Dave Ramsey tells you to list your debts from smallest to largest and then start working on the smallest of the bunch. That will allow you to reach certain financial victories much faster and it will give you some much needed confidence.

Reward Yourself Every Now and Then

When you do something awesome, reward yourself. I’m not talking about taking a trip to Hawaii here, but go out to eat with your spouse or catch a movie. My wife and I do this frequently due to the fact that we have so much debt. If we just sat on our asses all day every day watching our debt slowly go down, we would go insane. Sometimes you just need that interaction that getting out of the house does for you.

Another great tip would be to visualize the reward. If you have a special treat in mind, print out a picture and hang it on your fridge. Seeing it everyday will cause you to go that extra mile to save a few bucks here and there.

Follow People Just Like You

If I had to guess, I would say that most of you have some debt. It’s probably not 150k like us, but it feels like a lot nonetheless. Subscribing to blogs, going to Financial Peace classes and commenting on websites are great ways to get an extra boost in you financial plan. If you just sit on your butt and do nothing, you are doomed and won’t make any progress.

You’re doing the right thing subscribing to this blog. I hope that what my wife and I do financially helps you get through your troubles. Our ability to pay off debt should give you a ton of encouragement in your financial life. Just stick with it and you will see amazing results!

Perfection Doesn’t Exist

The Root of Our Money Problems

Adam — Mon, 14 Jun 2010 12:00:24 +0000

We finally found the root of our money problems. Want to know what it is? According to my wife, it’s me.

When she said that in the car to me the other night, I laughed it off. But as I sat there and thought about it, she was absolutely right. I brought the most debt into the marriage and I probably would still be racking it up if I wasn’t with my wife. I was the most reckless with money before we got married.

But there are still things I do today that damage our finances. For one, I always seem to suggest eating out. Actually, my wife said “I was the problem” after I suggested grabbing something quick to eat. We have a ton of food at home and yet I always seem to want to eat out no matter where we are. What the heck is wrong with me? I really want to be debt free and yet I always want to spend.

I mentioned before that we want to still enjoy some “finer things” while getting out of debt. We would like to eat out once or twice a month and go to the movies occasionally. It just helps us from going insane. However, I have taken the eating out to an extreme. If I had to guess, I would say we ate out about a dozen times in May. Most were the fast food variety but still expensive none the least. About 90% of those occurrences were my idea.

I guess you could say that I have been a big consumer for most of my life. I grew up on a family farm and started earning fairly good money (for a kid) by the age of 10. I did what most kids would do at that age with money. I spent it and I spent it ALL. However, I earned way more than most kids my age and I got to buy the more expensive items that many other kids only dreamed about or begged their parents for. Life was good.

What I guess I am trying to say is that old habits die hard. I would imagine that many of you are having this same problem. It’s hard to go from one extreme to the next and I’m finding that out that hard way. I once spent with wreckless abandon and now I am trying to pinch every penny. Life is hard.

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What would you say has been the toughest for you? Cutting spending? Setting up a budget? Opening up the lines of communication between you and your spouse?

The Root of Our Money Problems

Debt Update: Finally Settling Down

Adam — Thu, 06 May 2010 12:00:25 +0000

Phew, what a month. I moved (sort of), started a new job (kinda) and became a full-time husband (finally). So financially, it wasn’t the most amazing month ever but it was still good. I received my first new paycheck and my pay jumped up about $80 for the two weeks. Anything helps, especially now we are used to living on the lower income.

Looking ahead, May should be a good month for us. We get an extra paycheck due to how the paydays fall and the increase in my paycheck should help. Here is how we did for April!

Debt Update: Finally Settling Down

Debt Update: Another One Bites the Dust!

Adam — Thu, 01 Apr 2010 10:00:44 +0000

March was another good month for us in terms of debt reduction. We were able to pay off the personal loan and send some more money to our family member loan. In all, we paid off $2,139.82 in March. Not too bad at all!

This is the month I start my new job and where we really start attacking out debt. We will not longer have higher grocery bills, two rent payments, etc. My salary is also going to increase this month!

With all of those factors considered, I am anticipating our debt snowball (amount over the minimum payments) to average about $1,500 a month. That should help us get that family loan done in less than 1 year. We can’t wait!

Here is our updated debt spreadsheet:

Debt Update: Another One Bites the Dust!

Use Your Credit Card as an Emergency Fund?

Adam — Tue, 30 Mar 2010 10:00:12 +0000

A few months back when I wrote about how our small emergency fund saved us, No Debt Guy commented on how having an emergency fund in cash may be counterproductive. Here is what he said:

I have often wondered if having an emergency fund is the best way to pay off debt or is it counter productive?

For example if you are carrying at credit card balance of $2,500 and have $2,500 in your emergency fund you would be better off paying off your credit card and rebuilding your emergency fund.

What if you have an emergency? You can still take a cash advance from your credit card and you are no further ahead.

This does take some serious discipline, but you will save interest costs.

He does make some interesting points. However, I feel that one needs to be SUPER cautious with that type of system.

Most of you are probably in some type of debt. It’s why you’re here. You’ve probably overspent with credit cards and bought things that you didn’t need. I know I have. So, shouldn’t your main goal to be rid of credit cards forever? Like Dave Ramsey often says, “no one EVER told me they got rich by using credit cards”. I have to agree with that point. When I was using my credit card that gave me cash back, all I could think about was hitting that $50 mark so they could send me a check. So, I would spend more money to earn 1%-3% back. Talk about counterproductive! There was no way I was going to get rich by playing that stupid game.

So, I figured I would come up with a few reasons why it may be counterproductive to use a credit card (or any other line of credit) as an emergency fund. Here are some things to consider:

You May Redefine What an Emergency Is

It’s been said before that using a credit card makes you susceptible to spending more. So, wouldn’t using your credit card for an emergency be the same thing? If you car breaks down and you only have $1,000 to fix the problem, wouldn’t you shop around? I know I would. However, if I were using a credit card I would be more likely to just give in to the initial price and pay it. It’s only on a credit card, right?

I think you may also redefine what an emergency fund is. For example, would you typically use your cash emergency fund to pick up a small amount of groceries if you are out of grocery money for the month? Probably not. But if you have that credit card to fall back on, you might just head to the store when you may have some things to eat at home. If you are like me, you would probably pick up more items too!

You’ll Miss the Experience of Paying With Cash

Most people say that it’s harder parting with cash than it is using a credit card. I’m a little more skeptical but I still think it’s true. However, I think having a cash emergency fund makes you learn to handle money better. I mean, you got into credit card debt by using credit cards. How is still using a credit card in emergencies going to make you any better at handling money?

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Personally, I love having a cash reserve. It just makes me sleep better at night knowing that I can actually hand someone cash if I have a financial emergency. Handing them a piece of plastic would be much harder to handle knowing what I’ve been through financially.

How about you? Cash or credit?

Use Your Credit Card as an Emergency Fund?

Debt Update: February 28, 2010

Adam — Wed, 03 Mar 2010 13:00:56 +0000

February was a short month in terms of days but a big month for debt repayment. We managed to eliminate $2,532.86, our biggest month ever! This was in addition to replenishing our emergency fund (about $800) that was depleted from paying some estimated taxes in January. We feel great about what we were able to accomplish this month. It’s even more uplifting knowing that in the next few months, our income is going up and our expenses are going down thanks to the new job.

We were able to pay a big chunk on the personal loan in February and by this time next month, it will be gone. We also started paying on the family loan for personal reasons. We just wanted to get started on it and the family member could also use the money due to some unforeseen circumstances. Another great reason not to get into a family loan. Now onto the spreadsheet!

Debt Update: February 28, 2010

Debt Update: January 31, 2010

Adam — Wed, 03 Feb 2010 11:00:07 +0000

January was a fairly good month for us. Even after depleting our emergency fund and them pumping it back up to $1,000, we were still able to pay off over $1,400 in debt. Also, keep in mind that the $1,400 we paid off is only the reduction of principal and doesn’t count the interest we paid. So technically, we are making over $2,000 worth of debt payments per month.

For those of you who don’t read my weekly article over at Frugal Dad, I recently announced that I got a new job in Washington, DC. The job doesn’t start until mid-April, but it will be a HUGE income boost for us. This new job will increase our income by approximately $4,000. I will be doing the same job but since I will now work in Washington, I get a cost-of-living pay increase. Another great thing about the new job is that we will no longer have to pay rent in Pennsylvania. The new job will help us cut our expenses by $4,800!

Since we have already been living on less than we make, ALL of these new earnings and savings will be put towards debt. That is an $8,800 new shovel! It will feel great knowing that we will be able to pay things off almost twice as fast.

Anyway, here is what we paid off for January:

Debt Update: January 31, 2010

Why I Don’t Stress About My $23,000 Pile Of Debt

Adam — Wed, 13 Jan 2010 11:00:58 +0000

The following is a guest post Daniel Packer from Sweating the Big Stuff. Be sure to check out his site!

I’m in quite a bit of debt, but it doesn’t really bother me. I know that I won’t be getting out any time soon, but I’m ok with it. I don’t need to worry, I don’t need to make drastic changes to my life, and I don’t need to take a second job. Why?

I Have a Plan

I have a budget and I know that I’ll be paying off this pile of debt for the next few years, but my plan is to have a positive net income in 18 months. If I continue to save and pay off loans at my current rate, I’ll creep into positive territory around July 2011. I am responsible and know that I need to save before I spend, and this has allowed me to tackle my debt slowly but surely. I don’t feel overwhelmed because I know that I will eventually dig my way out of debt. If I stick to my plan, what do I have to be worried about?

I Live a Decent Quality of Life

Since graduating from college in May, I have slowly weaned myself off of my pasta and grilled cheese diet. I spend some money on fun experiences with friends, and eat out occasionally. I am not depriving myself from having fun, and am able to enjoy myself despite being on a strict savings plan. Since I don’t feel like my debt is weighing me down, I don’t stress over it.

I Automatically Save and Pay Off My Loans

I set up my finances to be on auto-pilot. I don’t need to constantly look at my checking account to see if there is enough money to pay the bills. After my paycheck gets deposited, money is automatically transferred to my various accounts – savings, investing, loans, etc. I never really see this money in my checking account and have learned to live on about half of my take-home income. Automatic bill-pay lets me relax while knowing that my bills will be paid on time without even having to push a button.

I Knew What I Was Getting Myself Into

In deciding to go to college, I made a decision to pay for it afterward. These loans average about 2.8%, which is nothing compared to some credit card rates. As the economy improves, the rates will increase, but by the time that happens, I will have cut off a large chunk of the debt. I don’t regret getting myself into this situation, and if I could do it again, I would make the same decisions.

I’ve read a lot about how finances can affect people physically and emotionally, and I know how easy it is to be stressed about our financial situations. There have been times when the simple decision of whether or not to buy a candy bar from CVS has make me stress out. Take time to make a plan and you’ll be able to relax, spend a lot less time worrying about that candy bar, and focus on the things that matter.

Why I Don’t Stress About My $23,000 Pile Of Debt