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Tired of being in debt? Looking for a way, any way, out? By creatively cutting expenses, you can free up some extra money and put it toward debt repayment.
Here are six creative ways to pay off your debts sooner.
1. Rent your space.
Do you live in a condo or house in an in-demand area? If you have an extra parking spot, try renting it out for cheaper than parking garages or metered spot rates. You can advertise your parking spot on apps, such as SpotHero, or on Craigslist.
If you have extra space in your garage, someone may be willing to rent it to store their boat or vintage car.
“Try posting flyers around your neighbourhood to see if there’s any interest,” Seun Adeyemi, senior financial planner at SA Capital, said in an emailed response to questions. “You can also try advertising for free online.”
If you have an extra room in your home, you can advertise it on Airbnb or HomeAway. You can rent out your room for special events or even for someone moving to your area for a limited time, such as a medical student completing a few months of residency at a nearby hospital.
2. Donate plasma.
As the Canadian Blood Service says, “blood, it’s in you to give.” Not only can you help save a life, you may be paid for it.
Since plasma is in such high demand, some places offer compensation to encourage donors. Be sure to donate at a licensed and certified plasma collection centre.
3. Hold a yard sale.
It may not be the most creative way to earn some extra cash, but yard sales are still a great way to de-clutter your home (which can benefit your finances) and put some extra dough in your pocket.
“I like to use the ‘one year’ rule,” said Adeyemi. “If you haven’t used something in a year, it’s fair game to sell.”
Yard sales are ideal for bigger, bulkier items and clothing, which may be more difficult to sell online. The key to a successful yard sale is to ensure the items are neatly displayed and the prices are clearly marked.
Advertise your yard sale by posting flyers in your neighbourhood or host it on a day a street sale is taking place. Mark down prices in the afternoon for items not selling. You might even consider accepting plastic at your sale by using a Square attachment, or let customers transfer money to you via PayPal.
4. Sell valuable items online.
Before selling an item for a bargain-basement price at a yard sale, see if there’s a market for it online.
“If you have collectibles, such as comic books or hockey cards, it doesn’t hurt to see how much they’re selling for online,” Brenda Hiscock, certified financial planner at Objective Financial Partners, said in an emailed response to questions. “You might only sell a bundle of hockey cards for $5 at a garage sale, but you might be pleasantly surprised to learn that one card alone is worth $50 online.”
An added benefit to this is you won’t have to have valuables out in your yard in the middle of a hectic yard sale, where you might not be able to keep an eye on them.
5. Cash in gift cards and credit card rewards.
Instead of letting your gift cards and credit card rewards collect dust, redeem them.
Instead of using your card rewards for big-ticket items, use them to pay for your daily purchases, such as groceries, gas and clothing. Then, use the money you’d normally spend on your daily items to pay down debt.
If your rewards come in the form of cash back, cash them in and immediately put that money toward your debt. Better yet, see if your issuer will let you put the cash back toward your statement.
6. Negotiate.
Don’t be shy about asking for lower fees, rent or interest rates.
“Just because you’re paying bank fees of $15 per month or rent of $1,600 per month doesn’t mean it’s written in stone,” said Hiscock. “Negotiate with companies. There’s no harm in trying. The worst that they can say is no.”
If your bank isn’t willing to give you a break on fees, consider going elsewhere. The more competitive the industry, the better chance you have at saving money. The best part about this is that you may be able to save money without giving up the things that you love.
Speaking of negotiating, don’t be afraid to negotiate with creditors, either. You might be able to lower your interest rate, allowing you to repay your debt faster by paying less interest, and get on your way to being debt-free.
