Side Hustle Your Way Out of Credit Card Debt

When it comes to beating debt once and for all to become financially independent, there are really only two options:

1 – Lower your spending habits as drastically as you can
2 – Earn more money

While there is A LOT most people can do to lower their spending habits (Especially true in the United States, where spending is literally a fun hobby some people seem to have), you will get out of debt way quicker if you combine #1 with #2.

credit-cardsI am going provide a small list of what we call “side hustles”. These are just various things you can do on top of your current job that you have. Some of these will not work in your situation, but similar to our 4 methods of frugality, these strategies or side hustles will work for almost everyone out there trying to curb their bad (and sometimes addictive) debt habits.

Let’s dive in, shall we?

Side Hustles to Overcome Debt

1 – Second Part Time Job

This is the easiest strategy for most people. Even a minimum wage job can significantly increase your ability to pay off debt quicker and faster. For instance, a minimum wage job at Mcdonalds in Alaska (where I am) pays $10 an hour.

20 hours a week that is $200, or $600 a month that can all be paid towards debt. An extra $600 to paying off debt can go a long, long ways.

2 – Sell Old Stuff

Common wisdom. Hold a garage sale with all of your old valuables you no longer need. You will lift a great mental weight off your head and you will also earn some extra money you can pocket towards paying down your debt.

Even better than a garage sale is to list them on ebay, that way it takes less time and you will often get better deals from people bidding on the items. Also, craigslist is a good alternative for selling old stuff that you no longer need.

3 – Become a Freelancer on a Freelancer Website
Freelancing is a fantastic way to make money on the side. It is basically a telecommute, work wherever you want, kind of position. Unlike a second job or selling old stuff, you can make some serious money with freelancing.

What could you do as a freelancer? Well, what are your skills?

Are you a good writer? If so, there are worlds of opportunity open to you in the fields of content creation and copywriting. What about photoshop? Graphic design?

A good website to check out to browse different skills that people are buying online to see if you have any is Upwork.com.

4 – Create a Website

While it takes more effort than the other items listed above, this is perhaps the greatest route to clearing out your debt. Create a “niche” website about something and monetize the website using something like Amazon’s affiliate program.

I have literally seen websites about blenders making $3,000 a month. Learn this skill successfully, and an entire new lucrative profession will open up for you as you kill off your debt once and for all.

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The Frugal Strategy to Buying Homes

Purchasing a house is typically the largest investment any one person makes in their life. Houses can cost tens to hundreds of thousands of dollars depending on where you live, where the house is located within the city and what the house actually is.

However, before diving head first into purchasing a home just because a realtor or mortgage agent friend of yours is urging you to, it is time to make a little checklist to see if buying a house is really for you.

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First things first, do you really want to own a house?

It is a lot of responsibility.

Unlike renting an apartment or townhome, you will be responsible for everything. If your furnace goes out, there goes $8,000 dollars right there to go and fix it (potentially). Garage door breaks? Yup, you called it, you have to fix it with your own money and time.

You cannot just get up and leave either if you are a fan of traveling.

In order to do that you will either need to sell off your house (which is a whole process in of itself), or you will need to have rental company to rent it out for you while you are gone. Unless of course you can find some tenants that are really something special that are going to pay you on time (be careful doing this though).

Alright, all that being said, there is a lot of benefits to owning your own chunk of land. For instance, you are going to build equity in your house. Rental money, while it is not exactly throwing money away, is never going to turn anything into an investment for you.

Over the long haul, your house can be used as a tool to further generate wealth on your behalf.

So how do we get into buying one where our mortgage payments are as cheap as possible?

First of all, save up a bigger down payment. The bigger your down payment, the less you will need to borrow money and the less you will have to pay in your monthly mortgage. This great, because ultimately you will be doing two things: learning how to save money, and paying far less in interest payments.

Second, start building a good credit rating now not when you are ready to apply for the home loan. Also, do not go out and start buying new cars or opening up new credit cards or taking on new debt during the actual mortgage application.

My father is a real estate agent, and I can tell you from first hand experience more young first time home buyers screw this up more than anything else. They could had gotten approved for a super nice house that would appreciate year after year, but instead they bought a brand new car where the majority of its value depreciates the moment it rolls off the lot.

Follow these two rules: save for a bigger down payment and build good credit.

If you do, it will save you a significant amount of money in the long haul and also it will make the often frustrating and confusing world of buying homes into a much simpler, smoother process for you.

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4 Ways to Be More Frugal

As people rage against their amassed debt, it makes sense that people will also start searching for possible solutions to rid themselves of their debt once and for all. It makes sense. Raging against your debt or poor choices with money will only go so far, if you want to get out from underneath that feeling of overwhelm then you need to start proactively employing solutions that work out on your behalf in a positive way.

One of the best ways to get rid of debt is simply spending less. This is known as being frugal, and frugality is pretty fun when you start figuring out all the ways you can start saving money.

Now this list will not apply to everyone, but this list will help the majority of people save in a few areas of their lives and might be things they never actually thought about doing.

I hope you enjoy this list of frugality, and hopefully it will even spark a brainstorm for you in other ways you can save and grow your money.

That being said, shall we dive in?

4 Methods to Better Frugality

1 – Ride a Bike Everywhere!

Bicycling can be a huge money saver, also it acts as a bit of cardio for you so you can forego the expensive gym membership. (Think $30 a month for a gym isn’t bad? That is $360 a year! Most people would never pay for a gym membership if they had to buy it annually, yet they’ll lounge around and never going to the gym while continually paying that $30 per a month for years).

Instead of taking a short drive to pick up groceries, make it a goal to only walk or bicycle there. Then ask yourself where are others places you could use your bike instead of your car? Work? Going to visit friends?

Your wallet will thank you and so will your body.

2 – Quit Smoking

Not everyone is a smoker, but smoking is an expensive habit in the now and in the later. In the now because each pack is $5-10 dollars a pop depending on where you live and later because of the obvious ill health effects that come from smoking.

Put an end to it now and reap the financial and health rewards!

3 – Stop Eating Out!

This is an obvious one, but food at restaurants is much, much more expensive than just eating at home. Start making your own dinners. Get good at cooking. It is a super valuable social skill to have anyhow, and everyone will be impressed if you do.

This alone can save you potentially hundreds of dollars a month depending on your eating out habit.

4 – The Crock Pot Cents Saver

Expanding on frugal tip #3, let us make our food costs go down even more. For a small $40-80 bucks, you can buy a really, really nice crock pot. Crock pots are amazing. You can cook anything you want in these.

Often, you can make delicious meals for super cheap. Soups, chilis, stews, you can even cook a pot roast in a crock pot.

The food you can cook in bulk, freeze in your freezer and have an entire litany of meals to eat throughout the week.

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The Debt Snowball Method

One way to achieve total financial independence is using what is called the debt snowball method. What does debt have to do with financial independence? Well, most people are in debt already. Many of them by tens of thousands of dollars. It goes to reason that most people that want to become financially independent, need to also find ways to kill off their debts.

This strategy will help you whether you get get another job, do a side hustle, or just keep doing what you are already doing.

snowball(Note: This method is not my design, it is actually something that financial advisor and TV personality Dave Ramsey suggests and created).

Basically, the debt snowball method is where you take all of your debts (minus your house mortgage if you have one) that you currently have and list them out in order from the smallest debt owed to the largest. Do not bother with the interest rates, that is not important for this exercise in forming new debt free habits.

The process is, all of your other debts you pay the minimum only on and then you fiercely pay off the smallest debt you have first. Do not bother with the interest rates right now. Why should you not bother with the interest rates?

Because the debt snowball method is all about quick wins. By paying off the first debt as fast as you can, you will get the high of achieving something. This feeling of achievement will carry you forward towards your other debts and help you actually stick with the plan. When you do pay off your smallest debt, take the amount you were paying on the card and roll it over onto the next debt plus the original minimum you were already paying on the slightly larger debt.

Keep doing this where eventually the minimum payments for everything are rolled into one massive payment for your biggest debt.

This strategy can work wonders in making your debt disappear. Because you are not spreading your efforts across multiple cards, your efforts are not being diluted or watered down. Instead, you are doing what Dave Ramsey says is one of the only strategies that have been proven to work over and over again:

Fierce, focused intensity.

You can break down the smallest debt once you know how much you can pay every month into the number of payments you have total. For example, if I had a debt of a $1,000 and I knew I could pay a $100 towards it a month, I would have 10 debt payments.

I would keep these payments somewhere visible, like on a bathroom mirror or somewhere in my room so when I wake up and go to sleep I see that goal. Every payment, I would hang up the payment on the wall or mark it off so I can visibly see my progression towards achieving this goal.

In time, this method is so powerful because you will be absolutely crushing your debt. This is the first step to really becoming financially independent.

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Ending the Overwhelm of Debt

Debt. It is a four letter word that millennials hate, but they along with a huge swathe of people are drawn to it like flies to a burning lamp. It eats at people emotional and even physically. Sometimes, the power of debt can be so overwhelming that we feel at a complete loss with ourselves and what we can do. Sometimes this feeling is strong it feels like there is absolutely nothing we can do in the onslaught of ever accrueing interest, bills, and unexpected emergencies that crop up in our lives that reduce “little wins” back to where they were, or even worse financially speaking.

debtThe first step, that is if you truly wish to end debt, is to confront this feeling of overwhelm and helplessness. Realize that the task is not as monumental as you may believe. Break down what you need to accomplish in order to take control of your debt and be debt free once and for all.

For example, if you had $30,000 dollars in credit card debt, you need to figure out a gameplan to pay that back. Maybe you set a SMART goal (Specific, Measurable, Achievable, Results-bound, Time-bound) to help end your debt.

If you decide you want to be free and clear of this $30,000 dollar debt in just 2 years, now we can break this down into some specific numbers of what we would need to do. There are 24 months in 2 years, and if we divide $30,000 by 24 we get $1,250.

That means if we pay a $1,250 every month to that debt, it will be completely gone within 2 years. Our specific goal is debt elimination of the $30k, we can measure how much money we pay off every month of that debt, it is an achievable albeit ambitious goal, the results are debt free and we have a period of time we want to accomplish this goal (in 2 years).

Suddenly, your goals seem too ambitious again.

If you are in debt that much, how are you going to be able to divert $1,250 a month every month for the next 2 years?

Let us break it down again.

What is $1,250 in 30 days?

That is only $41.66 a day.

This number is very specific, but it is also very small. What could you do that could earn you an extra $41.66 cents a day? There is a plethora of things that are possible.

Now we have gone from a feeling of overwhelm, to a feeling of possibility. When we break down our big, ambitious goals like this, then the overwhelming dooming feeling we get from massive debt becomes pretty easy, and manageable.

Of course if you are debt free, you could apply this same goal making philosophy to saving $30k a year as well! By breaking down the big “massive” debt overwhelm feeling, you have now created a bite size problem that you can could destroy in no time at all, with very little extra added effort on your part.

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