One of the first things we did after seeing just where we stood with our debt was to see how we could get rid of it. Some of those debts – like a few of the credit cards – were fairly small amounts of just a few hundred dollars each. However, those were all at least $25 minimum payments each month. So three credit cards at just the minimum was $75 each month.
You know what the sad part is about all of that debt on those cards? Aside from a self-propel push lawn mower from Walmart and new bras from Fancy Store, I could not remember anything else those credit cards purchased. We were in several hundred dollars worth of debt and didn’t remember what we had bought to get us in that hole.
So it was time to gird our loins, in a manner of speaking, and see what we could sell to start shedding the debt. Have you watched the Netflix show “Tidying Up with Marie Kondo”? That was not around when we started our journey to get out of debt at the end of 2013 but we were certainly taking a similar approach with our belongings when we started eyeballing what had resale value.
We were in a prime location in our town for a garage sale with great vehicle traffic and high visibility so that spring, we did a round up of stuff we had purchased but never used, gifts we’d received but no longer needed or wanted, baby items that I wasn’t going to hang on to for the possible next kiddo, jewelry I didn’t wear, clothing that no longer fit or appealed to us, superfluous furniture. We weren’t holding back and almost everything was up for consideration of if we truly needed that item more than putting that potential sale money towards paying stuff off. I remember we set up the check out table in the shade, baby in the playpen behind us with his toys, and tables galore spread out with every type of item you could think of.
We had a lot of people stop by and browse and most of them walked away with a purchase. If they made a fair offer, we would take it! We made a few hundred dollars from that event which was put towards debt. It also helped clean out some house clutter which helped my mental health. I don’t like being surrounded by clutter.
While thinking of what we could sell, this included bigger items. J had purchased an aluminum john boat in 2012, I think it was, that he was planning on using to go fishing somewhere at some point. There were no definitive plans for the boat and future fishing trips; it was a good deal at the time. He decided that getting out of debt meant more than keeping a boat for who knows how long before he’d have the opportunity to go fishing. We made a little more than $1,000 selling that boat and trailer and that money went straight to the debt.
If you ever stop and take a long, honest look at the things in your home, I bet there are items you had purchased on a whim to use at some point that has not arrived yet or something that was gifted to you but you have no need or want for. These types of items are the best places to start purging and listing them for sale either through social media or websites that are geared towards selling items such as eBay or Craigslist. I usually have more luck with sales through our local Facebook community sales pages than eBay or Craigslist.
I got tired of getting spam emails when I would go through Craigslist. There was a guy who sent me $900 in United States Post Office money orders for a $400 couch. He asked me to send half the overage to his cousin in a different state. I was not born yesterday so I took those to the local post office and gave them to the Post Master along with the email exchanges. Never heard anything after that but I figured that was doing my civic duty.
After selling big items and having the garage sale, it still seemed like we needed more income to break the log jam of reducing our debt. We put the credit cards in ice so we couldn’t add to those balances and we paid off what we could with the garage sale income and the sale of the boat. That helped scratch off a few of the lines on our spreadsheet but it didn’t seem like enough to really generate sufficient traction. I will tell you one thing, though, and it was the weirdest feeling for me. Every time I paid off a credit card and I drew a line through that item on the list, it was truly exhilarating! Like, wow! We knocked that one OUT! And then you’re all pumped up to knock out the next one. That’s probably why Dave Ramsey talks about starting with your small debts and snowballing to the next one as they get paid off. The emotional victory certainly bolsters the spirits while showing you that yes, things can be different and you’re already doing something about it.
J worked for a company (and still does) that still offers bonuses based on the company’s performance. They are not huge but after taxes, it is between $1,500 and $2,400 approximately depending on the year’s successes. Previously, we’d spent that bonus on something fun for us. In 2013, however, it was all about paying stuff off.
We thought about the other time where we have a large lump sum and that is with our tax return. Again, we typically spent that on something fun for ourselves or for the house like new paint or new furniture. Not in 2013, though. That year, it went to debt and after reading advice from the forums I have mentioned in previous posts, I decided to alter my tax deductions. This was huge because I was so afraid we’d have to pay into taxes if we changed our deductions too much.
Both J and I had always done 0 for our tax deductions and had the government take out the most money so we would get a big chunk back each spring when we filed our taxes. However, the more we read about it, the more we figured it would be better to have some of that money coming to us each month and get a smaller annual return than giving the government an interest free loan for most of the year.
J still stuck with 0 for his deductions but I played around with the deductions calculator. Based on that calculator, I was able to take 5 deductions (or something like that). I opted to take two less than what the calculator gave me. I was still playing it safe and cautiously with my return but that ended up freeing an additional $240 each month that we were able to put to use. J also reduced his 401k contributions by half for about 18 months to free up additional bring home money while we got our debt down.
Keep in mind that none of this was overnight. These are changes that we did over a period of several months. J said it was like a weaning process which was smart “because if we had gone cold turkey, I don’t think it would have worked as well with more stumbling.” We had fallen into a consumption-driven trap of our own making and it took time to drop some bad habits and relearn how to make money last.
Next week, I will share with you some of the changes we made to learn better habits and avoid temptations. Thank you for joining me as I continue to share what our family did to break our downward spiral of debt. Also, I apologize for no post Wednesday this week as I was under the weather (and I don’t mean the lower temperatures lately). Take care and hope you enjoyed the cool front in Texas this week while you could! ~ Lacie ~
Going Green In Texas 