Making Do With Less
Sometimes financial difficulties put you in a position where having things like a recurring mortgage may not be the best idea. Maybe you weren’t in this kind of debt when you started mortgaging the house; maybe this happened over time.
Whatever the case, when you’re in over your head, you’ve got to get a toehold somewhere.
If you’ve paid $1k a month into a mortgage for five years, that’s $60k before interest is subtracted. $50k is a pretty conservative figure of what you can potentially recoup based on your investment.
If you’ve got a steady income, you can sell the mortgage on your house, turn that money directly into the debt, then get a cheap apartment.
If your mortgage were $1000 a month, and you found an apartment for $600, then you’d be able to pay $400 more per month than you would have been able to otherwise, or an extra $4,800 annually. If you really want to go cheap, get a motorhome. It can be a rough life, but you can save quite a bit of money and experience otherwise unattainable freedoms.
Something else you might do in a tough financial situation is looking for help. It’s actually possible to crowdfund debt payment solutions through sites like Plumfund who offer free online crowdfunding. Friends and family may be able to help you out. This is especially a great solution if some unpredictable disaster put you in debt.
Traditional Debt Resolution Solutions
Additionally, you might want to look at traditional debt resolution solutions. For example, consolidating your debt can save you hundreds or even thousands of dollars on a regular basis depending on what your interest rates were on your unconsolidated debts.
If you had interest on $100,000 spread across ten debts, that rate could fluctuate between 1% and 5% or more. If you can consolidate it into a single debt with an interest lower rate than your previous combined interest rates, you’ll be able to get your debts paid more quickly.
To learn more about how to find debt relief, you might want to do some online research on sites that offer tips on how to save money.
What’s Your Regular Monthly Budget?
Next, look at your monthly budget. If you’ve got a debt of $100k hanging over your head, and between mortgage/rent, food, gas, incidentals, and utilities, it costs you $1,500 a month to live, you shouldn’t be spending $2,000 a month.
At a job where you’re making $3k a month, you’ve got the potential for $18,000 a year to be thrown at pernicious loans. It would take you less than ten years to pay back a loan that costs $100,000 including total interest —if you paid $1,500 a month out of your $3k/month salary.
But if you’re only paying $1,000, you can only pay back $12k a year, which adds a lot of time to how long it will take you to ultimately pay off the loan.
Living Frugally To Live Freely
Cut out fast food—prepare your own meals. Walk or ride a bicycle whenever you can to preserve fuel expenses. Don’t go to expensive sporting events, shows, or movies. Read books and rent films from the library, or watch them for free online.
Stop drinking $5 coffees every morning. Refrain yourself for a few years and you’ll have your loan paid off. The key is: live beneath your means until you can afford not to—and maybe even then.