12 Ways to be a Financial Extremist in 2013

ExtremeWelcome to The Debt Movement!

You have become a financial soldier in the war on debt, and in doing so, joined a mission far more important than you even realize.

If you are open to change, you are facing a possible financial transformation of epic proportions.

I say “possible” because it takes more than just wanting something for it to happen – you have to LIVE IT!

Talk is pretty cheap and it doesn’t pay off much debt either!

How bad do you want debt freedom and what are you willing to do to make it happen?

You basically have 3 choices.

  1. Do Nothing – Are ya sure?
  2. Do Something — You are a soldier and have acknowledged that your life would be better without debt causing you financial burden.
  3. Do Everything – You are a financial extremist, willing to do whatever it takes to eradicate debt from your life.

If you have chosen number 3 then prepare yourself for war!

You don’t have to do any of this if you don’t want to, but if you’re pumped and ready for an all out war, then you’ve come to the right place! I am the King of EXTREME when it comes to debt annihilation. What some people consider extreme, I consider necessary.

Are you sick and tired of waking up with debt! Become a financial extremist!

12 Ways to be Financially Extreme in 2013

1. Forget About Your Credit Score

Want to start making financial decisions based on what’s best for you and your wallet instead of what’s best for your score? Though it is regurgitated as “important” by most financial experts some of us have decided that we ARE NOT our credit score.

Contrary to popular belief, a credit score isn’t as necessary to your financial success as you have been led to believe. With services like eCredable and manual underwriting it is possible to own a home and prove you are financially responsible without playing the credit score game.

Before you write this off as impossible, keep in mind there are plenty of us out here that can prove that it is.

2. Sweat Your Debt Off

Are you willing to sacrifice a little comfort in the name of debt freedom? Jackie Beck from TheDebtMyth.com, and her family went without replacing their air conditioning unit so that they could use that money to pay down their debt.

Did I mention they live in Arizona? And that it was in the middle of the summer?

What can you do without in the name of becoming debt free much faster?

3. Sell Everything You can

Or as Adam Baker from ManvsDebt.com would tell you – “SELL YOUR CRAP!”

Baker and his wife Courtney sold all of their crap and paid off their consumer debt and traveled to Australia! It is SO EASY to accumulate stuff over the years and it’s even easier to become attached to that stuff.

I’ve met and tried to help so many people that were not willing to part with their material possessions in order to get out of debt.

IT’S JUST STUFF! Get rid of it. Get out of debt. And then buy it again when your financial situation has improved!

4. Sell Your Car Payment

In 2008, my wife and I sold our 2004 Pontiac Vibe and bought a beat up, but reliable, 1986 Honda CRX. We eliminated $8,500 from our total debt and gave ourselves a gigantic motivational boost in the process. Not once did we ever miss our car payment.

Sell your car and use your “car payment” money to pay down your debt. When your debt is gone use what you were paying on a payment to save up for an upgrade.

5. Use Cash As Often As Possible

Meadow Devor from MeadowDevor.com suggests using cash as much as possible because “it keeps you honest. I believe that because the credit cards in my wallet weren’t always truthful to me – it wasn’t until I got the statement in the mail that I found out the truth!”

A study led by Priya Raghubir at New York University concluded that participants were willing to spend more when using plastic. “Consumers simply feel the pain of paying more when they part with cash.”

However, for those of you not willing to give up your plastic, the study also revealed that heavily monitoring each and every expense in detail closed the cash-credit spending gap significantly.

Cash is a physical and visual aid that can help us focus more clearly on the mission at hand – getting the most out of every single dollar we spend so there are more little green soldiers (dollar bills) to throw at debt.

Cash is a valuable resource that should be stretched as far as it will go and something you never want to be deployed without.

debt-free

6. Create Multiple Sources of Income

Over the years, I have listened to countless people claim that they do not make enough money to pay off their debt. In fact, some of those people were so stuck on their one income that they were unable to see their own potential when it came to creating multiple sources of income.

Start blogging. Sell stuff on eBay. Become an expert at something and start providing a service. Just do something. Even if “something” means taking on a second job delivering pizzas.

7. Sell Your House

As hard as it might be to accept, if you are buried in debt and your mortgage payment, property taxes, and insurance equal more than 40% of your take home pay, selling is probably your best option.

In this case, NOT being extreme could eventually land you in foreclosure or even bankruptcy. Paying almost 50% of your income on your home – whether buying or renting — is an emergency waiting to happen.

You may also consider being extreme if you bought too much house and simply want to downsize to reduce your monthly burden. (Even if you are able to pay your rent or mortgage without problem)

The bottom line is don’t make your life or your financial situation harder because you want to keep a house. It’s not worth it.

8. Take a Staycation

When we were getting out of debt we said NO to vacations. This doesn’t mean cut out entertainment all together but vacations can get rather expensive and fast. Instead find inexpensive ways to entertain your family from the comfort of your own home.

The “vacation” isn’t as important as the quality time spent with loved ones. Make a family game out of seeing who can come up with the most creative and inexpensive ways to take a staycation. In the meantime, have more fun watching your debt vanish.

9. Cut Up Your Credit Cards

One way to avoid racking up credit card debt is to cut up your credit cards. We vowed to never use credit cards again and have never looked back. We closed our accounts, cut up our cards, and stuffed the remains in a glass Christmas ornament to hang on our tree each year.

Six years without credit cards and we have managed quite well. It’s not as hard as you think and it removes unnecessary risk and temptation from the equation.

10. Starve Yourself to Freedom

Newlyweds, Mike and Mandy Young of MikeYoungCoach.com, lived on $15 a week (YES $15) for food and treated themselves to $1 frozen pizza each Sunday.

Now that’s dedication! They didn’t really starve themselves but they did figure out a way to live on less in order to maximize their debt elimination potential. What are you willing to do to be debt free?

11. Pay Debt NOT Comcast

My good friend Steve Stewart from MoneyPlanSOS.com says ditch the cable television. In most cases, your hefty cable or satellite bill could help you pay an additional $50-$100 on your debt each month.

That doesn’t sound like much TODAY but added up over the course of a year you would pay an extra $600-$1200 on your debt and save on interest. Little things add up.

12. Get Rid of Your Cell Phones

Please note, I did not say get rid of your kids…just your cell phones. Matt Wegner of FincialExcellence.net says he gets the funniest looks from people when he suggests this.

As tough as it may be to detach yourself from being fully connected 100% of the day, it might be worth considering since the cost of a family of two or more owning smart phones is about $150+ a month.

Not ready to be THAT extreme? Downsize to a cheap old school (dumb) phone without internet for a little while.

BONUS TIP – Focus on One Debt at a Time

If you’re looking for EXTREME MOTIVATION, I highly recommend you focus on paying off one debt at a time. Pick your lowest debt and squeeze every last cent you can out of your income and use it to pay it down until it’s gone.

Then take all of the money you used to pay down that debt and roll it over to the next debt in the crosshairs while paying the minimum payments on the rest of your debt. This is known as the debt snowball and it is very effective!

be extreme

Ready to be EXTREME in 2013?

As I wrap this up I want to make one very important point. I used the words EXTREME in this post because most of what I suggested is considered extreme or radical by most people.

But why?

Why is it considered extreme to do what is necessary to eliminate something from your life that causes stress, money fights, bad health, bankruptcy, homelessness, and even divorce?

To me extreme would be NOT doing everything in your power to eliminate debt from your life so you can have one worth living. A life of debt is a life of bondage and servitude whether you are willing to admit it or not. It all goes back to changing your mindset about debt.

If you were swimming with sharks and found yourself completely surrounded, you wouldn’t consider yourself to be “SAFE” simply because you chose to swim with sharks.

YOU ARE IN DANGER! Your life could change in an instant.

Having Debt is No Different!

You’re in constant danger. You may be “safe” for a little while but you are always an emergency away from any number of bad financial situations. Be proactive and give yourself the best possible chance to survive by eliminating all of your debt.

It’s time to get RADICAL!

Join The Debt Movement and become a financial extremist! Don’t just get rid of your debt – GET RID OF IT FOREVER!

 

About the Author:

Brad ChaffeeBrad Chaffee is a known financial extremist and founder of the blog Enemy of Debt, where he pulls no punches when talking about the dangers of debt. He doesn’t care about his credit score, hasn’t borrowed a penny since the end of 2007, and has plans for him and his wife to buy their next house without a mortgage. Debt freedom has changed his life and it can change yours too. He’s sure of it!

  • Jeff Ehrlich

    Brad, Great article on 12 ways to be a financial extremist. I especially like #4 and #7. Percentages are very important with your budget and your housing and transportation should be in the 40% range of your take-home income. 25% for mortgage/rent and 15% for transportation. If your car payment is taking up 50% of your net income then your percentages are out of whack and you need to sell the car if you want to live a life of financial freedom.

  • Kevin Smith

    Great Article. However, for #12, another possible solution is to switch to a prepaid plan. I finally dropped my grandfathered-in unlimited plan from Verizon–which I had been led to believe was the best deal out there–at ~$88/m and switched to StraightTalk.

    StraightTalk is $45/m for unlimited everything (with minor stipulations). If people already have a GSM phone, they can continue to use that phone with ST. T-Mobile offers a $30 plan which is decent, but only gives you 100 minutes. There are ways to use Google Voice and VOIP apps to stretch those 100 minutes, but in my opinion the extra $15 on StraightTalk is the better option.

    • Celeste

      Me too, Kevin! I feel like such a fool.

      My husband and I went from Verizon to Straight talk for Xmas. I bought GSM phones on ebay and bought the sim for AT&T…and I’ve actually found the service better and more reliable than Verizon. We are saving 70 bucks a month….

  • http://twitter.com/FinBlackSheep FinancialBlackSheep

    I have done all of the above to cut down on debt. I will be paid off this month (one month earlier than planned). I will have no debt what-so-ever and am paying for school in full without any loans. I have a shot at an apprenticeship too while in school :D.

    The only thing I would suggest is make sure the full family is in on the extreme measures taken to pay off debt.