Crisis Finance

There’s a lot written about how to get out of debt: transferring balance on a credit card, debt settlement, debt consolidation – by all means, I’m going to write about these things.  But one of the things that’s not mentioned is the issue of liquidating your assets.  Or, to put it more bluntly: selling your stuff.  This is seen as a drastic move and, frankly, fairly depressing, but it does have significant value if you’re serious about getting out of debt in as little time as possible.

Selling Your Car: Getting cash for your car and taking public transportation is a way to make immediate impact on your debt.  If you’re a two-car family, this is more feasible, but this should be thought about by single people as well.  If not selling their car outright, then possibly downgrading it to a less expensive model.

The issue here is one of self-respect, but being deep in debt also leads to self-respect trouble as well.  Think about the possibility of diverting the sale of your car towards your mountain of debt.  Let’s say you’re able to get $7000 for the car.  If you are interested in debt consolidation, this kind of down payment can give you significant leverage when negotiating with your creditors to lower your monthly payments and interest rate on those payments.  Without that down payment, you have less bargaining power.

Selling Your Belongings: I recently sold books and CD’s to the tune of $1000 and that was merely a fraction of the amount of stuff I’d acquired over the years.  Amazon and eBay are still viable ways to move product, even though there’s stiffer competition in the past. Even during an economic downturn, there are always prospective buyers for people who are spending $5.00 at a time.

CD’s are the easiest thing to unload.  Again, these are a prized possession, but given the fact there are ways to “save” a CD (without going into too much detail, or advocating it), there’s no reason to keep around that CD just for sentimental value.  These days you can find most any song online.  Again, I’m not advocating illegal downloading, but if you want to hear it, it’s there.  Used buyers are willing to spend a good amount of money on used CD’s.   And via Amazon, you can make $3.00 a sale, even if you charge a penny for the book.

Liquidating entertainment products is not necessarily a way to pay off huge, insurmountable debt, but it’s definitely something that should be considered and the earnings will mount when combined with other measures.

Moving to a Cheaper Residence: Once again, no one said this would be easy.  And you must factor in the security deposit for one abode before moving into another.  But you could potentially save hundreds of dollars a month – money that can be put towards more-aggressive debt repayment.

As for other assets, don’t sell anything that has deep personal value until it is absolutely necessary.  When in doubt, downgrade.  Sell your prized guitar, but don’t stop playing guitar completely: buy a cheaper knock-off.  The idea is to not alter your entire quality of life entirely, just to make it less expensive.  People are much more willing to take the above actions if they’re replacing it with something cheaper, rather than getting rid of it entirely.

More daily budgeting tips to come.