It’s MoneySmart Week, an initiative designed to encourage Aussies to take action to improve their personal finances. The first topic on the table is debt and here at Mozo we love nothing more than helping people take back their hard earned cash from the banks, so we’ve come up with 6 zany ways to dump debt.
Did you know the average Aussie cardholder owes around $4,400 and pays $800* in interest every year? With so many temptations to spend up big, landing yourself in hot water can happen pretty quick.
Thankfully there are many ways to climb out of the credit card pitt by simply making some changes to your spending habits.
While you’re probably already aware of the standard debt drill, such as stop shopping, avoid eating out… we propose some more wacky ways to dump debt:
1. Freeze your credit card (literally)
The first step to saying “goodbye” to debt is by addressing the cause – your credit card. Cutting up your credit card may stop you from spending, but what if you need the plastic in the case of an emergency in the future?
Putting your credit card in a container of water and placing it in your freezer will mean it is out of sight and not a temptation. When you do decide you need the credit card, all you have to do is thaw the ice in the container. The slow thawing process is also beneficial, as you’ll have time to consider whether you really need to buy those sleek Tony Bianco heels or the latest Samsung Galaxy smartphone.
2. Make garbage day payday
Ever heard the saying “another person’s trash is another person’s treasure”? Before you recoil in disgust, we should clarify. No we are not talking about dumpster diving, we are referring to used sellable items.
Everything from Toys”R”Us goods to Zimmerman apparel that you no longer wear could be traded for cold hard cash, which you can then throw at reducing your debt. Set up a garage sale or hire a stall at your local markets. If face to face sales aren’t your thing, try one of the online marketplaces like eBay or Gumtree.
3. Join the Army Reserve
This is definitely an unconventional way to ditch debt but hey this is the “wacky” list. As a Reservist you’re only required to work a minimum of 20 days a year and there are a range of roles available from admin to tech positions and the pay is tax-free!
If joining the Army Reserve seems a bit extreme, an alternative way to tackle debt is by getting a job on the side like babysitting or bar work.
4. Enjoy a discount haircut
Debt is all about what you spend right? While nobody likes having a hair full of split ends, visiting your local hairdresser can cost you big bucks. For example, a full colour and haircut, plus blow dry will cost $321 at Toni & Guy, by comparison the service at The Australasian College Broadway will only set you back $25 and you’re helping out a trainee. That’s a saving of nearly $300!
5. Strike a pose and become a model
You don’t have to be 6 foot tall with the complexion of Miranda Kerr to be a model. Many art studios and unis need life models of all shapes and sizes for their artistic pursuit. You can put the extra money towards paying down your debt and you may even find the experience liberating.
6. Go green at home
Do you really need 10 different cleaners for each section of the house? The fact is there are many cheaper alternatives to the products sold in the supermarkets. For example, your store-bought toothpaste for your pearly whites can be replaced with soda, an old carpet can be cut up and used as a doormat, and vinegar can be used to clean almost anything.
For more great tips on dumping debt read Mozo’s Demolish Debt Blog and if you have debt accruing on a high interest credit card, search the credit card market for a competitive 0% balance transfer card.
* According to MoneySmart Australians owe an average of around $4,400 per card holder and around $800 in interest per year if their interest rate is between 15 to 20%.