Creative Ways for Paying Down Your Debt

March 12th, 2023

5 min read

Creative Ways to Pay Off Debt That Actually Work

Debt can be quite overwhelming. On top of all the other pressures, the thought of owing money to someone else can be paralysing. It doesn’t have to be. There are creative solutions to pay off debt and these proven techniques can help you eliminate them for good. With budgeting and wise spending, you can create a plan to be financially capable. Being debt-free is nice. Without debt, you can: - make more significant purchases without worrying about how you’ll pay for them; - focus on your work and save for retirement; - travel more and start investing in your future. Once you pay off your debt, the benefits are endless; - sleep easier at night knowing that your debts are paid off; - breathe a little freer knowing that your finances are in order; and - put your money to better use.

Creative Ways for Paying Down Your Debt

1. Track Your Finances

If you’re serious about getting out of debt, you must be serious about your finances. You must know where all your money is going and where it should go. And you have to stay on top of everything. Getting out of debt will take a lot of careful budgeting and spending. Be organised and make adjustments as necessary. Your bank account will thank you.

2. Look for Unclaimed Funds

If you’re getting out of debt, you’ll likely be looking for additional income to help you along the way. And you may be able to find some unclaimed money in your name. These are essentially funds owed to you that you don’t know about.

The Australian Securities and Investments Commission or ASIC oversees unclaimed funds, referring to funds in bank accounts and life insurance policies that remain untouched or unclaimed for a specific duration. This occurrence often arises when individuals relocate or travel abroad, neglecting to update their information with a financial institution or company. In some cases, individuals may not even be aware of the funds rightfully owed to them.

After seven years of inactivity, bank accounts are classified as unclaimed. Similarly, life insurance policies become unclaimed if not claimed within seven years of maturity.

You can look for unclaimed funds by visiting the federal government website Moneysmart, created by the Australian Securities and Investments Commission (ASIC). ASIC is Australia's corporate, markets, financial services and consumer credit regulator that helps citizens manage their finances better.

3. Sell Your Extra Stuff

Cutting back on your spending can be helpful when getting out of debt, but it can also be a little challenging. It can be helpful to have an extra source of income to help you along the way. You can sell your extra stuff that you don’t use or need to generate some extra cash to put towards your debt.

Sell your old clothes, electronics, furniture, toys, books, etc. Research how much certain items are worth so you aren’t exploited. You can look at sites like Amazon, eBay, Catch, Kogan, MyDeal, etc.

It is hard to let go of things you own, especially if you are sentimental, so make sure you just let go of the things you do not value anymore.

4. Use Cashback From Your Credit Card

Credit cards can be beneficial for building your credit and ensuring you always have a source of cash on hand. But using a credit card can be incredibly dangerous for your finances. It would be best to be incredibly careful and responsible when using them.

One way to ensure you’re being responsible is to use financial incentives from your credit card to your advantage. Many offer cashback or rewards programs, so ensure you utilise them. Using cashback to pay off your debt can be a great way to get ahead and not fall behind.

5. Participate in Online Surveys

Online surveys can be a great way to earn to help you with your financial responsibilities. Some companies will pay you to take surveys and offer your opinion on different products, services, and more. You can make anywhere from $1 to $50 per survey, and many surveys only take a few minutes to complete.

These include OpinionWorld Australia, SaySo, and MarketAgent.

6. Look Into Side Hustles

Side hustles can be a great way to earn extra money and help you get out of debt. They can also be a great way to boost your resume and improve your skills. Side hustles can be anything from freelance writing to working with an app-based service. And they can be easy to find.

Many companies have websites with job boards where you can search for local opportunities like Indeed and Upwork.

7. Ask for a Lower Interest Rate

Getting out of debt might be challenging. You’ll likely have to make adjustments along the way as you make more progress. One way to make a big difference is to ask for a lower interest rate. You can do this by checking your credit report, ensuring all your debts are up-to-date, and ensuring your payment history is good.

8. Try the Snowball Method

The snowball method is simple yet highly effective for paying off debt. This method involves paying off your smallest debt to the biggest. This way, you can handle them each one at a time without feeling overwhelmed. As you pay one off, you can put more money towards the next debt you need to repay. This process can help you stay motivated because it will show gradual progress and betterment.

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If you need more help to pay off your debt, you can always download Wagetap, which can act as an additional resource. It is a leading wage advance and bill split app that allows you to get your pay early. Emergencies can always happen, and Wagetap can help you handle life's unexpected expenses. It is an app designed to help Australians achieve financial independence, helping access pay early up to $2,000 and split your bills up to $600.