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Finding Extra Money for Paying Off Debt

Now that I am seeing some progress in paying off the Discover Card, I am really looking into ways that I can find some extra money to do so even faster.  I am liking the fact that if all goes well, I could have it paid off by the end of the year which was a goal of mine for 2012.  However, if I were to really get serious and apply some extra funds, I could get it done by the end of summer.  That would free up some extra cash flow for the monthly budget, although I would probably work to knock out another debt.

Currently, I am paying $460 per month to the Discover Card balance.  This came as a result of paying the minimum on my other debts.  By not adding to my total debts, the minimum payment has decreased on some of my other credit cards.  So last year, as the minimum declined on other cards, I would only pay that amount and increase the amount to the Discover Card since it has the highest interest rate.  I am getting more bang for my buck.  But now, I want to take it one step farther.

Sources of Extra Cash

I have identified some potential sources of extra cash that can be used to pay off Discover even more quickly in addition to the little technique that I have mentioned above.

Recycling Aluminum Cans

We have a lot of people in our family and tend to drink a fair amount of soda out of aluminum cans.  We recycle these cans.  Last summer, I took in a year’s worth of cans that had accumulated in our garage and received $59 for them.  I also took in some a few months ago and got $21.  I haven’t done anything special with the money.  It is still sitting in an envelope.  I should take that money and make an extra payment.  It will be like making 23% interest on a savings account.

Spare Change

My youngest daughter and I wrapped the spare change that I keep in the jar in the office.  We ended up with enough quarters, dimes, and nickels to fill out $64 worth of rolls.  The rest was put back for the next time the jar gets full.  I should take that money and use it for an extra payment as well.  Coupled with the recycling money, I would have another $144 to put toward the Discover debt without crimping my budget at all.

Google AdSense and Blogging

I have already been using some of the blogging profits to make extra payments.  If you read the last post, you noticed that I was able to make a $400 payment using blogging profits.  Well, February was a good month to me on the AdSense front so I will be getting a check at the end of March.  I should take that check and make another payment since I really don’t have any other great use for the money.  That would knock about $130 off the debt.  Imagine how much progress I will be making once I am getting monthly payments.  This blogging thing has been good for debt busting.

Selling Some Stuff

I think I might be so serious about getting this debt paid off that I might even consider going to the trouble of selling some stuff.  Of course the added benefit of cleaning out the house would be a bonus.  Putting together a garage sale is a lot of work, but I am sure that I could get several hundred additional dollars to put toward credit card debt.  I have also read many things about selling books on Amazon or selling on EBay which might be worth a try as well.

These are just the ways that would work for me in order to make some extra cash for debt repayment.  I am sure there are other ideas and would love to hear any suggestions you might have, things that others have done or you have done yourself.  Help me out with a little brainstorming session in the comments.  Thanks for reading.

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20 comments - What do you think?  Posted by Cash Flow Mantra - March 2, 2012 at 5:12 am

Categories: Earning, Credit/Debt   Tags: , , , , , , , , , , ,

Paid Off a Business Credit Card

Well, I am very excited as I bet you can guess from the title because I managed to send in the last payment on my Capital One Business Credit Card this past weekend.  I may have a few dollars left on the next bill from a little bit of residual interest, but I am pleased to say that I was able to knock one out.  You may recall that I run my business activities through a limited liability corporation.  This LLC handles all of my real estate transactions as well as the income that I get from blogging.

In a previous post, I mentioned that I was sending in an extra payment as a result of a check that I received as part of the Google AdSense program.  This check coupled with a little bit of other blogging income and some over payments that I sent on my own have combined to pay off the card on which I had carried a $3000 balance since spring when I used it to replace the flooring in one of my rental properties.

I am really pleased that it is paid off now since the interest rate was not exactly the best.  I paid $430 in interest charges last year and only a little bit less this year.  So I will be enhancing my monthly cash flow by the $75 minimum monthly payment (although I was paying much more) and the $35 in monthly interest charges.  That is an extra $110 per month which represents about half of the profit that can be gained by owning one of my rental properties.  It would take over $25,000 in capital earning 5% interest after taxes to generate that type of passive income.  And yet, I was able to do it simply by paying off that credit card, and I can now focus on the best business bank accounts rather than accruing more debt on cards.

Business Credit Line is Next Target!

My next target is a business credit line which I have also used for repairs in the past and to smooth out cash flow issues with the real estate.  Obviously, that hasn’t been the best idea, but the past is over.  I can only look to the future and make it better, learning from my mistakes and not repeating them.

With that in mind, I will be paying off this credit line.  The total credit line is $2500 but I have not been adding to it.  In fact, I was able to take what I would have paid toward the credit card and apply it to the credit line.  The current balance is right at $1000 although it was higher at the beginning of 2011.

For 2010, I ended up paying $360 in interest charges which equals $30 per month.  Add that to the approximately $100 monthly minimum payment and my cash flow will improve by another $130 per month within short order.

Then, I will plan on setting aside some funds for future repairs.  This will be my business emergency fund.  It will be a good feeling to have that money available so I don’t have to rely on credit for emergency purposes.  Again, I plan on rectifying past mistakes and making improvement in my overall financial situation.

In the near future, I will be considering my overall goals for 2012 some of which will include financial goals for my LLC.  As I sit down and reflect on this past year, I am encouraged by the progress I have made and will be looking forward to even more in the year ahead.  Having a sense of what is possible will make it easier to sit down and work out those goals.

I am so pleased and can’t stop smiling today!

20 comments - What do you think?  Posted by Cash Flow Mantra - December 5, 2011 at 5:44 pm

Categories: Credit/Debt   Tags: , , , , , , ,

My Love-Hate Relationship with Discover Card

Note:  I am in Honduras on a mission trip until October 30th with limited ability to communicate with the outside world.  Don’t be offended when I don’t answer your comments until I return.

I have a love-hate relationship with Discover Card.  They love my wife and hate me.  I in turn hate them back.  Let me explain.

The Discover Card was our first credit card after getting married following college.  We both had applied using our respective incomes.  My wife had a job making a little bit of money, and I had a job making about 3 times what she did.  Neither of us had any debt following college.  I made it through debt-free and we paid off hers very quickly.  We were leasing a car at the time and living in an apartment.

When the applications were reviewed, she was accepted for a Discover Card, and I was rejected.  I was incredibly offended.  In fact, I was pretty ticked off.  OK, I was very ticked off and harbor a grudge to this day.  As I stated, I really hate the Discover Card.  I don’t really care about the cash back or anything like that.  They rejected my application for credit despite the fact that I made 75% of our household income which ended up being reflected on the applications.

I ended up getting a card, but only on my wife’s account when she requested 2 cards and added me.  As a result of my hatred, I have done everything in my power to not use the card.  We did have to use it at various points in our life, but for years I had it paid off and would not allow them the satisfaction of earning any interest from me.

Life Happens

Unfortunately, circumstances in life occur and we are currently carrying a balance.  Well, given the wonderful consumer protection laws designed to help us by reducing fees simply caused the credit card companies to increase the interest rates that they charge.  Discover Card recently increased my interest rate and now it is over 23%!  Did I mention how much I love to hate Discover Card?  Some consumer protection!

Anyway, I think that I have finally gotten to the point that my anger will be used for productive purposes.  I am angry at my debt and angry at myself and angry at Discover Card for charging me 23%.  I am going to teach them and make a vow that over the next 9 months, I will have that Discover Card paid off even if I have to sell a kidney.

Of course, the recent puppy fiasco didn’t help much, but I am determine to get it done.  I will periodically post my progress here so I am hoping that you all will be keeping me accountable.  I have lots of other debts that I would like to pay off as well, but this is the one with the highest interest rate and the one that most annoys me due to our history together.  Maybe once I get it paid off, I can start taking advantage of the cash back opportunities and begin to use the credit responsibly, but that is another post for another day.

Right now, I am mad.

Readers:  Ever get angry at your debt or a particular company.  Share your stories.


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12 comments - What do you think?  Posted by Cash Flow Mantra - October 24, 2011 at 6:00 am

Categories: Credit/Debt   Tags: , , ,

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