Extreme, creative ways to clear debt

By Benjamin Salisbury

The textbook way to repay debt is to organise your accounts, make at least minimum payments on them, and put as much spare cash as possible toward one debt at a time (perhaps the smallest or largest, or the one with the highest interest), then move on to the next one. However, if your debt pile has reached frightening proportions, it may be time for extraordinary action.

Melanie Taylor, spokeswoman for the Debt Advisory Centre, said in an emailed response to questions that the organisation has clients who have taken desperate measures to escape debt.

"We have helped clients who can't use their car to get to work because they can't afford fuel," she said. "Instead, they leave extremely early in the morning and walk. Other clients cut back on buying food to pay off debts and rely on parcels from foodbanks or friends and family." extreme-debt-plan

Some have taken things a step further, selling their homes and moving in with relatives, or putting their homes up for rent while they lived in a mobile home or other cheaper alternative, Taylor said.

"We've even seen people sell all of their possessions on eBay," she said.

Though your choices may be limited depending on your family or job situation, you may want to consider some creative -- and maybe extreme -- ways to clear your debts.

1. Move somewhere cheaper.
If your job and family situation allow it, moving to another city or another country with a lower cost of living can save you a lot of money to throw at that debt. If you've got a home you can rent out, all the better.

This reporter once used this technique. I had always wanted to travel
around India and I had considerable debt, so in 2006, I went. While I was gone, I put the property left to me by my mother up for rent. The cost of living in India was very cheap, about £100 a week, so I was able to cover my costs there by freelancing. I put the whole of the rent I received toward my debts, and paid off almost £10,000 in 12 months.

Even if you do not have property to rent out, you may still be able to curb your wanderlust and save some money at the same time, then put those savings toward your debt.

2. House/pet sitting.
If moving from your home is a viable option, but moving to another country is not, there is a market for looking after someone else's home.

For many reasons, people need house or pet sitters. If you can be flexible and don't mind living in different areas, you can be paid to live in someone else's, while avoiding paying rent or a mortgage payment for your own place.

How much you get paid is negotiable between you and the property owner. Sometimes, you just get free accommodation, but you should be able to keep your regular job, so any money you were putting toward rent before should now go to your debts.

If you have property to rent out, even better. You will be able to garner extra income from rent and use it toward your debt repayment as well. If you are lucky enough, you may get a golden trifecta of bringing in your regular wages, house or pet sitting money and rent money.

3. Explore your loft.
If your loft has been collecting items for as long as you can remember, it may be worth a look (even if some of those items contributed to your debt). It might also contain items left by previous owners that could be valuable.

Search for rare books, collectible records or, if you're especially lucky, antique furniture or artwork. You can take any items you think may be valuable to a reputable antique house for a fair valuation. You can sell general items through a garage sale, at a boot fair or online.

4. Sell your record or other collection.
Christopher Callow, a  DJ friend of this reporter, had a massive collection of rare vinyl, but equally huge debts. He decided (with a bit of pressure from his partner) that he ought to sacrifice his DJ box room and get it ready for the birth of his first child, while earning some extra cash in the process.

At record fairs and online through specialist groups, he sold almost 2,000 records, recouping a healthy five-figure sum. The money paid for the former record room to be redecorated as a nursery, and he had enough left over to clear his debts.

5. Cash in on your hobby.
If you have a real interest in something, the enthusiasm and knowledge you have can turn it into an earning opportunity.

Back in 1990, this reporter was a big fan of the recording artist, Prince. As an aspiring journalist, I decided to write a fanzine.

At this time Prince was very popular in the UK and sold out the 10,000 capacity Wembley Arena in London 20 times over the summer. I took copies of my fanzine and sold it outside his concerts, averaging around 50 sales a night. I also took the fanzine to the (now defunct) Virgin Megastore in Oxford Street and in my hometown of Brighton, and between them, they sold 250 copies. I made about £800 over the summer for what was essentially a labour of love.

6. Get extra jobs.
Finally, you can just work flat out until you earn enough money to clear your debts.

"Debt Advisory Centre has seen an increase in the number of clients who are working multiple jobs with long hours to stay on top of debts," said Taylor. "Our research found that more than a fifth of adults in the UK are working a second job in order to get by financially."

While working long hours may sound like a slog, it may have the added benefit of not leaving time for spending money, which can help you climb your debt hill faster.

See related: 4 wrong ways to pay credit card debt, Make money while using your credit card

Published: 18 December 2015