How to Raise Money Instead of Debt

IMG_6213Whatever the reason, no matter what political policies or economic currents caused it, many people who fall into the Middle Class live paycheck to paycheck, one crisis away from massive, high interest debt that will take years to pay off. Whether from decisions we make, or circumstances beyond our control, money problems plague the Middle Class. It can be frustrating to work hard and still have nothing left after you pay your bills.

Sometimes an expense pops up that is outside your monthly plan. You want to go an a trip. Or maybe you need to build up that $1000 emergency fund again. Or need to buy new school clothes. Or anything that is outside the normal monthly expense of making ends meet. Don’t put it on your credit card! There are other ways.

How can you raise money instead of increasing your debt?

Increase your cash coming in, Reduce cash going out.

  • Find extra money in the budget. If you don’t have one, make a written budget. In one column write down all the money that comes in for a month. In  another column write down every monthly expense. Are you spending more money than you earn? What are you spending it on? Make some hard choices. Do you need that big data plan on your phone? Do you need the whole cable package? Do you need Netflix and Hulu and Amazon Prime streaming? Do your kids need an allowance that large? Hey, this is a team effort, and letting your kids contribute will teach important lessons about handling money. Is it time to consolidate those high interest credit cards?
  • Rework your W4 form. Do you get a big return on your income taxes every year? You don’t have to wait to get that money. Talk with your HR person at work, and add some allowances on your W4 form. It’s nice to get a big check from the IRS, almost like a savings account, but you need that money now.
  • Get an extra job. Find a way to work from home on the evenings. Deliver pizza. Pick up an overnight shift or two in retail somewhere. Pick up a freelance gig. These jobs don’t pay much, but they do provide some extra income when you need it.
  • Downsize. Want to get radical? Trade in your nice, fancy car for an older, reliable model. Get something you can buy outright or at least reduce the monthly payment and insurance on. Consider selling your house. It’s no fun to be house-poor. Is it possible to sell your current home and buy a house that costs less while meeting your needs? Imagine not having a monthly car payment, or having a rent or mortgage payment that is hundreds less than what you pay now.

Sell Stuff.

  • Yard sale! People buy a lot of weird stuff at yard sales. And you probably have some things laying around that you never use anymore. Pull out your furniture, old electronics, clothing, home decor and anything else that might have value. See if you need a permit for a sale in your area. Put an ad on craigslist, tell people on social media, and sell your unwanted stuff. You can easily make a couple hundred dollars for a couple of days work. And you free up storage space in your house. This is not the time to sell collectibles. It’s the time to price unwanted items at low prices to get them sold, and get more money in your hands.
  • Sell books and movies and music and video games. Whether in person or online, you can often sell old media. We have a store in our town called Hastings, and they will buy most kinds. They don’t give a lot for it, but they do give cash for books, music, movies and video games you don’t want. If you haven’t watched a movie for over a year, consider selling it. Go through all of your books and music. Get rid of what you don’t need.
  • Pawn Shops. Never pawn anything at a pawn shop. Just sell it outright. Expect to get 20-40% of what the item would sell for used-condition retail. If you have extra tools, electronics, cameras, yard machines, bicycles, etc… you can sell those to your local pawn shop. Clean out your storage and sell what you’re not using anymore.
  • Collectibles. Find the right place to sell them. Yard sales are not the place to sell collectibles. In our last yard sale my daughter wanted to sell a well-worn American Girl doll. She priced it at $15. No one looked at it. The next week we sold it on eBay for $27. Same yard sale had a set of baskets that no one would buy, but later sold for $50 on eBay. Auctions, online communities, Craigslist, eBay; all of these may be a good place to sell off collectible items. Remember, with collectibles, most are only worth what people will pay for them. You can buy any beanie baby in the world for about a buck today. There are some coins that are only worth the price of the materials in them. But my son once got a quarter back in change from a store that he sold for $15. I once had a collection of G.I. Joe toys that books said was worth over $1000, but I was only able to sell for $289. When you’re raising money, it may be time to cash in on your collection.
  • eBay. It’s an amazing website that puts you in touch with buyers from all over. You can sell just about anything. You can research the price of an item, and purchase shipping at a discounted rate. They take 10% of the final sales price and shipping costs. Then Paypal, which is the way you transfer money with eBay, takes 3%. So that $50 item you sold netted you $43.50. And depending on how you listed it, you may have to pay shipping out of that. That’s more money than it made sitting in your closet, but be aware of the fees. Always consider how you will ship the item before you list it. Will you need to buy shipping boxes and materials? It is worth the hassle? I normally don’t sell anything worth less than $10, including shipping. If you aren’t careful you could find yourself clearing under $5 for your item. That’s not much, unless you are doing a lot of volume. One caveat, eBay and Paypal ALWAYS side with the buyer initially, and the burden of proof is on the seller if there is a dispute. Describe your item accurately, ship promptly and safely, and always track the package.

And there are lots of other ways to earn cash.

My family and I are taking a trip soon. We estimated that it would cost about $400 in gas and food. And we didn’t have that sitting around. So we started raising it. We made a couple hundred at yard sale. We sold a ton of books and movies. We sold some electronics and collectibles on eBay. Within a couple of weeks we had raised $430 for our trip. Plus after working through or budget again and adjusting my W4, we will have more income with less bills going forward so we can save more for things like this.