Getting Out of Debt: Selling Stuff

A quicker way to see long-term results


It was a common practice in the days of pirates.

If you were being chased by a ship that was trying to capture or kill you, you'd dump everything that wasn't vital over the side so you wouldn't be as heavy. A lighter ship goes faster, and your odds of escaping go up.

Around here, we replace the pirate ships with cheetahs, but the urgency to get away is just as intense. If your spending threatens to catch up with you, one of the best things you can do to get out of debt is start selling stuff you owe money on. Not only do you get rid of the debt, but you free up cash for monthly budgeting.

Don't sell the sentimental items and family heirlooms—you can't get those back. However, don't use that as an excuse to avoid selling a toy you like. The prosperity of your family is riding on your willingness to sacrifice "stuff" for a little while so you can become debt-free.

Dave's general rule of thumb is that if you can't be rid of an item's debt (except the house) within 18 to 24 months, sell it. So if you have a car payment that can be paid off within two years, it's fine to keep the car.

But what if you got so gazelle intense that you decided the car or boat just had to go? How much quicker could you be out of debt if you realize that a rental property you owe money on isn't necessary to life on the planet? The jolt of momentum to your debt snowball would be huge.

If you have a $10,000 car note that will take you 20 months to pay off, you might be putting $500 a month on the loan. If the car is worth $7,000, you could sell it, then borrow the $3,000 difference (plus another $1,000 to get yourself a beater car) from a local bank or credit union.

Now your debt would be down to $4,000, which you could pay off in eight months. With that sell—that one fell swoop—you have moved up your debt-free timetable by a year. Wow!

If you are on Baby Step 2, take a serious look at what you can sell. The sooner you are out of debt, the sooner you can stop walking the plank.

Reader Comments (3)

I love this advice, because it lets me keep my car I really like!! Really started in this month once I convined DH to follow the plan & we'll be debt fee come Nov this year!!
Member at 8:07 AM, January 11 2012
My husband just sold his quad. He was bummed about it, but it really is helping us reach our goal so much faster. That payment alone frees up $170/month that can no go towards something else.
Member at 10:35 AM, January 11 2012
We are in the process of selling lots of "little" stuff as we are moving out of state. Craigslist is where we are selling and so far so good. We won't have near as much to move which should also get us a smaller van to rent.
Member at 4:02 PM, January 11 2012

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