Selling Some Assets
Besides debt consolidation, there is another way to raise money to pay off your debts: Sell some of your assets. If your house, apartment, storage unit, or parent's house is stocked with items belonging to you that you no longer use and that may have some resale value, consider selling them and using the money to pay down your debts.
Selling Valuable Items
Items that you may be able to sell — and that may be valuable — include furniture, jewelry, an automobile or motorcycle, exercise equipment, recreational toys (pool table, bike), paintings, signed books, computer equipment, guns, memorabilia (baseball cards, signed sports balls), coin or stamp collections, and outdoor equipment (grill, riding mower).
Whatever items you plan to sell, if you expect a high price for them, make sure they're in excellent condition. If they're not nearly new, consider holding a tag sale (see below section).
Don't sell any items that don't belong to you! That may be considered theft, landing you in hot water. Also, don't sell anything that has a loan against it unless you plan to pay off the loan that same day. Contact your lender about how to sell an item that they hold a lien against.
You can sell valuable items in a variety of ways:
Advertise in your local newspaper or a pay-only-if-you-sell publication. Although an ad in your local paper can be a bit pricey, you won't have to mess with shipping the item to an out-of-town buyer. Classified ads in some papers are quite inexpensive — and most feature a searchable Internet component. The pay-when-you-sell publications, either online or in print form, allow you to advertise for free until you sell the item, at which time you pay a percentage of the selling price — sometimes as much as 15 percent. This option is a good idea if you're not sure your item will sell.
Visit a reputable dealer in antiques, paintings, guns, jewelry, books, coins, or stamps. If you think your item has some value, see a dealer who resells the type of item you wish to sell. Don't visit a pawnshop or any other shady business. Go to the best, highest-class dealer you can find and present your item for sale. If you aren't satisfied with the price, go elsewhere. That particular dealer may simply have too many of what you're trying to sell; another dealer may not.
Auction off the item, either online or with a service in your community. Your items will have to be fairly valuable to others to warrant a live auction (call your local auction company to arrange an appraisal), but even inexpensive items can be auctioned via online services like eBay.
Don't confuse pawnshops with tag sales, where you drag out all your stuff and try to make a few bucks. Let's be clear: The people who run pawnshops are nearly always loan sharks, often charging as much as a 25 percent annual interest rate. Steer clear!
Many online auction services now use a third-party escrow company that receives the money from the buyer and holds it until you send the item and it's received in good condition. The escrow company then sends you the money, charging you or the buyer or both of you a fee in the process.
If you choose an option that will require you to send an item to another city or state (and this is usually the case with online auction services), make sure you find out how much FedEx or UPS will charge you to send your item, insured, via one- or two-day service. Add that cost to your base price.
Also, do not send your item without first receiving payment: Either send it C.o.D. or require payment from the buyer before sending the item.
Holding a Tag Sale
If you own a lot of items, but none is of much value, consider holding a tag sale (also called a yard sale or garage sale). Although your items will sell for much less than you paid for them, you may be able to make hundreds of dollars selling items you consider to be junk. Don't forget, however, that lugging all your items out to the garage or yard, marking them with prices, and being anchored to your sale for a day or two is time-consuming and challenging!
Be sure to mark the price on every single item and include a range of prices, from 25 cents for old kitchen towels to $40 for a dresser that's in good condition. This will keep your buyers happy.
To attract customers, set out an attention-grabber — an item that's highly unusual or brightly colored — near the end of your driveway. Make your sale seem full by pulling some of your larger items out of the garage into the driveway. If you don't think you have enough stuff to attract attention, consider combining a sale with neighbors, friends, or family.
Don't include your phone number in the ad — you'll spend the day of the sale on the phone, distracted from helping your buyers and spotting shoplifters.
Be sure to advertise your sale in your local newspaper. For a fee (generally $10–$25), your sale will be advertised a few days in advance (in the paper and online), and you may even receive some signs to place near your house, at intersections, or on busier streets, showing shoppers how to find you. Your ad should include directions, hours, a list of items, and whether you'll hold your sale in the event of rain.
Expect early birds to arrive from 60 to 90 minutes before your posted time. If you're not ready to open, ignore them and reiterate that you'll be opening at the time listed in the paper. Most of these early shoppers are antique or resale-shop dealers who want the pick of your tag-sale litter. If you let them in early, regular folks who saw your ad and thought it'd be fun to go to a garage sale may be furious with you!
Good garage-sale operators get change (a roll of quarters plus small bills) the day before the sale, but if you do this, keep the money box in your hands at all times. A common scam is for one person to distract you while another steals the money box. Also, if you're not good at addition, keep a calculator nearby.
Cashing in Savings Bonds or Stocks
If you own bonds or stocks that aren't earmarked for your (or your child's) education or for your retirement and they are currently valuable, consider cashing them in to pay down your debt.
Before deciding, visit your local bank or stockbroker to determine the value of these assets, as well as any penalties and other costs or commissions associated with selling them.
