While I’m growing my business, the main goal for my personal life right now is to be debt free from all student loans and commercial debt (credit cards). As mentioned in, Establishing A Better Relationship With Money and Nice Girls Don’t Get Rich, I have been working on this for some years now. Some people will say that when you start a business it’s okay to have business owner debt and others might say that they can’t afford to get out of personal debt while simultaneously starting a business. I just wanted to share with you all, how I have cut my debt in half and will be hopefully debt free by the end of 2016.
Know What You Owe
I’m going to be honest, at one point in time I wasn’t paying on my student loan debt. I wanted to live my life. As I look back on that moment, it was silly of me to think that a $50 payment was interfering with my life. It was just an excuse not to be fiscally responsible. Own up to your decision. You took the student loan out, so pay it off. I went through all of my documents to make sure I knew exactly what I owed to each lender. Be very careful about paying your student loans off to random companies, especially if, you have let your loans go into default. Contact the lenders to be on the safe side. Who cares if it takes you weeks to track down the new owner of the loan. It’s best to pay the right people.
Create A Realistic Budget
This is the one issue I had with the Dave Ramsey program, and why I switched it up to work for me. Yes, some people can live on 20% of their income and put the rest towards debt. I can’t, I have a business to run. My money has to be invested wisely back into my business in order for it to remain successful. What is reasonable for your business to put towards your debt? 30-40% of my income goes towards mines. I can live with that. Yes, if I put 70% of my income towards the debt I could be debt free by the end of this year. However, that’s not being realistic. Be realistic about who you are as a person and a business owner. In the last couple of weeks, I have had to spend money on trademarks, copyrights, video equipment, websites, and much more.
Pay More Than The Minimum That Is Due
You will be in debt forever, if you only pay the minimum each month. As mentioned above, I put 30-40% a month towards my debt each month. I make my payments on the 1st of the month. All of my student loan debts are due on the same day. Any extra money I have is put on my loans on the 15th. This is very important. Set a date for all of your debts to be paid on. Then, any money leftover by a certain date add it towards your debt as well. This month, I was able to pay an additional $600 on one student loan.
Separate Checking Accounts
Set up a completely different checking account from your business and personal for paying off debt. I know some people get prepaid cards. Instead, I opened a free account to keep track of it all. All of my payments come out of there. It keeps it simple. Twice a month, I deposit cash into the account to pay off regular debt and student loan debt.
There are some days I wish I went in state for college and never attempted grad school. I would have way less student loan debt if I had. However, I’m here now and I’m able to pay off the debt. You cannot charge off student loan debt. Don’t be mad you have it. Just pay it. Create a plan of attack. It is possible to create and have a successful business while paying off debt. I am doing it daily.