recently, i achieved a HUGE accomplishment…
i paid off ALL my student debt!
as most small business owners know, it’s easy to rack up payments as you launch into a new venture, but i’m here to show you how to get out from under it all. keep reading for my tips on how to pay off debt as a small business owner.
1. be frugal, but not cheap
paying down debt can be a huge priority in life, but letting it dominate everything can be a recipe for disaster. when it comes to cutting down expenses, i like to operate under the “be frugal, not cheap” mindset.
that means i’m careful with my spending, but i also don’t hole myself up and don’t enjoy my life.
instead, i spend purposefully on things that give me joy and avoid mindless spending that is unneccessary. if that means i take the afternoon off to head to a brewery with grayson, i do it! take time to enjoy life!
your debt journey doesn’t have to be painful. spend a few dollars here and there and keep enjoying your life along the way.
2. don’t go overboard with savings
from a very young age, most of us are taught to save and have a large savings account. but while you’re paying off debt, it can be hard to make headway if you don’t adjust your savings goals.
as you pay down expenses, plan to keep three to six months of emergency funds in savings and then pause savings until debt is paid off!
i know it’s hard not to save when you’re earning money, but having a huge savings means nothing if you still owe others money! it can feel so good to get a good check in your business and want to hold on to it so tightly, but the best thing you can do it throw as much of it (after bills + basics of course!) at your debt!! i would check my balances every month and after paying basics, take what was left and put 90% to loans and 10% for fun – i work hard and deserve a lil extra fun too!! (remember to include fun money in your monthly budget too! like i said above, you deserve to enjoy life too!)
3. pause on investments
as you work to pay down debt, i recommend pausing on funneling your income to investments. similar to my thoughts on savings, the quicker you can pay down debt, the quicker you can get back to paying yourself and not others.
getting rid of debt and finance fees should be your first priority before setting aside funds for down the road.
4. prioritize your debt payoffs
when it comes to paying down debt, focus on your highest interest debts first. these types of debts accrue interest the fastest so tackling them first is important! (and also helps you feel really good as you break up these payments!)
even if your highest interest rate is 1%, paying those down first means that 1% less is going to someone else, instead of back to you in the form of savings or valuable spending to boost your business.
there is nothing like the freedom of being debt-free. no matter how much you have accrued, starting on the path to paying down what you owe to others is worth starting right now.
going debt free has been a huge step for me and it can be for you, too. want further tips for building your business so that you can pay down your debt FAST? i would love to work with you! book a call with me here.