Debt is a terrifying four-letter word. It has some pretty dark connotations. For most, they bring about an image of an anvil teetering overhead. That anvil only grows in size and creates panic for whoever is underneath it.
In business, debt and debts happen all the time. They’re necessary in certain cases, especially if you need to build something or work out of an office space. You need to spend that money to ensure you have the things you need to conduct your business.
But what if that spending creates multiple debts? And what if those debts have different deadlines? These cause undue stress for entrepreneurs all the time. One option you have is to consolidate your debts with a loan from Latitude Finance. If you are looking to fix your debt crisis on your own, however, here are some options to consider.
Have A Plan
The most important thing you need when trying to get out of debt is a plan of action. Simply worrying about your debt won’t make it go away. More likely, your debt will continue to grow is you put off dealing with it.
Having a plan for dealing with your debt will make your life a lot easier to manage. You’ll be able to put a plan into action right away and start controlling your debt issues at once.
Save Where You Can
Entrepreneurs tend to dream big and take large risks.
Realising one’s dreams in business means sacrifice, but it can also mean big savings. Making some adjustments to what you spend your money on each month can really take a bite out of your debt.
For instance, Jesse Genet, a 28-year-old entrepreneur and founder of Lumi, had difficulties keeping her finances in order while starting her business. For 5 years she was in and out of credit card debt. By becoming an aggressive saver and giving up two major expenses – rent and vehicle payments – she was able to get a handle on her finances and watch her business thrive without worrying about debt.
Payments Are Your Friend
Creating a business takes time, and getting out of debt does too. However, there are different payment schemes that can help relieve that debt stress. Making minimum payments is one method, in which you simply make the lowest possible payment on your card as a starting point. Once you’ve created some capital, you can adjust your payment method.
The debt snowball is an excellent option to use as an entrepreneur – especially since you likely have various debts that need to be repaid. You can get the debt with the lowest balance paid off first, then concentrate at the next lowest, and so on until you’re out of debt. Studies show that focusing on these smaller amounts helps a person stay motivated.
Know Your Options
As you are plotting your way out of debt, you should definitely consider your options. As an entrepreneur, you are innately creative. Therefore, you may be able to identify more reliable methods for creating capital and getting out of debt. You work long hours on your primary business, but having a side hustle can generate backup capital that can be used to eliminate some of that debt burden.
Have a Backup Plan
Ideas don’t always work out, so it’s always good to have a backup plan in place. If things fall through, you’ll be responsible for the debts incurred. If you plan for this contingency, you can keep a level head as you plan your next step. You may have to return to your last job, or find a different one, in order to repay your lenders.
Be Bold, But Be Wary
Starting a business is exciting. The highs you can reach are amazing, but the lows will come at some point. Don’t let debt get in the way of your business’ dreams. Make a plan to halt debt in its tracks and get back to doing what you do best.