Don’t you hate it when you owe someone? Whether it’s a favor or money, owing someone puts you in an awkward situation. Then why are so many of us, especially small business owners, okay with debt?
A new study says that our youngest generation of Americans, Millennials, are in more debt then ever before and don’t care to have a nest egg for the future. I know, when you don’t have a job or during tough times, it’s hard to be debt free, but it’s not impossible.
There are ways to be debt free, but it requires some planning and work. As an accountant who happens to be a bookkeeper, I often help my clients work their way out of debt by creating a plan and looking towards the future. So this week, whether you’re a small business owner or a Millennial in debt, I want to guide you towards being debt free. Here are some ways to achieve debt free living:
- CREATE A BUDGET – If you’ve never worked within a budget, then this is the reason you’ve amounted so much debt. In order to become debt free, creating a budget and sticking to it is the only way to pay off your bills. This means writing down exactly how much you earn and writing down each and every expense. You should also include your debt, and any savings you want to accumulate. At first you may not be able to save, but as you lower your debt your savings can increase.
- SET A GOAL – Where do you want to be financially next year? Where do you see yourself in five or ten years? If you haven’t asked yourself these questions, then now is the time to do it. You should always be thinking financially ahead. Set a goal and go for it! If you have debt, make sure you pay off the most expensive debt first. You can do that by paying off your credit cards and bills, but make sure you don’t just pay the minimum. Paying the minimum will keep you in debt too long.
- DON’T OVERSPEND – It’s easy to say you need this or that for your business, but think twice when making a business purchase. Consciously try not to overspend or look for a better deal on a necessary product. You can also talk to your vendors to see if they have any deals for loyal customers.
- SAVE, SAVE, SAVE – They say a dollar saved is a dollar earned. After you’ve paid off your bills, and paid off a large part of your debt, put some money away. Even if you can only put away a few dollars, it will add up and get you into the habit of saving for the future. So forget the Starbucks coffee once in awhile and put those $3-$5 a day away for a rainy day. You’ll see, it does add up.
Being debt free doesn’t have to be a dream, it can be your reality. With a little help from your bookkeeper or accountant, you should be able to come up with a plan to get out of a financial mess. If your bookkeeper or accountant tells you that being debt free is impossible, then call me or anyone on the Brigade Bookkeeping team. Our goal is to keep our clients books in order and that means helping them be debt free.
Here’s to NOT owing anyone a thing. Have a great week everyone!