It is so tough figuring out how to pay off debt fast if you're self-employed. You don't know what strategies are effective and where to start. You're not sure when your next project will be and your income is all over the place. One thing most people don't talk about is how much of a roller coaster can be for your bank account and financial goals being an online business owner.
Even without a regular pay check, here’s how to pay off your debts and other loans.
1. Level out cash flow problems
Stopping the cash flow problem is the first step to aggressively pay down debt as self-employed. Cash flow is the heart and soul of your business when you’re the boss. Apply some simple cash flow strategies to level out the inconsistency of self-employment income.
2. Use financial tools to track your debt
To help you pay off your debt, there are a lot of resources to help you manage your finances and keep a budget. Some web and mobile apps can help you find tax savings and includes tips so you can pay off debt fast and it is very convenient since it will put all your balance in one place!
It is key to monitor your budget aside from debt tracking and management tool. You may settle with a plain old excel spreadsheet if you want to do it low-tech style. Anyways, the most important thing is to see the numbers in front of you so that you will know the reality and exert more effort.
3. Go on a shopping ban
Going on a short-term spending challenge is one of the most effective ways to pay off debt. To control your spending, there are a lot of shopping ban strategies and different spending challenges that you can use.
4. Start a side hustle
One of the quickest ways to start paying off debt is to start an online business alongside your full-time job. If you have more income then you will have more money to pay off your debt. You can do different side hustles like working as a virtual assistant or becoming a paid freelance writer. Later on, after how many months, you will realize that it helped you a lot and you made huge progress.
5. Find a part-time job
Another option is to apply for a part-time job if you’re a bit shy of starting your own freelance business or side hustle. Your workplace doesn’t have to be so fancy, if you might be lucky, you might be given a chance to work in a place related to your hobbies or likes.
For instance, if you’re trying to cut back on the costs of a daily cup of coffee, then working in Starbucks could be a great part-time job while if you’re a book geek, you can try and work in a bookstore like Barnes and Nobles.
6. Sell anything and everything
Selling stuff you already own is one of the best things to jump-start your journey towards debt freedom. There’s a lot of money to be made from stuff in your houses like furniture, clothes, kitchen items or even your TV.
There are a lot of websites that make it easier for you to sell an item by just snapping a photo, write a short description and respond to some offers. If you don’t know how to sell, then that is not a reasonable excuse at all.
7. Use bonuses and refunds
If you will get some money back from the IRS, use that extra bonus to pay your debt. Aside from refunds from the IRS, use the money you receive to pay your debt if you received an unexpected bonus or refund like cash rewards, rebates, or over-payments on premium. If you will receive unexpected money like a raise from work or a windfall from a family member, you should not miss it.
There are many ways to pay off debt as self-employed even if it is not ideal. Just bear in mind that you are investing in the future of your business as well as your own future. It takes patience, dedication and discipline to keep on track just like any other goal.
You will find the financial freedom you are looking for if think of this as a long term change and not a short term change.
LLOYD J CAZES CPA