3 Ways to Fast-Track Your Way out of Debt When You are Self Employed
In a hurry to pay off your debt? Are you self-employed and unsure where to start? If your income fluctuates, the prospect of paying off debt may seem overwhelming. Here is how to reverse your plunge into debt by jumping on the path to pay it off quickly.
- Pay Down Your Debt with a Percentage
Set a certain percentage of your income to go towards knocking out debt. This is a better option for individuals whose income lacks consistency. If you set aside a percentage to put toward your debt, you will be freed up to make consistent payments regardless of your income.
To create a percentage that works for you, look at what your average income was for the past few months. Then create a bare bones budget, which includes only what you need to get by. From there you can leverage discretionary spending with the gap that hopefully remains between your average income and your bare bones budget. That gap is your discretionary income and can be used to pay off debt (and to celebrate with). Consider whether you have any wiggle room to put more towards debt each month and then from there you can determine a percentage that you are comfortable with, leaving room for all of your necessities.
Issue Yourself a Shopping Ban One of the best ways to pay off debt quickly is to go on a spending challenge. You can choose from a number of spending challenges, including a 30-day no spending challenge, a year-long shopping ban, a spending diet (where you challenge yourself a small spending allowance) or another challenge you feel will suit you while enabling you to maintain your goal of getting out of debt fast. Any money you save can be allocated towards extra debt payments.
Set Up a Rainy Day Fund You never know what the future holds. But while you are trying to get out of debt, it is wise to set up a fund for emergencies that will keep you from getting further into debt. Make a goal of saving three to six months of expenses in your rainy day fund. Take baby steps to build it up – even with as little as $10 a week.
These are only a few of the many steps you can take to get out of debt quickly. If you are determined to fast-track your ride to get out of debt, contact us for help. Visit us online for more info!