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I am a small business owner and am therefore dependent on my business for income. However, with the good times and bad times that every small business experiences, I never know what to expect.
This all came to a head after a couple bad months had me using my credit cards for things I normally wouldn't. I quickly racked up $2,000 of debt. While that isn't all that much as far as debt goes, my wife and I have been down the debt road before and have already taken drastic measures, like going down to one car for a year, in order to become debt free. Seeing the damage that my actions had done I quickly went to work figuring out how to pay off that sudden debt and how to pay it off quickly. I gave myself two months.
Saving Every Day
One of the things my wife and I do in order to save extra money is to set aside $33 per day. This roughly equals $1,000 extra in savings each month and we are usually very good about taking this step. In fact, we even did this when I was racking up the sudden debt and when looking back we probably shouldn't have, but that idea on saving gave me an idea on the debt elimination.
While we couldn't afford another $33 a day to go towards paying off the $2,000 debt I racked up, we decided we could afford $25. That one move made it possible for me to pay off $750 of the debt each month. So, after the two months, $1,500 of the $2,000, or 75% of the total debt, was gone thanks to this strategy.
Sacrificing My Extras
I don't have a lot of things that I would consider "extras" in my life, but I do have a few. One of the things I greatly enjoy is fishing. Since the in debt was thanks to my actions, I thought it only fair that I sacrifice what I enjoy for a little bit and put the money toward the credit card bills. So, I didn't buy any new fishing supplies for two months.
While this might not sound like a big deal, I in fact spend quite a bit on lures and other fishing products. Just as any other person who is serious with a hobby, I am serious about mine. Believe it or not, by not buying any new fishing equipment for the two months of my debt repayment I was able to pay an extra $200 toward the credit card tab.
Selling Memories
Even after saving more money each day and not buying my fishing supplies for two months I was still looking at a $300 deficit. So, I took to selling some things that I had been holding onto for some time in order to raise the funds. This was the hardest move that I made, but I decided I would rather be debt free than hold onto things that I like, but really don't need.
With that I sold a large chunk of my vintage Star Wars collection online and easily raised over $400. That amount was enough to pay off the remaining $300 and take care of extra interest that had accumulated.
Careful Moving Forward
In hindsight I probably should have dipped into my rainy day fund when my small business was struggling. However, when I was rapidly racking up the $2,000 in debt I really wasn't aware that it was adding up so fast. Therefore, I went back to my usual procedures and placed those credit cards out of sight so they are out of mind keeping me from getting back into debt, as it can happen faster than anyone can imagine.
