(Guest post by Carrie Smith)
When you read most advice online about getting out of debt it comes with two tips: make more money and/or spend less.
So naturally, when I decided I wanted to be debt-free, the first thing I did was look at ways to raise my income.
In my estimation it’s easier to choose this route because — if you do the math — the more money you make, the faster you can pay down your debts.
So I started a side business to boost my income and get out of debt faster. Here’s why!
Starting a side business…
1. Can massively boost your income.
I was already working a full-time accounting job, but I needed something else that would bring in more income throughout the year — not just during tax season.
That’s when I discovered my love of freelance writing, and my solopreneur business was born. I slowly started seeking out clients who needed financial writers for their startup and business blogs.
I have an editing background, so it wasn’t too difficult to research the facts and list out my ideas for each topic. As my skills grew, so did the amount of money I could charge for freelance writing projects — and every penny went towards paying down my consumer debt.
2. Makes you get organized.
There’s no way you can start a business without getting your finances and paperwork in order. The same goes with getting out of debt. You’ve got to create a spending plan (aka budget), write out all your debts, and carve out a roadmap for which ones you’ll start paying off first.
You can’t expect to regain control of your life if you aren’t following an organized plan. This is especially important when managing your time.
You basically have no (social) life when you’re dedicated to paying down debt. It feels like you’re constantly working. In order to keep your sanity, you’ve got to be organized with both your time and money.
Getting organized is essential to running a business and reaching your debt-free goal.
3. Ensures you reach your goal.
Starting a side business — on top of everything else going on our lives — is hard and takes a lot of dedication. Much like getting out of debt.
If you aren’t willing to work hard and do whatever it takes, your business will never succeed, and you’ll never reach your ultimate goal.
Once you have a target, it’s easier to aim, shoot and hit your goal, than if you’re just wandering down a random path. Having a business will give you the jump-start you need, and can help you be debt-free a lot sooner than you originally planned.
That’s what happened to me! After 14 months of working days, nights and weekends, I finally made enough money with my freelance business to pay off all my debt.
It wasn’t easy, but starting a side business was one of the best things I ever did! Not only did it help me reach my financial goal, but I got a better handle on my money overall.
And because I took these steps, I was recently able quit my full-time accounting job and am now officially my own boss. Debt-free and all!
– Carrie Smith is the founder of Careful Cents, a community aimed to help serious solopreneurs and full-time freelancers make valuable connections and grow their businesses. Find her on Twitter @carefulcents.
Photo by liamont
Kristina Tahnyak
Tahnya is a Certified Financial Planner and former Investment Advisor turned marketing and communications professional She holds a degree from Concordia University, is debt free and currently works in the field of digital marketing.
Sounds like starting a business was the perfect answer for you. I think it’s a great idea as long as it doesn’t take a lot of capital to start up. Being that you’re already in debt, you don’t want to go further into debt trying out a venture that may not end up working. If it doesn’t require much capital, then it sounds like a great idea to try out for awhile and see if it has any legs.
Great advice @Jake. It’s important to start out small when you’re in debt, before starting a large business venture. Then if you’re successful, you can grow with your business and increase your investment of time and money, as your revenue grows. That’s what I’m doing now, and it was a smart choice for me!
To some extent I think over the next decade or so we’ll all be self employed in some form. Starting small and working hard is the best way to not just get out of debt but also to start your own business. It doesn’t hurt to slash your expenses and have a healthy emergency account in place too. So glad you’re able to do work you love now because of your financial decisions.
Thanks for the great tips! Honestly I believe one of the best ways to get out of debt is to consolidate your debt. Many people find it overwhelming when they start receiving tons of bills in the mail. It’s much easier to handle one debt, and to make one monthly payment. Thanks for the great post!
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