As a self-employed individual, you know how important it is to stay on top of your finances. One of the most important characteristics of successful entrepreneurs – self-starters – is discipline. An honest evaluation of your personal finances or business finances will provide you with all the cannon fodder you need to determine whether you are in the black, or in the red.
Too many newbies believe that their business persona is separate from their personal persona. While this may be true at some level with large corporations, it isn’t necessarily the case with a one-man business. Your fortunes are closely linked to the prosperity of your business.
Discipline Defeats Debt
If debt is your problem, and it so often is, do you have the discipline to stop piling on the debt? You may believe that multiple lifelines are available to you as a business owner and that you should exhaust them as often as possible if debt begins to spiral out of control. While this is true at some level it is important not to repeat the mistakes that landed you in debt to begin with. It is imperative to remain solvent in your business.
If you have used debt consolidation to eliminate similar debt like credit card debt at a lower interest rate than the prevailing debt, congratulations. Debt consolidation is one of the most effective ways to get out of debt for less than you owe. Once you have freed up credit, try not to exhaust it by running up debt all over again. That’s where discipline comes into the picture – it’s important to stop using debt to propel your business.
Your Lines of Credit
Each line of credit that you apply for is likely to have a different interest rate associated with it. Certain lines of credit such as credit cards and payday loans have much higher interest rates than traditional loans. The interest rates charged on credit cards are particularly high, sometimes in the region of 20% – 30%. The problem with high interest repayments is that it will take you much longer to repay the principal on the loan, especially with revolving credit.
Debt consolidation options on personal loans, credit cards and business loans have proven to be highly effective at reducing the overall burden these options place on you. With debt consolidation, the interest rate that you pay is lower than the interest rate on your existing credit card debt. Remember, it is easier to deal with a single loan at a low interest rate than it is to deal with multiple lines of credit at varying interest rates. For one thing, if you have multiple loans these typically require payment at odd intervals. It’s also difficult staying on top of these repayments, since they often come from different accounts.
Once again, the best way to manage multiple outstanding loans is a debt consolidation option. You’ll avoid all the fees associated with overdue payments, missed payments, and revolving interest charges. Knowing how to pay down your debts can be challenging even for the most astute business individual. By wrapping up all your debt in one neat loan, you can eliminate all the pressures from creditors, and focus on a debt repayment plan at a lower rate. While it is not advisable for everyone, debt consolidation is certainly a viable solution for many people.