What steps have you taken to pay off debt?

[20percent]

I'm soon going to be in a situation where I have about $20,000 in debt I will want to pay down as quickly as possible. This is business debt, not personal, but it will be the first big debt for the business since I started it. I'm hoping some of the ideas you have on paying down personal debt will help me with this business debt as well.

[riverwed070707]

You'll find tons of ideas browsing this forum. For us personally, we cut out fun spending, skipped vacations for a couple years, skipped eating out most months, downsized our home, worked second (and third!) jobs, and lived pretty no frills until we got to a place we were comfortable. Approach might be different for a business loan but in general I'd make sure there was cash flow to repay the loan before taking it out rather than taking a loan in hopes of increasing revenue enough to repay it -- that's when you'll find yourself in trouble.

[Randomsaver]

My half cent is business debt is an investment debt and as such pays (or should pay) itself given time as must be outlined in a business plan.

[kaufc]

You'll find tons of ideas browsing this forum. For us personally, we cut out fun spending, skipped vacations for a couple years, skipped eating out most months, downsized our home, worked second (and third!) jobs, and lived pretty no frills until we got to a place we were comfortable. Approach might be different for a business loan but in general I'd make sure there was cash flow to repay the loan before taking it out rather than taking a loan in hopes of increasing revenue enough to repay it -- that's when you'll find yourself in trouble.

This is true for me as well. I had a lifestyle overhaul to cut expenses and focus on the goal of clearing my debt. I learned that it is important to start dealing with what's causing the debt -- the attitude and bad habits that led to my indebtedness. The moment I decided that it's time to get out of debt, I had to use my savings because I rather lose it than pay for larger interests. I also stick to the practical ways of cutting down expenses such as bringing lunch boxes instead of eating out, or renting a movie instead of going to the theaters. It may be a painful process at start but once you have gotten used to it, you will surely be on the road to being debt free soon. Best of luck to you.

[rob62521]

The way we paid off debt was to find ways to save money, sold things, worked extra hours, and in some cases did without things.

[summerdsea]

Make a budget that works for you and your family and stick to it! Always have a sticky note or some kind of reminder why you are doing it. Keep your eye on the long term goal!

[Atretes1]

I paid my debt off by working 198 hours every 2 weeks. Now I am working that debt free and saving money

[tripods68]

I paid my debt off by working 198 hours every 2 weeks. Now I am working that debt free and saving money

We had about 37K in cash reserve. After listening to Dave Ramsey last January, we finally had the motivation to just pay off our outstanding debt except mortgage. in Feb we paid off the remaining balance on my Subaru WRX of about 2K. We took 18K from our cash reserve to pay the service retirement last April--paying for the last 5 years. Paid off the equity loan in March of about $4500. Then I decided to sell my WRX just (2 weeks ago), not because I didn't love it anymore, it just didn't make financial sense anymore. I didn't like the idea--driving a car that will depreciate in value year after year. So why not buy a used SUV that already depreciated most of its value. So I found used SUV that I paid $3400 cash and runs great still.

[mrpaseo]

Make a budget that works for you and your family and stick to it! Always have a sticky note or some kind of reminder why you are doing it. Keep your eye on the long term goal!

This is the key (budget), and what we have done. Once we built our budget, we lived within it for about 10 years. Over those years, we received annual raises and other rate increases but we did not adjust our living style so we used all that extra money to pay off our house in the 11th year.

A budget is the way to go.

[basic flair]

First and foremost, make the decision that your goal is to be debt free in x number of years/months.

Assess what is realistic and do your best to plan for the unexpected; your first plan will most likely not be your final plan, don't be too hard on yourself.

[Jovanny]

Make a plan, chalk out your expenses and know where you need to cut down to set aside funds for the debt payment. My credit union allows me to even skip a payment once a year. Ask your lender for any such provisions.