Debt can be a “mountain” in your life and sometimes challenging to tackle. These debts may include student loan debt, credit card debt, auto loans, or bank debt. Whatever your debt, I want to share with you four solutions to consider if you’re going to tackle your debt this year.
Consider Your Monthly Net Income
Your net income is the money you have left after paying your expenses, such as taxes. Therefore, you want to schedule your loan payment with money that you have left after paying expenses. Whether you are an employee on a W-2 or a sole proprietor with a form 1040, it is imperative to track your finances to know how to tackle your debt. In addition, you may have to go on a budget so that you can be consistent when it comes to paying off your debt.
Calculate Your Debt
You may have more than one debt to pay; maybe you have credit card loans, auto loans, student loans, and other loans that you want to pay off now. Depending on your type of debt, you may consolidate multiple loans into one monthly payment and also take steps to negotiate your repayment terms. You may click here for more information on how to get out of debt, learn about debt reduction strategies, and move high interest to low interest. After calculating your debt, it’s time to determine if consolidating the debt is the best way to move forward. See more here.
Start A Side Business To Offset Your Debt
If you have difficulty paying off your loans, you may consider starting a side business to offset your debts. Starting a business is easier than most people think. Also, you have all it takes to start and run your business. In addition, to start your business, it is imperative to identify your natural talents/skills, find your purpose and the people you will serve, and start building your business. There are a lot of problems that need solutions, and your talents may offer solutions to those issues.
When you start your side business, firstly, you may set up your business as an LLC or a sole proprietorship. If you set up your business as a sole proprietor, you may file your taxes with form 1040 and schedule C. After you make your gross income and figure out your net income, you may use the money left over to offset your debts.
Also, when filing your taxes, consider your tax write-offs because you may take home more money after you add your tax write-offs- including home office, office expenses, office equipment, internet, phone bill, or your travel for work.
Remember, when you start your business and your net earnings are $400 or more, you must file for taxes.
In conclusion, use your innate talents to start your business. Examples of natural talents include computer knowledge, science, arts, marketing, writing, creative imagination, statistics, data-driven ability, plus many more.
Get On A Budget
Many apps will help you create a budget to help you pay your debts; these apps may help you divide your expenses and make it easier for you to pay your debts. Also, you can learn more here for simple steps to create a budget to help you pay your debt efficiently. Some of these simple steps include focusing on your net income. For instance, as an employee, focus on your net income, which is your take-home pay, and create a budget for how much money you will take from your take-home pay to offset your debt. In addition, as a self-employed, ensure you are keeping track of your income and expenses to help manage your finances/taxes so you can keep track of the money you set aside to pay your debt. Secondly, track spending, including how much money is coming in and how much you use to pay bills and your debt.
In conclusion, you may consider these solutions to help tackle your debt.
- Consider your monthly net income.
- Calculate your debt (determine if debt consolidation may be right for you). You may see more here.
- Start a side business to offset your debt.
- Finally, get on a budget, track your spending, and set realistic goals. Also, plan and adjust your spending to stay on a budget.
