We have been talking about business debt recovery for quite a while, however, wouldn’t it be much better if you as business owner didn’t have any debt in the first place?! So, we gathered some tips on how to ensure a stable financial future and avoid debt for business owners altogether.
1. Make your overdue payments, starting with the debt with the highest interest.
That helps to save some money eaten by the interest. However, do not ignore other payments and use the saved money to pay off debts with lower interest. Paying the minimum monthly payments on all of your business debts, focus on the one with the highest interest.
2. Throw your credit cards away
Forget about using any credit card if you have already got into debt or feel you are going to. Follow a simple well-known rule: if you can’t pay for something with cash or a debit card, don’t buy it.
3. Use only as much money as is necessary
Changing your life style may sound off-putting and even frightening, but living frugally is a reasonable decision in case you face a mounting burden of debt. Cook at home instead of eating out. Visit recipe websites to know how you can use leftovers. Check local outlets and don’t go to clothes shops unless discount season starts. Don’t start the car if you can reach the destination on foot. You will not save a fortune, but if this way of life becomes a habit, the savings will really add up.
4. A friend in court is better than a penny in purse
When you can cover your minimum monthly payments, pay back to your family and friends. It is a good idea to add some low interest even if they don’t ask for that. There is nothing more precious in this life than our relationship with the people we love and care about. Money comes and goes, but family and friends stay beside us.
5. Think about future debts
Once you get rid of the burden of your overdue payments, don’t feel relieved or rush into shopping. Think about future purchases that may put you into a new debt. Today, almost every bank has a “money box” service. Start a “car” account if you are thinking of buying a new one. Every month put a certain amount of money there that can later become a considerable contribution into the required sum.
After you start to distribute money and manage your budget effectively, consider investing. It’s not the easiest thing in the world, but a high return on your investments may be a good step on the path towards financial freedom.
If you are a business owner, who does not have financial troubles yourself, but have customers who owe you, contact us for commercial collection services and we will be happy to help you out!