How I Plan to Payoff Debt While Self-Employed
So far working from home has been like a dream. Seriously.
I wake up at about 6:45-7:00 a.m. I feel rested and ready to take on my day. I have time to workout, shower, work on my yard, do housework, make homemade meals, and still “squeeze in” about 6-8 hours of work on my business each day during the week. My weekends are more relaxed, but I still usually spend a couple hours at some point each day working.
I also get to take sporadic breaks to play with my dogs and let them out more often to use the bathroom. If they were English-speaking dogs I’m sure they’d chime in and say they love me working from home too. 🙂
I’m loving the work-life balance I’ve had lately. I guess going from working essentially 2 full-time jobs down to working only 1 full-time-ish job. In fact, I might actually get to find my book for my book club this month. That hasn’t happened all summer so far.
The down-side of this is that I lost the income from that full-time job when I quit. 🙁
I no longer have the security of knowing EXACTLY how much I was going to make every two weeks and EXACTLY when the money would be in my checking account.
The good thing about this is that the “unknown” factor has pushed me to work hard at seeking new jobs and I’ve had some great opportunities come my way in the last couple of weeks. Things aren’t finalized yet, but if they work out it’ll be amazing!
One thing I’ve thought a lot about is how I’m going to approach my debt now that I’m self-employed. After all, becoming debt free is still a goal of mine and I know that once I’m debt free I will be able to spend more money on fun things and feel a little less stressed about the unknown that comes with self-employment.
So here’s my plan for paying off debt while being self-employed.
I Didn’t Change My Budget
I have been budgeting for more than my minimum debt payments in my monthly budget plans for quite a while now because of the snowball I’ve built up by paying off some credit cards with small balances. I decided not to lower my target amount for debt payments each month, but to be on the safe side I’m going to change how and when I make my payments.
Pay Minimum Payments At the Beginning of the Month
My plan is to pay only the minimum payments on each of my debts at the beginning of each month. Then as the rest of the month progresses I’ll have a better idea of how much I’ll be bringing in on my mid-month invoices. If I fall short of my goal I will skip my “extra” debt payment so I don’t have to borrow from my emergency fund to cover the shortfall.
Hopefully this won’t ever happen, but the uncertainty of freelancing suggests that it could. I don’t want to reduce my debt payments which is why I didn’t lower the debt payment line in my budget plan, but I do have a cushion of about $250 just in case my income would fall short.
If you are self-employed, how do you handle debt payments? What do you think of my plan to pay off debt while self-employed?
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