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Solopreneur Money

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Back to Basics #5 – Debt Liquidation, Ep #145 

Debt isn’t necessarily a bad thing. Many solopreneurs use it to help build their businesses to make more money. However, taking on too much debt can hinder you from achieving your goals.

Debt liquidation isn’t fun to have to do, but if you are serious about building wealth, then you need to become serious about eliminating debt.

If you have debt, you won’t want to miss this episode. You’ll learn how to effectively liquidate your debt through snowballing so that you can start building your wealth to get started living the life you want.

You will want to hear this episode if you are interested in…

  • What debt liquidation is [2:02]
  • What snowballing is [3:35]
  • Why have debt [7:22]
  • A story [10:12]
  • Your call to action [13:20]

Debt liquidation

You probably know that debt liquidation is paying off your debts. What you may not know is how to effectively rid yourself of debt. If you have lots of debt, the idea of paying it off can seem daunting. It may feel like you’ll always have debt hanging over your head.

There are some people that recommend not saving any money until all of your debts are paid, however, I feel like this can lead to more debt. Listen in to learn why.

I advise my clients to save a bit of money while they are paying off their debts that way they can have a bit of an emergency fund in the meantime.

How to use the snowball effect to pay off your debts faster

If you have multiple types of debt like student loans, car payments, credit cards, or home equity loans, I recommend using the snowball effect to get it all paid off.

Snowballing is done by paying the biggest chunk of your cash flow towards the loan with the highest interest rate. Once one loan is paid off you can take the funds that you were using for that loan and put it towards the next one. Just like a snowball rolling downhill, this way, your individual debt payments get bigger and bigger as you move down the list of loans until they are all paid off.

Get started

Now it’s time to get serious about paying off your debts. While many people feel that they need to direct all of their cash flow into debt payments, you shouldn’t neglect your savings while liquidating your debts. It is important to build up a healthy emergency fund so that you won’t slide back into debt at the first bump in the road.

Listen in to learn tips on how you can finally get those debts under control so that you can begin living the life you truly want.

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