Millennials are being wrongly accused of making poor choices during their formative adult years. News articles broke out over the last couple of years attributing millennials’ lack of money-saving strategies due to their entitled attitude. One of the most popular commentaries was a millionnaire claiming that millennials can’t buy homes nor save money because they are spending on expensive coffee and avocado toast.
The truth is, every generation has its own hardworking and entitled people. The odds are simply stacked against millennials because of the current state of economic affairs. In fact, there are many millennial innovators and entrepreneurs who want to contribute to society but cannot do so because of financial constraints.
Punch Associates, a well-known credit card debt financial advisor company knows this predicament very well. As a company that has been dealing with millennials who are suffering from credit card debt, Punch Associates want millennial entrepreneurs to know the truth about debt in present times and how they can avoid it.
It is recommended to pay any outstanding debt before starting a business requiring a large capital.
When starting a business, raising capital is one of the things people should consider. There are two types of business ventures – one that has a high barrier entry and another which has a low barrier entry. High barrier ventures often require investors, venture capital companies, and the help of friends and family to get the business started. Whereas low barrier ventures do not require a lot of investment.
If you are starting a high barrier business venture, it is best to pay any outstanding debt first. Student loans are one of these types of outstanding debt that may get in the way of building a business. At present, student loan debt continues to burden Americans, with over $ 1.5 trillion in borrowed value.
Whether it’s student loan debt, high monthly mortgage, or any other recurring payments that require most of your income, focus on taking that out of your list first. Then, you can start focusing on your business. Otherwise, pick a business venture that requires little to no capital.
Credit score matters when starting a business.
One of the things that can give you a great start in the world of entrepreneurship is having a good credit score. When you have a good credit score, more lenders would be willing to provide you with the business loan you need for your venture.
Some of the ways to improve your credit score include the following:
Paying your bills on time: Paying your bills on time helps improve your credit score by increments. A simple scheduling app can help you get this done, or have an option to automate your payments through a debit card.
Keep credit card balances low: Your credit card is a valuable tool for spending, and it is also an indicator of your spending habits. You can improve your credit score by keeping monthly balances low and paying them off at the maximum possible amount every month.
Don’t close unused credit cards: Unused credit cards can still be proof to lenders that many companies have approved you based on your income and spending habits. It is best to keep this and request for waiving of regular fees if possible.
It may take time to improve your credit score, but see it as a way to open up gates of opportunities for you as an entrepreneur.
Don’t be crippled with credit card debt.
Another type of looming debt that can make or break your business is credit card debt. Forming a capital for a high-barrier business may mean you need to turn to a credit card company to get funds. Although a good move for many who have a promising business, others get stuck in a cycle of debt from a single tempting offer.
To avoid credit card debt, you need to have a strategy beforehand in paying it off successfully. However, it is understandable that some entrepreneurs get caught in this problem. Some of the ways to pay credit card debt successfully include the following:
Prioritizing credit card payments: The first step is to pay the high-interest credit card first. High-interest credit card debt can quickly pile up over time, which increases your total amount of balance.
Set aside a specific portion of your income for paying the debt: Facing debt means having a strategic balance with your assets and liabilities. When paying credit card debt, you must set aside a specific amount of your income rather than using the leftovers to pay.
Consider getting help: There are some debt consolidation services that you can avail to help compile all the payments and provide you with a single, lower monthly payment. This strategy can help you manage the amount of debt that you have even without increasing your income.
There are many creative ways to increase your income and avoid debt.
The rise of the digital age makes it possible for entrepreneurs to scale their business, increase their income and eventually pay off debts.
Many business owners turn to online entrepreneurship because it presents many benefits such as lower overhead costs, automation of services, and the ability to reach a wider audience.
Whether you’re a millennial who’s just getting your feet wet in the world of entrepreneurship or someone who wants to succeed in debt reduction, these strategies will hopefully give you the insight to achieve your goals.