You run a business which often means doing whatever it takes to get things done. For a lot of small business owners, that means using personal cash flow and credit to support business expenses. Somewhere along the way your personal credit cards, loans and medical bills piled up with no clear plan to pay them down. When you’re self-employed, business and personal money blur together fast, and irregular income makes it worse.<\/p>\n\n\n\n
The way out comes in two moves: separate and inventory the two sides, then match your personal unsecured debt to the right path. <\/p>\n\n\n\n
Separate your business and personal money first, then inventory your personal unsecured debts. From there, match them to one of four paths: a do-it-yourself payoff, credit counseling or a debt management plan, a debt consolidation loan, or a debt relief program. A free evaluation can tell you your options.<\/p>\n\n\n\n
When the business needs something, you find a way to pay for it and sometimes that means dipping into your personal finances and credit. Equipment, software subscriptions, a last-minute flight to see a client: it all goes on whatever card has room. During quiet weeks, personal bills get pushed onto credit too, just to keep the lights on until the next payment clears.<\/p>\n\n\n\n
That’s the nature of self-employment, not a personal failing. If you want a companion read on keeping your business finances healthy, our guide to building a solid financial foundation<\/a> covers cash flow and business credit in more depth.<\/p>\n\n\n\n Start by giving each debt a clear owner. Follow the SBA’s steps to separate your business and personal finances<\/a>:<\/p>\n\n\n\n Here’s a discipline habit that works when income swings: set your monthly budget baseline off your lowest-income month in the last year, not your average. An average assumes good months that may not show up. For more on budgeting around irregular income, read our guide on dealing with debt when you’re self-employed<\/a>.<\/p>\n\n\n\n Once the two sides are separate, inventory only your personal unsecured debts. That’s the list you’ll work from next.<\/p>\n\n\n\n Not every debt qualifies for the same solutions. Here’s how eligible and ineligible debts break down.<\/p>\n\n\n\nHow to Untangle Your Personal and Business Finances<\/strong><\/h2>\n\n\n\n
Separate and inventory your business and personal finances<\/strong><\/h3>\n\n\n\n
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Then, set a baseline you can actually hit<\/strong><\/h3>\n\n\n\n
Which personal debts can actually be helped?<\/strong><\/h2>\n\n\n\n