Consumer-Debt1-300x200Debt, whether it’s connected to a small business or personal finances, can create stress in our lives. Some people deal with that better than others; some don’t feel the stress at all, comfortable in what may have been a conscious decision to create that debt, and confident in the ability to erase it in a timely manner.

One of the keys to successfully managing debt is to have a structured plan, says Ben Harvey, the 39-year-old owner of Harvey Financial Group and a wealth management advisor at Northwestern Mutual.

Harvey has clients who are business owners and others with personal debt problems. Either way, he works with them to create a road map to eradicate the debt and build assets.

“Business debt is very similar to debt on the personal side,” Harvey said. “It has to do with money coming in, money going out … how they feel about the debt … are they risk takers … can they negotiate with the bank to see if they can get a better deal.”

For a startup business, it’s difficult not to acquire debt immediately.

“There are lots of companies that have to start with debt right away, because they’ve got capital they’ve got to buy or they’ve got lease payments they have to make,” Harvey said. “Even if they have outside investors, a lot of times that cash is in the form of a note, debt that has to be paid back over time.”

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A Northwestern Mutual survey shows nearly half of those individuals with debt have balances in excess of $25,000 — and that’s not counting mortgages. The average debt for those households is $37,300.

It’s easy to see how many — 26 percent have personal debt higher than $50,000 — can’t see a light at the end of the tunnel.

“I think people sometimes get stuck in their current situation without thinking how it could be better,” Harvey said.

At my home, more than $50,000 in debt was paid off in the last two-plus years. That took sacrifice, discipline and an overwhelming desire to get debt-free (except for that pesky home mortgage).

Yes, we passed on a few trips to have fun, see relatives and enjoy life. And we skipped a lot of meals at our favorite restaurants to eat at home. But it was worth it.

More of our money has gone to paying off the mortgage earlier, furthering our savings and, theoretically, enjoying life even more.

Alas, now we’re back in debt — which stresses my wife greatly — but it couldn’t be avoided. Our backyard makeover was necessary, expensive and long overdue. Our lovable dogs and other factors had turned part of the big backyard into a muddy mess.

Now we’re just a couple of days from finishing a major project with new sod, rock perimeters, an extended deck and large flagstone patio below the deck.

Basically, we spent this summer’s vacation trip to Italy on the backyard, but it was the right choice. And we have a gameplan to pay it off before Thanksgiving, a task we will be thankful to complete.

Mr. Harvey, I’m sure, would approve.


Editor’s note: Check out the Colorado Springs Business Journal’s print edition June 9 for a detailed story on the impact of debt on business.