How I Run My Small Business Without Debt

And It Led to More Freedom Than I Could Imagine


Who: Liz and her husband, Jeff

Where: Minnesota

Debt paid off: $180,300

Time to payoff: 5 years

Business debt:

  • Three small business loans (that were personally guaranteed): $145,600

Personal debt:

  • Student loan: $21,400
  • Home Depot card (home renovation): $3,000
  • Car loans: $10,300

How they did it:

  • Zeroed in on priorities
  • Increased working hours
  • Picked up side jobs
  • Used YNAB
  • Budgeted “breathing room” to make it sustainable
  • Set a goal for payoff
  • Cut down on shopping and eating out
  • Planned simple meals and cooked at home

Income situation:

Liz has a highly variable income as a sole proprietor business owner. Jeff is a pilot but was working three piecemeal jobs during this season. 

The Beaudry’s average income didn’t ever exceed five figures while they were paying off their debt, and at one point, their family of four was living off $68,000 a year.

Liz Tells Their Story:

My husband and I don’t make an excessive amount of money. We’ve learned how to budget and be consistent. And through consistent budgeting, we managed to pay off over $180,000 in five years.

Liz and her family

In 2005, I was working as a marketing freelancer when I met the owner of a small company called Envision. They did branding and marketing work for small- to mid-sized companies in southern Minnesota. The owner wanted to shift her energies and I ended up buying the business from her. I took out a Small Business Administration (SBA) loan to do it. The sale happened in 2007—and the economy tanked in 2008. I learned very quickly the need to run a business on a cash in/cash out basis.

Despite the difficult economic conditions, I managed to turn a profit every year. During this time, multiple advisors told me “You’re always going to be in some form of debt,” and I subscribed to this way of thinking.

But having that debt was stressful, especially because my small business loans, of nearly $150k, were personally guaranteed. 

In 2011, I was done with the financial stress and I decided to run the business on cash. Once I made that decision, I didn’t spend cash I didn’t have.

As I was moving from a debt to cash-only business practice, I discovered the budgeting app You Need a Budget (YNAB). YNAB’s way of budgeting is fundamentally about only using the money you have, which goes directly against the assumption that to run a business you need to borrow. As I learned this way of zero-based budgeting, my mindset completely shifted.

I was overwhelmed when I first started, but I was determined to run my business with a different mindset. YNAB has been the catalyst for this change. Now I have all my business accounts set up in YNAB, and I know exactly where my receivables are going and when. Now, my stress over cash flow is non-existent.

Learn more about using YNAB to run your small business without stress.

We Decided to Tackle Our Personal Debt

As I started clearing my business debt, we were inspired to tackle our personal debt.

I told my husband, Jeff, “I think I can budget us to make this happen.”

I do all the budgeting in our family though it’s not my strong suit. I’m a creative and don’t think in terms of numbers and profit and loss statements. But I saw the value and was determined to learn how to run our financial lives efficiently and simply.

Jeff was on board. We both had to be at peace if we were going to do this, because it required purposeful decisions for both of us. For example, did we want the security of having money in savings? For us, it was more important to get out of debt.

How We Paid Down Our Debt

First, we took inventory on both the business and personal fronts. What exactly were our monthly bills? Quarterly bills? Yearly bills? What were our goals? Why were we doing this? 

Here are a few things we did:

  • I learned to meal plan and create simple meals at home.
  • We cut back on going out to eat. Now, we go out to eat once a week with our family after church (and sometimes on date nights). We rotate who gets to choose where we go. It’s a treat for us and our boys. It’s family time.
  • I stopped shopping. I love to shop—but I knew that was something I could cut. I have about three pairs of shoes. We live in Minnesota with changing seasons, but I don’t need 20 pairs of shoes.
  • I used to get my nails done regularly. I cut that out and have only recently started going for special occasions.
  • We learned how to reduce and we became resourceful. I studied minimalism and how to live more simply. We currently live in a 1200-square foot home. At one point, the transmission went out in one of our cars. With the help of a friend, my husband figured out how to put in a new transmission. That is only one example of many. It wasn’t fun but we’ve grown so much.
  • We leaned on our amazingly supportive family. I know this isn’t everyone’s story, but both of our parents are very supportive. We’re grateful. They encouraged us. My mom and dad would tell me things like “we have your back,” and they would take the boys so we could work, for example. All this to say is that it’s important to have friends or family who will cheer you on in your journey. 
  • Lastly, and most importantly, we kept giving. Allocating a portion of our money to various charities helped us to stay focused on what’s important. Many people might think it makes more sense during debt pay off to allocate those dollars to debt or a savings account. But we subscribe to a different way of thinking. If we focus on helping others, our own needs will be met. It’s a principle that we saw bear out throughout our debt journey. 

We Made Debt Payoff Sustainable for Our Lives

Many times, people assume getting out of debt is all about sacrifices. This isn’t the case. Even though we made a lot of changes, we were smart about those changes. We didn’t clip coupons. Some people think that getting out of debt means grocery specials and visiting 58 stores, but you don’t have to live on breadcrumbs. Yes, there were sacrifices, but they felt more like trade-offs. We knew we were making progress on the things that mattered most to us. 

People assume getting out of debt is all about sacrifices.

We learned to focus our effort and energy toward the things we were good at. For me, that meant working on the business to bring in more money. I knew I could work extra hours, and that money could be used, for example, to pay tuition for our sons’ Christian education (which is really important to us). My husband is resourceful and handy, so he works on everything around our house and on our cars. We went through a major renovation and still are. He’s done 95% of the work.

There were times when we wanted to vacation, but it was more important to pay down our debt. There were other times when going on a trip with our kids was a higher priority, so we moved the money earmarked for debt to the trip. 

Some may not agree with this approach, but it worked for us and helped us to develop a sustainable financial life. Everyone can pinch money in every area for a season, but it’s not sustainable. Good budgeting is about prioritizing what’s important, understanding how you’re motivated, and developing a plan that works for you. Budgeting doesn’t need to be a noose. It actually creates freedom.

Budgeting doesn’t need to be a noose. It actually creates freedom.

It Was a Humbling Experience

I’ve learned many things about myself in this process. It’s been rewarding but humbling. During our debt payoff, Jeff and I waited tables during the summer at a dinner club near our home for extra income. It was not fun serving tables on a beautiful summer day, but these choices are what got us ahead. We were able to pay cash for a second car we needed. I’ll never forget the look on the salesmen’s face when Jeff pulled $3500 worth of cash from his pocket to pay for the car. 

We’re grateful for that job and those experiences. Ultimately, we made these choices because our vision was bigger than the sacrifice.

We’re Leaving a Legacy

We have two boys, ages 10 and 12. We didn’t talk specifically about the debt-free goal with them. But we did tell them that they need to pay cash for everything when they are older. They are slowly learning.

They have their own versions of a budget: it’s YNAB on paper. They get $5 every week. It’s not tied to chores—it’s about teaching them to manage money.

We keep it simple. First, we tell them to put 10% to giving and 10% to savings. If you’ve done that, the rest of the money is yours to spend however you want.

My oldest wants a fat tire bike and an iPod. He’s enamored with Lego sets. So I ask him questions: do you want to spend $50 for Legos or $50 towards your iPod? If you spend $50 now on Legos, you’re going to have to save for another 10+ weeks to get $50 towards your iPod. That puts things into perspective for him and his eyes get big. 

My other son wants a pet gecko. We talk with him about the costs to buy the gecko and the equipment and the food. He likes to spend his money and has yet to save for his gecko. That’s okay. It’s a continual learning experience.

What YNAB has done is created a passion in us to teach our kids about good money management. With this foundation, they’ll soar. It might not always be easy, but they’ll have the principles and foundation and can go back to them.

Learn more about teaching your kids how to budget.  

Give Yourself Grace During Debt Payoff

My goal was to pay off our debt by age 40. I hit the goal at age 42.

If you are in the middle of your debt payoff, don’t be discouraged if you miss your goal. I set a goal and I missed it. What if I had quit then?

When I missed my first deadline, we decided to celebrate the small wins instead of focusing on the missed goal. So, after every loan was paid off, Jeff and I would celebrate.

It took longer than I anticipated, but we got there because we didn’t give up and we had faith. We also continued to give to charities that were important to us. It kept the focus off us and on others.

We became debt free in 2019—five years after we started. We still have a mortgage and we’re okay with that. We’re shifting to other financial goals now. 

To those still going through debt payoff: give yourself grace and room. It’s okay to mess up. It’s okay to not be perfect. Stay aligned. Keep your vision in front of you. You’ll get there.

Learn more about Liz’s business, Envision and how she helps organizations grow with branding and marketing strategies by using a proprietary culture-measurement software, MDNA Cloud.