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Dawn Tulman
Dawn Tulman
Dawn Tulman, 39, is a small business owner who lives with her husband, Rob, and children, Zachary, Alexis, and Nicholas, in West Hills, Calif.
Debt free: 4 years

My challenge: Running a business

My husband and I used to fund all of our living expenses on credit cards when we were starting a software company with my husband's family. The business was doing well, but it would take at least five years for it to turn to profit. We realized it wasn't moving quickly enough for us. If you're buying groceries with your credit card, something's wrong.

We were in between $15,000 and $20,000 of debt and had to settle out most of our accounts. But now I haven't had a personal credit card in over a decade, and we've been debt free for about four years.

We forego a lot of things like vacations, Starbucks coffee and eating out. When we have large expenses, like replacing a failed transmission, we opt to use our savings. Otherwise, we would be paying more in credit card interest than we earn on our savings account.

But I own two small businesses and running those without debt is more challenging.

My solution: My husband and I run a computer services company, and since the business is more service-based, there often isn't a need to use credit. We have customers pay us the same day as the service, which helps us generate enough cash flow.

But once we had to install $10,000 worth of computers for a real estate company. My debit card has a daily limit of $5,000, so we made a deal with the customer to purchase the computers.

I also have a product-based company that I couldn't have launched without credit. I had to make an initial investment in 2007 to make the product before the first shipment was made at the end of 2008.

The product is a jewelry box with a hidden lock mechanism, so I'm meeting with a mainstream gift seller soon to have it sold in stores, and I expect that will bring in cash flow to help pay down the business debt. I'll still keep a credit card for the company because it's easier to keep track of expenses, but I won't let us get crippled with debt we can't pay.

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Last updated December 08 2009: 7:38 AM ET
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