Whenever we are in a situation where we have a problem to solve, the best place to start is by admitting there is a problem. This is the same rule when it comes to our money problems and debt. We need to look debt in the eyes and confront it. We need to admit we have something to deal with here and not allow ourselves to get distracted or swayed. By looking at your debt in the face, you are able to grasp the extent of it so you can determine how best to get rid of it.
In today’s post, I am going to coach you and support you through the process of looking debt in the eyes so that you can get on a plan to get out of it. Lets get started.
Step 1. I want you to go through your house, wallet, purse, etc., and collect together every statement, account, bill and final reminder that you have.
Step 2. Using what you collected in step 1, add together EVERYTHING that you owe to other people or organizations. This could include your mortgage, rent, utility bills, property tax, credit cards, store cards, overdrafts, loans, money borrowed from friends, etc. Leave absolutely nothing out of the equation. I need you to account for every cent.
Step 3. Write each and every amount that you got from step 2 down on a paper or in a spreadsheet. Then total them up to the nearest cent. Go through this twice to make sure your numbers are accurate.
Step 4. Next, write down the interest rate on each of these debts. This will let you see which of your current debts is costing you the most money due to interest.
Step 5. Take a breath. I know this very well may be a very difficult process for you. Facing up to your debt and looking it in the eyes can be terrifying, especially if you’ve been ignoring it for a while. Don’t worry though. WE are a team, and you are not alone. WE are going to get you through this.
Step 6. Write down your total debt including interest like this: On (date) I (name) owe $…. This is the figure you are going to focus on getting smaller and smaller until it eventually disappears.
Step 7. Lastly, make sure this number doesn’t get any bigger. Start making small changes in your life to save money and put it towards your debt. Here are a few ways to get started:
Save Money for Your Family with These 9 Steps
Secrets to Successful Budgeting
Five Great Money Saving Tips
You can always send a question on my contact page or post a comment below. Your journey is my journey and I will do my best to help you with this process.
Remember to chew off one chunk at a time at your own pace and eventually you debt will disappear.
Wishing you the best of luck.
For those of you who have gone through this, please share any other advice you might have.
Very interesting and informational.
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Sure. Just make sure to link back to this site.
I can’t get the search to work right on this site? I’m looking for a post from a while back, but nothing is coming up. Does it work? It was a great write-up.
Yes it works. Checked it this morning. What post are you looking for?
Thanks for the post, do you have any other similar related posts?
Yes, just click on my page titled “Money Tips”