4 Practical Steps to Get Handle on Your Debt

It’s Time to Know Your Numbers

When it comes to your health, you often hear the adage “know your numbers.” You need a baseline to monitor your progress or lack thereof. If you don’t know where you’re starting from, you won’t have any idea how you’re doing.

I say the same applies to your finances.

While living blissfully ignorant of how much money you owe may seem like a good short-term plan, let’s face it, it’s no plan at all. In the end, you’re only fooling yourself and probably doing a horrible job at that.

If you’re like me, a single, 50-something woman with lots of debt, you’re afraid to see those numbers. You know they are significant. Scary even.

It’s time to grab a notebook or open your computer and take a deep breath. Gather your bills, statements, account numbers, and passwords — all the records of what you pay — in one place. It’s your moment of truth.

Take these four small steps to getting a handle on your debt.

Write down each credit card with the total amount due, interest rate, and minimum payment.

Add your mortgage or rent, car payment, and any loans you have outstanding.

For me, this was a tough part of the process and the reason why I avoided it for so long. I knew it would take me years to pay off my debt.

Write out how much you pay for your phone, cable, utilities, groceries, gas, eating out with family and friends, etc.

Examine your debit and credit card statements to find all those charges you make throughout the month without even thinking about it.

Keeping track of where you spend your money may seem tedious, but it is so worth it.

Use a phone app or carry around a small notebook to write down each thing you spend your money on.

It might surprise you when you see all your expenses in one place. When you divide charges over multiple cards, it can be easy to lose track of where your money is going.

Review your FICO Score and the details listed in the report. Read over your score factors and history.

Like me, you may find a department store credit card you opened 20 years ago to get a discount and have never used since.

Close outdated accounts if you know you won’t use them.

Even if you’re not planning a big purchase, and aren’t concerned with your credit score, set a goal to improve your score — little by little.

Know your numbers. You have to start somewhere. Your fairy godmother or Oprah will not be knocking on your door and offering to pay all your bills. It’s time for you to take control.

What’s the next step? That’s up to you. These steps are just the beginning. There is more work to do, so start researching and asking questions of trusted friends and family members.

There is no shame in being honest with yourself and others about how much money you owe.

As for me, I came up with a plan to cut my expenses and make some extra money. I bought a used car instead of a new one, and paid off my credit cards.

I continue to chip away at my debt slowly. I revisit and update my numbers every quarter. It’s slow progress, but it IS progress.

You, too, can make progress with dealing with your debt. Taking these small steps will give you the courage and confidence to move forward with reducing and eventually eliminating your debt.

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