“The hardest part of any journey is the first step.” ~ Anonymous
For most of us, getting debt-free seems years or decades away. But really? The first step is the hardest and once you have the inertia, it gets easier. You just need the roadmap and a nudge. By the end of the week, you can be on the road to paying off your debt.
Here are three steps to help you tackle debt before Labor Day:
Step 1: Make a List of Your Debts
- You can use your credit card bills if that’s your primary debt. On a separate page, write down the balance on each card and the interest rate if you can find it. (They usually like to tuck it into a box on the second or third page).
- If it’s mostly collections, pull a credit report via AnnualCreditReport.com.
- Or let us come alongside and help. Our online financial health expert, IRIS, will help you get a quick overview of your debts, or you can dig in to the details of all 3 reports with our Credit Health Education review.
Step 2: Prioritize
- What can you tackle first? Is it a small medical bill that keeps sending you a monthly reminder? A credit card close to get paid off?
- Next, rank the debts in order to pay off. A lot of folks like the snowball payment method–where you pay off the smallest balance first (and minimum payments to the rest). Then, roll what you were paying the smallest to the next one once it’s paid off.
- If you’re making the minimum payments fairly well, can you boost the payment on the first one by even just $25 or $50 (or more)?
- If you’re struggling with even just the minimums and have more money going out than coming in (income), consider a different plan, like our Debt Management Program. It could be a cheaper and faster alternative without taking out new loans. Getting a review and quote is always free.
Step 3: Walk the Path
- You’ve got a plan to tackle debt and a list. Now it’s about sticking with it and following the progress! Aim to not use the credit cards so that the balances are always going down rather than up.
- Brainstorm whether you can boost that walk to a run. Do you have any clothes you can consign? Old appliances or equipment to sell? Were you planning on hosting a Labor Day BBQ? Consider a potluck instead and apply the savings towards your debt(s).
- Get excited to see the progress toward your goal. Will you have a bonus check in the fall or at Christmas you can put toward them?
- Lastly, put your list where you can see it as a reminder. Or if you plan to use your phone, check out apps like Mint or PocketSmith to keep all your credit card accounts and balances in one place so you can watch the balances go down.