For many people, focusing on their financial health allows them to not create new debt, but also not make a real dent in the debt they already have.
Understand your debt
First, we must figure out how much debt we truly owe. I made a list of all the debts I have, which for me includes loans for college and credit card debt.
Then I added details to the list, like the interest rate and minimum monthly payment due.
Create a list of all the debt you owe, from financial aid to credit cards to loans from friends and family, with the templates below.
Seeing all the debts in one place is important for creating a new strategy for paying off the debt.
I mean you can just hope a rich relative dies and leaves you all their money. But while we’re waiting …
If I only pay the minimum payment, I’ll never be out of debt. So I need to make a plan for how to move forward. It’s called a repayment plan.
If you are going to make debt reduction your first goal, use whatever money you collect from spending less or making extra money (say by selling things) to pay down your debt. Don’t spend it and don’t save it.
Saving is important, but if you are focusing on debt reduction, then use the money for debt reduction. Not paying off debt in the future will help you have money to save then.
We cover popular debt reduction strategies in the second part of this section, but before you do that —
Call and ask your creditors for a lower interest rate. It might not work, but it’s worth a try. Just be wary of debt settlors that offer to negotiate your debt payments for a fee.
Money Funnies Debt Tracking Templates
Instructions included in template.
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