- Know where you stand: You’re in trouble with debt, and are avoiding dealing with the dollars and cents (sense) of finding a solution. Gather your most recent bills and make a chart or spreadsheet showing how much you owe each creditor, the annual percentage rate (APR) for each account, and the minimum payment for each account.
- Establish a goal: Tackling all of your debt at once can be too big a problem to face; it’s easier to deal with one debt at a time. You can approach your debts the practical way by working on the highest APR debt first, but if you have some smaller debts, it can be more gratifying to eliminate them first. Set a short term goal such as “Pay off XYZ bill for $200 by next month.”
- Make a plan: Write down how much you can immediately pay toward the XYZ bll for $200. Subtract that amount from the balance, and you’ll know how much cash you need to save or make to meet your goal. If you have a spouse or partner, have talk about establishing and meeting each debt reduction goal. Agree not to use credit cards until your debt is paid off.
- Enlist your family’s help: If you have kids of suitable age, ask for their ideas. Tell them that you’re trying to meet a goal. Set up a reward system for their ideas, and encourage them to help with achieving the goal.
- Identify potential savings: Go through your monthly budget and review it carefully for ways to cut spending. Ask your family for their ideas. Eliminating all fun activities is neither practical nor likely to succeed–but substituting less expensive ones might. Write down everyones’ ideas, the potential savings for each, and keep track of what you save. Apply your savings toward paying off the bill you’ve selected as your goal.
- Plan your shopping trips: Make lists, clip coupons, shop discount stores, and set a spending limit. Your goal is to spend less than your limit, and apply any leftover cash toward meeting your debt reduction goal.
- Have a garage sale: Ask everyone in the family to contribute by cleaning out their rooms and closets. Then there’s the garage itself. The more you have to sell, the more buyers you’ll attract. use the proceeds for meeting your goal after rewarding your family for their contributions.
- Reward and re-adjust: If you’ve met your goal, congratulations. If you fall short, readjust your goal for next month. Consider new ideas for raising cash. Don’t get discouraged and don’t give up.
If debt management is too difficult, please get debt help from a credit counseling service or professional financial advisor.
About the Author:
Karen Lawson started writing stories about birds and surfing at an early age. For more than ten years, she enjoyed a productive corporate career in mortgage banking before moving to Reno, Nevada in 1997. Karen earned BA and MA degrees in English (specializing in writing) at the University of Nevada. Significant areas of research and writing include truth and ethics in creative nonfiction, medical humanities, and the symbolism and lore of birds in American literature and culture. Karen has taught English at a community college, is writing a collection of poetry, and enjoys birdwatching and walking her basset hounds.