Your debt may seem insurmountable, but you need to realize that there is light at the end of the tunnel. Every debt problem has a solution. Read on for the 7 steps to start tackling your debt problem.
1. Acknowledge the problem. If you’re on this page, you are already there. Often times the hardest part of a journey is the first step. Congratulations, you’re already done with step one.
2. Inform yourself. Figure out how much you owe to everyone. Get your credit report to see your outstanding debts.
3. Make a list. Write down all of your creditors, the amount you owe and the interest rate of each one.
4. Get a plan. Decide who you’re going to pay off first. You might want to pay off some small debts first to lower the amount of creditors you have. But the way to really make progress on your debt payoff plan is to pay the credit card with the highest interest rate first.
5. Create an emergency fund. Paying off your debt is important but you’ll just fall back into debt unless you have an emergency savings account.
6. Ask for help. Call up your creditors and ask them for help. If it’s a credit card, ask them to lower the interest rate. If you have an installment loan you can ask them to change your due date to later in the month or to postpone payments for a short amount of time. You really have nothing to lose by asking.
7. Consolidate your loans. If you can get a much lower interest rate somewhere else, consider consolidating your debt with a new lender. You’ll have lower monthly payments and just one creditor to pay off.