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No one likes the four letter “D” word. It sucks. It’s suffocating.  It can ruin your life if it gets out of control.  It spins a tangled web that creates a mess.

D-E-B-T. Most of us carry some, but some of us have let it go too far. Before you know it, hidden fees and outrageous interest rates pile up and BAM! You realize your loans are out of control and you can’t get a grasp on your finances.  If you’re one of those people, don’t be ashamed.  Accept your situation, but more importantly don’t continue the behaviors that got you there!  So now what do you do to start unloading the debt headache?

1.) MAKE A LIST.  Create a list of outstanding debt with specific dollar amounts and the source of the debt.

2.) DO YOUR RESEARCH. Figure out any fees and the interest rates for each debt item.  Write the fees/interest rates next to the debt items on your list.

3.) PRIORITIZE.  This is where you decide which to tackle first.  One of our “coaching” strategies for debt payoff is tackle the highest interest rates first.  Why? You’re throwing away money by paying the interest.  The only time I’d say I would disagree with this is if you have a small, very manageable debt that can be crossed off the list in the near future.  Example, let’s say you owe $500 for a VISA charging 10% interest and you also owe $10,000 for a VISA charging 22% interest.  Yes, the $10,000 has a higher interest rate but mentally, it’s motivating to get that $500 off your list so you can focus on the $10,000.  Also, call your credit card companies.  Some are willing to renegotiate your rate.

4.) BE DISCIPLINED.  Throw as many extra payments towards your debt as possible.  Don’t settle for the minimum payment or you’ll be paying on that debt forever.  If you get a bonus or commission, don’t view it as a steak dinner.  Throw it towards your debt.  Life may feel rigid for awhile, but you’ll be glad you got rid of this headache.  Also?  If you haven’t heard, interest rates are at an all time low.  Take advantage of it!  Refinance your house or car if it financially makes sense.  Any savings you’d make from the refinance can go towards extra payments of debt.

5.) LIVE BY THE LIST.  Don’t forget to keep your debt list up to date! Put it up in your home in a place that is visible.  It’s motivating to see the debt shrinking!

Written by Allison

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