budgeting help

Living in debt is no way to live. But when it comes to paying it back, it can be overwhelming just thinking about it. That’s why the best way to tackle your debt is to take it one step at a time.

Take a deep breath and follow these steps to begin your path toward greater financial health:

1. Create a monthly budget.

Budgets exist for a reason. They help you manage your finances, and ultimately, any debt you’ve accrued. When you start creating your budget, you’ll want to look at your monthly income and expenses, including mortgage, rent, auto payments, insurance, utilities, phone, internet, cable, groceries, childcare, and transportation. Next, you’ll want to document dollars put toward dining out, travel, memberships, and any other miscellaneous expenses that might come up. Do you have an emergency fund or savings? Make sure to also include this in the budget you draw up. This can all be done in a spreadsheet, but if you’re looking to simplify the process, there are websites and budgeting apps that can also help you get started.

2. Set up your debt budget.

Now that you have a monthly budget drawn up, including the additional money you have leftover to pay toward debt, you’ll want to draft a plan. There are several methods you can use to attack your debt. There’s the debt avalanche, which works by paying toward the loan with the highest interest rate first, and then there’s the debt snowball. While the avalanche can save you money over time, you’ll get the most immediate results with the snowball method.

While still paying the minimum on all your debts, any extra money you have leftover should be applied to the smallest debt. Once that’s paid off, you can now apply the dollars you were paying on that one, to the next smallest debt. Paying off that initial debt more quickly with the snowball method is a great reward and incentive to keep going.

3. Continue to cut expenses.

Whether it’s reducing how much you normally spend on entertainment or choosing to eat in, you can speed up the repayment process by cutting expenses and putting that money toward your debt budget.

4. Still struggling? Try debt management.

Even if you’ve done everything right, you might still struggle. And that’s okay. But it also might mean you need additional help. Now might be the time to talk to a credit counselor about enrolling in a debt management program. How does it work? If you qualify, your credit counselor will work with your lenders to consolidate your loans into one affordable monthly payment while also reducing your interest rate. Debt management plans are designed so that you can pay your debt off in three to five years. How’s that for incentive?

No matter how much debt you’re in, you can climb your way out of it. Remember, each step you take brings you closer to living a debt-free existence.   


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