The next step to getting out of debt is to face the truth.  Yes it’s scary, but it’s time.

First, gather up your most recent credit card and loan bills.  You are going to compile a list of how much debt you have.  The statements will give you several key pieces of information that I want you to write down:

Now total the columns.

I know this is a big step, and I want you to congratulate yourself for doing it. Once you know the truth, you can take proactive steps to deal with it.

Now, explore options to pay off your debt as fast as possible. You could…

• Pay a higher amount towards the highest interest rate debt while making minimum payments on the other debts. When that’s paid off, move on to the next highest interest rate until you are done.

or…

• Pay a higher amount towards the smallest balance first, so it’s paid off quickly. That will give you a sense of accomplishment and keep the momentum going until all debts are paid off.

But is there another way? What if you could…

• Find a balance transfer to lower or consolidate your debt?  You’d ideally want to find 0% interest for the life of the balance.  Yes, you will incur a balance transfer fee (typically 3%), but you will be saving the difference in the interest rate you’re currently paying.

• Contact your creditors and ask them to lower your interest rate.  You want to do your research first, and be prepared to ask for a supervisor if needed.  An interest rate reduction of any kind will save you money and keep the overall balance lower while you pay the debt down.

For more information and support, join my free private Facebook group “Say Bon Voyage to Your Debt”. We officially start on July 3. To get individual support and worksheets, sign up here: www.facebook.com/groups/PayOffYourDebt/. To receive a bonus budget tracker, sign up through my newsletter

In Step 3, we will discuss ways to find money and change your spending habits.

We all know that debt (and the costs associated with it) is a national problem. In fact, it may be the biggest problem standing between you and a comfortable financial future.  Putting a stop to accumulating debt, and dealing with it once and for all, is the answer.

Over the summer, I will be offering ideas to help you start on the path to paying off your debt and keeping it gone.

In my opinion, there are typically 6 steps to paying down your debt. Here is step 1.

Step 1 Getting Started

I want you to take time to reflect, and to determine why you have debt.  I believe that once you know what got you into debt, you can make the changes necessary to improve your finances.

Maybe you simply spent too much. Judging by advertising and television, every waitress should be able to afford a home furnished by a mix of Crate & Barrel and Anthropologie. You wouldn’t be the first to want to live the American Dream… before you made it.

But, not all debt comes from overspending. Sometimes it comes from medical bills that accumulate due to illness or uncovered procedures, it could be a death in the family, divorce, a job loss or reduced hours. There are circumstances that can blindside you and throw the best financial plans off track.

The bottom line is that you are spending more today than you earn. You have been living in a “buy now and let my future self pay the debt” universe. But this isn’t a science fiction movie. That future self is you and you’ll be just as unhappy with debt tomorrow as you are today!

I don’t want you to think I am judging you.  We all have reasons (or excuses) for the actions we take.  If you want to get out debt once and for all, you have to make changes to your thought process and habits in order to see lasting changes.

Right now, I want you reflect on why you’re in debt. Go ahead and tell the whole story. Start from the beginning.

1. When did you first get behind on your bills?

2. What did the money go towards?

3. Do you have habits that make it easier to accumulate debt (and difficult to pay it off)? These might be shopping, eating, decorating, entertaining, recreation or work habits.

4. What needs to happen for you to pay off your debt? (We’ll revisit this question later – this is your first, knee-jerk response.)

5. Why do you still have debt today? List all the reasons. This is just for yourself to read, so feel free to be honest.

For more information and support, join my free private Facebook group “Say Bon Voyage to Your Debt”. We officially start on July 3. To get individual support and worksheets, sign up here: www.facebook.com/groups/PayOffYourDebt/. To receive a bonus budget tracker, sign up through my newsletter

In the next issue we’ll begin the hard work, so get ready.