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Between mortgages, credit cards, student loans, automobile loans, and other types of debt, America is approximately $23.87 trillion in debt. That is more money than one person sees in a lifetime. This amount of money creeps up the back of one’s neck and results in crippling fear. How do we even start to pay this off? Is there even a way to overcome this towering debt? There is, actually. It all starts with the individual. Each person needs to assess his/her current financial standing, create a budget, craft a plan, parley creditors and lenders, and see his/her plan through.

1) Assess Your Current Financial Standing

It’s time. It’s time to face your credit score. Sooner or later, it has to happen. You can check your credit score for free biweekly on Credit.com. It can be scary looking at your credit score, but who knows, it may not be as bad as you think. If it is as bad as you think, it is good that you saw it now and didn’t let it get any worse. Knowing your credit score will help you to craft your plan for overcoming debt, as you will know how frequently you need to pay off some of your debt in order to raise your credit score higher. In a spreadsheet on your computer, type out your remaining “balance, interest rate, and monthly amount due for each of your debts.” Make sure to include all debts except for your “mortgage loan or student loans,” as they usually have low Annual Percentage Rates and are long-term. The other debts should be at the forefront of your planning.

2) Create a Budget

You will want to take your average net income each month and less your expenses, including your fixed and variable costs. Fixed costs are costs that remain the same month to month, such as your mortgage, student loan payments, and insurance payments. Variable expenses are costs that change from month to month, such as your phone bill, utilities, and gas bill. You can choose to save some money each month, if you would like and are able, but with the rest of your money, you should pay down your debts.

3) Craft a Plan

You’ll want to take your net income less your monthly savings, expenses, and minimum debt payments and put that amount towards your debt with the largest interest rate and and balance. Write down your financial goal for each month that you would like to hit in terms of total debt payments. Keep track of how much you are shooting for and how much you actually put towards your debt. This will help you to keep organized and move forward knowledgeably.

If you are finding you do not have enough to put towards your minimum debt payments each month, come back later this month to see how to accumulate money by cutting costs and to see steps four and five!