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Drowning in Debt? You Can Dig Your Way Out!

Understanding that your mountains of debt didn’t happen overnight and that there’s no instant fix are the first steps to digging your way out of debt if you are drowning in it.  Repairing credit and plowing out require work, discipline, and patience.

Local nonprofit organizations and credit counselors are available if you need outside help learning how to begin and how to pay. Working with credit counselors can reflect positively on your credit report if they succeed in having your payment schedules modified. For many people, taking an honest look at their situation and creating a plan is the place to start.

Let’s get to work by looking at a few initial steps to start your debt reduction. These are important, but certainly not inclusive.

8 Ways To Improve Your Financial History and Future:

Learn your Credit Score

This step will help you see where you are and whether your spending habits have impacted your credit score. If you are current on your bills, great, but if you meet, exceed, or are using too much of the the credit limit on your cards, your score will reflect that too!


What’s your total debt?

Often people recognize financial problems, but don’t know the true extent of debt. Pull together the information for every single credit card, every loan paper, every bill any money you owe.


Create a Chart

Make a chart that lists every debt you owe. This will give you an accurate picture of the bills. In the chart, create 7 columns with these headings: ITEM, LENDER, $ OWED, Minimum Monthly $, Interest Rate, DUE DATE, MONTHS BEHIND. you can also use the list to track any new purchases you add to your cards.


track Spending

Americans spend money senselessly. How do you spend your money? Coffees, bottled water, convenience store snacks? Write down your spending daily. You may find areas where you can cut down. You will certainly think twice about whether you need that $5 Starbucks drink when a $1.85 regular coffee would do.


Stop Spending

It’s time to stop the mindless spending. Review how or what you can do without. Make conscious purchases by creating a list and adding what you want to buy to the list. Carry only a small amount of cash it alleviates the temptation to spend what you don’t have. If you know the car needs gas, take extra cash for the gas. Spend it only for gas.

Start to develop habit forming steps realize, at the end of the day when you write down every penny spent, how this purchase might affect your state of mind. Good habits are contagious. As an aside, if you regularly use your debit card to buy gas or pay for other purchases, great – but this is not a license to spend. Remind yourself how much you can spend each day and stick with it.


Monthly Spending Plan

Develop a monthly plan, a new one each month. Of course you need a longer-term plan, but things change. December has holiday expenses; in January, you know you will have to pay annual life insurance premiums; in April, you will have to prepay the kids summer camp, etc. The beauty of the plan is seeing the incremental improvements, and where you can cut those are habit forming steps. This plan should also include prioritizing debt repayment.


Income Increase

If you’ve not received a raise in a while, ask for one. Even in this economy, you might be successful if you have taken on more duties as the work force has been cut. Or ask for extra work that is reimbursed. Moonlight! Many companies have announced increased online hiring this holiday season, plus there are many online job opportunities these days. Have a garage sale for things that haven’t been used in a year or more. Sell something of high value that you could part with. Brainstorm with your family for more ideas.



No doubt this is the furthest thing from your mind. As you pay down debt and feel a little weight lifted, put a small amount in savings weekly. Continue to whittle away the bills, but watch that small savings grow. Needless to say, if the steps you have put in place are not working, you may need to seek outside help. There is no shame in this. Certainly, if you have lost your job or your situation has changed, it is important to do whatever you need to do to stabilize your situation.


  1. Didi on February 7, 2011 at 8:45 am

    Thank for the articale it was interesting.

  2. Wendy W on February 1, 2011 at 7:57 pm

    They really need to teach momey management in schools. Some say its up to the parents to teach it, but if no one taught them & they are struggling, what good is that?

    I think a key point people don’t realize is that if your shelter costs (rent/mortgage) is more than 1/3 your take home pay, you are in trouble. I thought they were crazy telling us that, ours was 42%! Now my payment is almost half what it was and its much easier!

  3. Betty N on February 1, 2011 at 6:39 am

    Keep bringing this type of info….My husband and I never had a written budget because we never needed one. We never spent money we didn’t have, we paid off credit cards fully each month, we keep our cars 10-11 years and during that time we save so that we can pay cash for the next car, etc But I am seeing good young people go down the credit card path until they can no longer even pay the minimums. I wish they could plan with someone before it happens

  4. Eve on January 29, 2011 at 7:50 pm

    Im not in debt but Tis is a great plan I will keep just in case

  5. Melanie on January 29, 2011 at 7:58 am

    This is a great post. Sometimes we just need to know where to take the first step. We paid off our credit card debt about 3 years ago. It was tough and took time, but worth it. I’m trying to figure out a monthly and a long term plan right now, so this was very timely.
    Thank you!

  6. Kristie on January 29, 2011 at 7:06 am

    I highly recommend reading Dave Ramsey’s “Total Money Makeover”. The information in this book has changed our life for the better. We were over $17,000 in debt and were able to pay it off in 6 months. We have an emergency fund in place which has been a life saver. Because of it, we have been able to pay cash for a new washing machine when our old one died and recently we paid cash for our new heating/air unit when the old one died. I am not saying all of this to brag, but to tell you how life changing his program is if you are willing to sacrifice and stick to it. We do not have credit cards and we pay cash for everything. If we don’t have the cash for it, we don’t buy it. We are now looking forward to paying off our house in a few years which will be the last real debt we have. Anyone can do this, you just have to be willing to work hard for it. It has not been an easy road, but I wouldn’t change a thing. I encourage all of your readers to give his program a try.

  7. Amanda @MommyMandy on January 28, 2011 at 8:29 pm

    Thankfully were only about 13,000 in dept and that is a credit card and car payment