Do you need to get out of debt or is it ruining your life? It’s an awful feeling when you feel that you have a mountain of debt with no short term fix.

When I was in my late 20’s I got divorced.  I got the kid, the house I couldn’t sell because the market was in the toilet (and the mortgage that went with it), a wee bit of child support and a couple thousand dollars in credit card debt.  Fast forward a few months and I lost my job.  Thank god for the credit cards. They put food on the table, but I quickly saw the balances on my statements climb to over $7,000. I finally got a new job but the damage was done.

I knew I had to get it under control and come up with a plan to get the credit cards paid off.  I needed every penny I was making to pay my bills. That meant I not only had to reduce my spending so that I didn’t need the credit cards anymore, but I had to figure out how to carve money out to get them paid off.

Being the number nerd that I am, I did some calculations and figured out that if I could commit to paying $200 a month I could have it paid off in four years.   I cried.  Four years felt like forever.  I would be paying $200 a month for things I no longer had or was no longer using.   There were so many other things I could do with $200.   $200 a month meant there was no new car, no vacation, no savings, limited going out, and really tight Christmases (which is something no mom wants to have to explain to her kids).

There was no magic formula.  There were no winning lottery tickets.

I did find, however, that once I got committed and started making it part of my paying my monthly bills, I got into a rhythm and it got easier.  As I saw statements turn into $0 balances, I felt pride in my success and that feeling drove me to try harder.

I’m going to share 10 of the things I did to make this happen, including 2 worksheets that will help you create a plan and watch your progress.

I successfully paid off those bills and it didn’t end up taking four years.  I found ways to find extra money to throw at the bills.  I asked for a raise at work….and got it.   I threw bonus money and tax refunds at it.  Momentum grew. Eventually, when the credit cards were paid off, I found I wanted to continue building that feeling of success I was feeling every month as I watched my progress.  So I took the same monthly payments I had been making and put them into a savings account for a new house.  Which, when I eventually got a new house, became part of my new, higher mortgage so it didn’t feel like such a stretch. Those little baby steps from $200/month four years earlier had turned into about $500 a month that comfortably fit into my lifestyle and I was able to continue focusing into ways to make my life better.

And Christmas?  The first year I cried my way through that too, swimming in a giant pity party.  Then I slowly came to realize that I had two options. I could continue paying for dream Christmases with credit cards that would take me literally years to pay for, or I could reset my expectations of what Christmas was going to be in my house.  I knew I never wanted to cry about paying off credit cards again.  Four years was too long to pay for what I had bought with those credit cards.  I’d like to say it was an easy decision.  It wasn’t.  But it’s one I’m glad I eventually made.  Did my son get every toy and video game he wanted?  No. But I learned along the way that he learned to appreciate what he got, and when I looked around at other people I knew, not many (if any) gave their kids everything they wanted either.  Guess I was more normal than I thought.

Let me tell you 10 things I did that helped me get my credit cards under control.  They work for pretty much any kind of debt.

1. Stop Using the Credit Cards

This is such a basic concept but it is the absolute first step you have to take.  If you don’t stop using the credit cards, you won’t break the debt cycle.  Put them in the kitchen drawer.  Give them to your mom or best friend to hold for you if you need to get them out of the house to be successful.   Cut them up.   I recently watched “til Debt Due Us Part.” and Gail Vaz-Oxlade put them in a bucket of water in the freezer.  (I guess the time it would take to defrost them would be all it would take to rethink those impulse purchases).  Whatever you need to do to stop using them, do it.
Someday, a long way down the road, you may find they have a place in your life, but to get started, you need to get them out of your life so you break the cycle.

You may have other debt in your life such as a mortgage, car loan, school loan or personal loan.  These are usually static, meaning you bought something once and pay it off over time.  You will make paying them down part of your process (though it’s okay if you leave your mortgage and school loans out of your plan to get started.  They are big and long term, so we want to be realistic so you can be successful).

The credit cards are incredibly dangerous because they make it too easy to continue to spend and create new debt. Cancel any and all store credit cards.  You don’t need a credit card for retail stores like Kohl’s, Macy’s, or TJ Maxx.  You just don’t.  They work you hard to buy things you don’t really need or can afford.  They tempt you to buy things on sale, but with a 25% interest rate, you lose any discount you thought you got plus some.   Break that cycle. Don’t forget to unsubscribe them from your email as well.  Emails are another way they tempt you into the store to buy things you put on their credit cards.

For major credit cards, get rid of them as well as you pay them off, except for a final one or two.  There are things in life that you may need credit cards for so having them as a safety net will not be a bad thing.  The only exception to this advice is if you plan on getting a new mortgage in the near future.  In that case talk to a mortgage specialist before you cancel any cards.  When you cancel the cards, the cards, and your payment history on them, disappear from the credit agencies.   You lose the record of having used them and paid them off. This can lower your credit rating (weird but true).

2. Make a list of who you owe, how much you owe and the interest rates you are paying

This is your coming to Jesus moment.  You need to write down everything you owe, the balances and the interest rates.
To make this easier for you, I’ve created a worksheet you can download.  You can enter all the debt you want to pay off, the balances and the interest rates.  The worksheet will also help you with Step 3.  CLICK HERE TO DOWNLOAD THE WORKSHEET

When you are done with your list, step back and look at it.  Are you surprised? What scares you the most?  The total you owe?  Did you know what it was?  The number of people you owe?  The interest rates you are paying? This is not one of those moments to beat yourself up.  This is a huge step in taking ownership of your debt.  Own it.  Breath.  Put it down for a day or two if you need to, but this is where you face the true depth of the challenge before you.

3. Figure out how fast you can pay it off and what that means you have to commit to in monthly payments

I hear people all the time talk about the hopelessness they feel when they think about their debt because they feel like it’s never going to end.  This step is going to change that. This was the step where I committed to $200 a month for four years to get my debt paid off.  I want you to commit to a monthly amount and a time frame.
If you are like most of us, you get statements every month and you pay the minimum they ask plus more if you can.  This makes your debt management a reactive process.  Somebody else is telling you what to pay each month and it feels (and may actually be) an endless process.

In this step, I want you to put all your debt together and come up with a plan on how you can pay if off at a monthly amount you control and a fixed timeline that allows you to see the end of your debt. You can use the worksheet I created to lay all this out.  You enter all the debt you want to pay off, the balances and the interest rates and the worksheet will tell you how much your monthly payments need to be to pay it off in 1, 2, 3, 4 and 5 years.   You decide your timeline.  You decide the monthly amount you want to commit to.  CLICK HERE TO DOWNLOAD THE “DEBT PAYOFF PLANNER” WORKSHEET

I give you permission to cry here if you need to.  Lord knows I did.  It’s okay.  Seeing it laid out, what you owe, how much its going to cost and how long it’s going to take is cry worthy.   The point is, you have created a path to be debt free.

4. Attacking the list – smallest balance or highest interest first?

Each month you will make the minimum payments on everything.  The money that is left over in your monthly commitment will go to ONE debt. This allows you to start knocking items off that list of debts.  Which one do you choose?.
If you’ve been researching ways to attack your debt, you’ve probably heard there are two schools of thought on how you should do this.

The first is to pay off the smallest balance first (no matter what the interest rate is)  so you can feel good about making progress, which in turn will make you more likely to want to continue.

The second is that if you focus on the one with the highest interest first, and work your way through the balances based on interest rates (highest to lowest) which will have you paying less interest overall and paying everything off faster.

Which do I recommend? One or the other.  I like both for different reasons.  Just pick one.  Switch between them.  Do what ever works for you.  I’m here to tell you there is NOT a mandatory formula.  This is YOUR life and the important thing is getting a plan in place to attack your debt and move you in the right direction.

I WOULD encourage you to pick one method and generally stick with it.  But if you are struggling with sticking with the plan you picked and need to do something to keep working your plan, you can be flexible.   Step 5 is going to keep you on track with your overall plan.

What does being flexible look like? Having a shitty month and feel like you need to see some progress?  Put your extra money on the one with the smallest balance and maybe get it paid off.   Have one that is getting to the end and you see if you put everything extra to it next month will get it paid off?  Go for it.  Sick to death of that 29% interest rate?  Jump on it for a few months and make it go away.  It may not be 100% of whatever you planned, but imagine the confidence you will feel as you get statements with $0 balances.  The confidence will grow and you will feel stronger and more in charge.

The most important thing is to make sure you stick to the overall amount you set for your monthly commitment.

5. Keep track each month so you can see your progress
You created a plan.  There is a timeline and a monthly commitment.  You need to check in on your plan on a regular basis….monthly. This is similar to step 2 but so much more.   You are committing to a multi-year plan for yourself.
In order to be successful, you need to see yourself making progress.  You see that progress by consistently seeing where you started, where you are, and how much you have accomplished. Each month, I want you to update your list of debt and where you stand.  Pay something off?  Leave it on the list and put in a big fat $0. Every month you will see progress.

Progress means your confidence will grow. Yes…I’m going to make this easy for you too.  I’ve created another worksheet you can download and use to track your progress. CLICK HERE TO DOWNLOAD THE “48 MONTH DEBT TRACKING” WORKSHEET

6. Make two payments each month instead of one

This recommendation comes from one of my students.  (Shockingly, I don’t think of everything, but I love a good idea).   If you make two payments each month instead of one, you make the same monthly payment, but you cut down the interest you owe so more of your payments go to the balance.
If you pay once a month, you pay interest for a full month.  If you pay twice a month, you reduce the balance you owe during the month so less interest will be charged.  It may not seem like a lot of money, but over months and years, it can become pretty significant.

7. Lower your interest rates

Today, I frequently see people with interest rates in the high twenties.  That means that a lot of what you are paying each month is going to fees to your bank or credit card company and not to paying off the balance.  In this step, you will go through all your loans and credit cards and see if you can get lower interest rates.
There are two ways you can do this.  First, call the company and ask them to lower your rate.  I know…What?  No company is going to just lower your rates, right?  Wrong.  Many will.  All you have to do is ask.  The nice thing is you are talking to a customer service rep.  Its their job to be nice and helpful, so don’t think of this as an intimidating process.  They will help you if they can.   Ask them to lower the rate or ask them if they have another card (or loan) with a lower rate that you can move over to.

The second thing you can do is move your balances to 0% or lower interest cards.  Maybe it’s a card you already have.  Maybe it’s a new card.  (yes…getting a new card with a 0% rate may make sense).    Lowering your interest rates will save you huge amounts of money.  Not only will it save you huge amounts of money, but it will get your through your debt plan faster so you can focus on new ways to spend that monthly amount you committed. Make sure you watch for any fees a company may make you pay to do the transfer.  If the fee is more than the interest you would have paid, it’s not a good deal.

8. Consolidation Loans – tricky but potentially a good idea

You can go to your local bank or credit union and ask them for a consolidation loan.  This is basically a personal loan for a fixed period of time at a fixed monthly amount.    You get a loan that is the total of all your other loans and credit card balances, and take that money to pay all of them off.   Then you have the one monthly payment going forward.
There are a couple of benefits to consolidation loans.  You get rid of multiple loans so you only have to handle one monthly payment.  You also get a lower interest rate which means you can pay off the debt faster.  (If you aren’t getting a better interest rate, this is not the loan for you).

And then, there are the pitfalls to avoid.   Don’t get a loan that is bigger than all those balances that need to be paid off.    Your current loans and credit cards total $13,500.  It would be really easy to just get a loan for $15,000.  Resist the temptation.  You don’t need any more debt.

Don’t include any balances with a lower interest rate than you will get with the consolidation loan.  It’s tempting to just roll everything into one loan because it’s convenient.  However, you want to make the interest rates work for you.

Don’t include anything that has a lower interest rate than what the new rate will be.  This means you may consolidate some of your debt but not all of it.

Don’t refinance your house to consolidate other loans and credit card balances.  This is NOT a consolidation loan.   You think it sucks to have to pay those credit cards off over the next five years?  When you roll it into your mortgage, you are paying them (and the associated interest) over 30 years.  It may seem like a great idea, but you will end up paying WAY more than you would if you just kept paying them off.

The best advice I can give on this step is that you only do it if it reduces your interest rate and only after you have successfully not used your credit cards for at least two months.   If you haven’t figured out how to stop using those credit cards, you are going to create new balances and be paying off the consolidation loan AND new credit card balances.  That, was not the intent of the consolidation loan.

9. Find ways to pay down faster 

You’ve set up your plan with both a time frame and a monthly commitment.     If you stay the course, make every payment, and complete your debt payoff on time, you have succeeded.   There is nothing else required or expected. However, you may catch the same bug I did.  Once I started to see progress on my plan, I wanted to be done faster.
Every month I paid out that $200 I was reminded that it was $200 for crap that I didn’t even own anymore and I wanted to do other things with my $200 each month. So I found other ways to pay off my debt faster. You may want to get a part time job or side hustle.  Maybe you go through your house and sell all that crap and turn it back into money.  I loved to use gifts, bonuses, tax refunds and raises.  It was all free money that I had learned to live without.   As I think I mentioned earlier, I asked for a raise.  I got it, and every extra penny went to paying off my debt.

I want to reiterate….this is NOT a mandatory step.  If you are tracking to plan, you are succeeding.  This is merely an option.  If you choose this option, just make sure that whatever money you discover makes it to that debt.  It’s easy to let it get swept up into other things.  Have a plan and make it work for you.

10. Balance your debt management with the rest of your personal financial plan

The final step is to balance your monthly debt commitment with the other four pieces of your personal financial plan.   It’s really easy to focus just on your debt, but you have to do more.  Time is your friend, or your enemy when it comes to personal finance.   Keeping balance is key.
Your personal financial plan should include:

  1. Budgeting
  2. Debt Management
  3. Savings
  4. Investing
  5. Retirement Planning

Debt is a big buzz word these days.  We are more aware of it and the damage it can do than maybe any other time in history.   But you have to remember is has a place in a bigger overall plan.

FAST Money Management System

 Find peace with your money    

 Achieve balance between budgeting and debt  payments  

 Save and invest with purpose  

 Tomorrow’s retirement will be secure

People get caught up in paying off debt and lose years of savings.  Savings needs to be invested for a long time to turn into the kind of money you need in retirement.  Too many people wait until their debt gets paid off before they start their plan for saving.


What also happens is that as the debt gets closer to being paid off, we naturally get more comfortable.  So we are more comfortable, have little debt, have no savings plan in place, and who wants to start something new?  Guess what happens with that savings plan?  Nothing.  It’s a viscous cycle. You have to have a savings plan as well as a debt payoff plan.


Which of course leads to the question, How much do you need to save?  You need to do some retirement planning to know what that number is.


I also see people stop living their lives while they pay off debt.  They can lose years of living.  Time is one thing you can never get back.    It may take a long time to pay off your debt, but you need to balance it in your life with day to day budgeting, saving and retirement planning.


Women especially need to learn how to manage their money. 95% of women will have to become responsible for our money at some point after we turn 65 (because of death, divorce or illness).  We can’t wait to learn how this works.  Learning to manage your debt is a perfect first step  (heck, it’s where I started).  I hope it is a successful first step for you as well!


The good news is that you don’t have to figure all this out yourself.  I’ve spent the last 25 years learning how to manage my money.  I’ve gone from crying over those credit cards to being debt free, my son graduated from college debt free, and I’ll be able to retire before I’m 65.   I have it down to six steps.  Actually, six pretty simple steps, once you have learned them. In my class “6 Steps to Mastering Your Money and Creating a Path to Financial Freedom”  I teach you the 6 steps and when you are done, you will have a one page financial plan that tells you where you are, where you want to go, and what you have to do to get there.  CLICK HERE if you’d like to learn more.


After several friends asked me to teach them how to manage their money, and I saw the difference my class made in their lives, I committed to teaching 1000 women how to manage their money.  I have the advantage of having an accounting and finance background, which helped me when I decided I needed to learn how personal finance worked.   I’ve taken 20 years of learning and working through mistakes and created this class so that other women can get to the finish line faster.


If you need to down load the 2 worksheets, you can find them here


Debt Payoff Planner – CLICK HERE

48 Month Debt Tracker – CLICK HERE


If you would like to learn more about my class, you can find it here


“6 Steps to Mastering Your Money and Creating a Path to Financial Freedom”  CLICK HERE


If you’d like to find me on social media, you can find me here


Instagram – CLICK HERE


Facebook page – CLICK HERE


Private Facebook group – CLICK HERE