The Very First Thing You Need to Know (and do!) to Actively Reduce Your Debt

How much do you owe? Most people in debt don’t really have an inkling. They bury their heads in the sand, sometimes not even opening their bills each month, so they never commit to getting out of that hole.

“Knowing is half the battle.”

G.I. Joe said that, so it must be true…

You have to open those bills — even just the most recent one; just to find out how deep you are. Answer the phone when a bill collector calls. If you dodge them long enough, your account goes really bad. You may be written off as a deadbeat and your account will be sold to a collection agency and your credit rating goes straight into the toilet. If this has already happened to you, you still need to get that stuff paid down.

Once it’s paid down, your credit rating will slowly get cleaned up, but the longer you wait to deal with it, the crappier your credit will get.

Step one is scary. The alternative is worse. Speak to your creditors, open your bills; find out to the penny how much you owe. In dollars and cents.

Once you know, you can take control.

So, here’s your Step 1 homework: Get yourself a notebook that you’ll use ONLY for keeping track of your debt. On page one, make a list of every one of your creditors, and the amount you owe them right beside the name.
Use your calculator/phone/paper and pen/abacus to add that column of debts up. This is your real debt.

Try not to faint.

This step will likely take a few days to a week. You need to check every credit card balance, every bill that you’re behind on, every bank account that may have a negative balance…

Still in? Are you ready to fix this mess, once and for all?

Your next step will be to get your stuff together and make a plan.