When debt piles up, your lifestyle suffers. Debt can prevent you from achieving your goals, such as making an investment, buying a home or taking a much-needed vacation. Even worse, when you carry too much debt, you may start racking up more, becoming caught in a vicious cycle of using credit for more purchases while your income goes almost completely toward paying your debt. Fortunately, there are steps you can take immediately to work your way toward being debt free.

First, you’ll need to examine every aspect of your financial life. Here’s how to get started:

  1. Track your expenses. Save every receipt. Hold onto every grocery bill and each restaurant check. Keep the tabs from the dry cleaners and the gas station. Everything counts – even the five bucks you spent on that grande latte. At the end of the month, add up your total living expenses and see where you can cut down. Any money you can save by trimming your expenses is earmarked for paying down debt.
  2. Increase your income in any way possible. Now’s the time to ask for that raise you’ve been wanting, freelance whenever possible, work a second job or even seek better employment. All extra income goes toward getting rid of that debt.
  3. Get rid of all credit card debt. Examine every credit card statement and begin paying them off, starting with the one that has the lowest balance. Don’t concern yourself with interest rates unless two debts have similar payoffs. In that case, start paying off the higher interest rate debt first. Your goal is to get rid of these bills completely, one at a time.
  4. Pay off all personal and student loans. You don’t want to owe anyone a dollar, so pay back all money you’ve borrowed as soon as you can. If possible, consider shortening your mortgage or, if you have the means, even paying it off completely.

Depending on the amount of debt you’ve accumulated, this process may take a while. What’s important at this point is that you have a plan to become debt-free. If you need help managing your finances, stop by your nearest FSU Credit Union branch and ask how we can help. We offer tools that could help you manage your debt, such as home and auto loan refinancing and balance transfers for credit cards.

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