Manage your debt

Step 1

Track your spending

Stop wondering where your money goes every month. Itemize your typical monthly expenses to see where it's actually going. Be sure to track all your expenses, including necessities such as housing, groceries and utilities, as well as nonessential items like your daily latte or a new TV.

Don’t forget to estimate for unexpected expenses like auto and home repairs, last-minute weekend excursions and medical bills.

Step 2

Determine what you can put toward debt

Now that you know where your money is going, you can apply the surplus toward paying off your debt. If your spending outweighs your income, find places to trim your expenses — starting with those nonessential items.

Step 3

Consider the snowball method to tackle debt

Applying the snowball method is one way to knock out your debts one by one.
The snowball method works like this:

• List your debts from smallest to largest by amount owed regardless of interest rates.
• Make the minimum payments on all your debts, except on the smallest one (on which you pay as much as you can).
• Once you pay off the smallest debt, add what you were paying toward it to the minimum payment you were paying on the next lowest debt.
• Repeat until you have paid off all your debts in full.