How do I Handle Short Term Debt?

Work out a financial plan with your spouse or significant other.

Work out a financial plan with your spouse or significant other.

If you have gotten into trouble with credit cards or lost your job for a few months you may have short-term debt. It’s debt that is manageable, but still lingers among your other expenses. Handling short-term debt is workable with a solid plan and some changes in your spending habits. Once you and your significant other are on the same page in regards to finances, you can pay off the debt in the short term.

Create a budget. Sit with your significant other and review your bills and debt against your income and savings. Figure out your monthly expenses and determine what’s extra to put towards your debt.

Cut expenses wherever you can. Remember this is short-term so if you cut the premium cable channels, you may be able to pick them up later, after the debt is zero. Look at expenses such as entertainment and food, where you probably spend more than you need to. Even the small things, like taking lunch to work every day, can save big where it counts.

Work up a plan to pay off one creditor at a time. Pay off credit cards with the highest balance or highest interest rate first. You'll concentrate on the one card while paying minimums on the others. Find an online snowball calculator and plug in your numbers to determine which works in your favor. This gives you a true sense of the time frame it will take to pay down your cards.

Stop using plastic to pay for things. You don’t want to add to your debt, so pay cash for everything or don’t buy it. Limit trips to the ATM to weekly and don’t stray from your budget.

Earn extra income by working a part-time job, overtime or freelancing. Since this a short-term plan, the long hours you put in now will go a long way toward paying your debt. The sooner you pay the debt, the sooner you can go back to your regular working hours.

Look at your plan after two or three months to see if you have been adhering to it. If you are no closer to paying off your debt, you are not handling it well enough. Redo your budget and put a moratorium on spending until you get it under control.


  • You can consolidate debt by transferring balances to a low interest credit card, but the associated fees may not be worth it.
  • Consider a short-term loan for your debt; however, if you don't adhere to a budget and continue to spend without bringing in extra income, this is not a solution.

About the Author

Francine Richards is a licensed multi-state insurance agent with years of human resources and insurance industry experience. Her work has appeared on Blue Cross Blue Shield websites and newsletters, the Houston Chronicle and The Nest. Richards holds a Bachelor of Arts in communications from the University of Maryland.

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