Debt Checklist

Your young adult years are a time to live life large, but if you're not careful, they can also prove to be a time when you get overwhelmed with debt. Opportunities for falling deeply into debt abound. You might have student loans from college or graduate school, as well as credit-card debt. If you are considering buying a house, a mortgage adds to your debt burden. You can keep debt under control by making wise choices.

Make a List of Debts

To get out of debt, you need to understand how much debt you have currently. List all of your debt, from the smallest credit-card debt to major debts such as your student loans and mortgage. Also include the interest rates and repayment schedule on your list so you have a clear idea of how long it will take to pay off each loan. When you make a list of your debt, it might be a good idea to review your credit report. It will show you any debts you might have missed. If there are mistakes on the report, now is the time to report and fix them. You are entitled by law to one free copy per year of your credit report from all three credit-reporting agencies; get it at

Pay On Time, All The Time

Start knocking down your debt by paying any past-due amounts. Then focus on paying the amount due by the due date each month. If you can afford to, pay more than the minimum on each loan account monthly. Paying more will save you money over time, as you will pay less in interest. If you can't pay more on every loan, focus on paying more on those debts with the highest interest rates.

Create a Budget and Switch to Cash

Adding more debt to the pile won't help you. While you work on paying off your credit cards and other loans, only pay cash. Create a monthly budget and assign a certain amount to each category. For example, withdraw $250 at the start of each month to pay for groceries. Once the cash is gone, you are finished for the month. You will avoid adding more debt and will also learn to make smart decisions when it comes to spending money.

Seek Help

If your debt is more than you can bear, you might to need to seek professional assistance. A reputable counselor helps you see the big financial picture. She can also assist you in creating a workable budget. Usually, the services offered by credit counselors are personalized to fit your specific situation. There are some unscrupulous counselors out there, though. The FTC warns against hiring anyone who promises to completely eliminate your debt or who asks for a payment before you receive any help.

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