How to Track Debt

Don't let your debts overwhelm you.

Don't let your debts overwhelm you.

Tracking your debt, the first step to paying it off, takes focus, commitment and courage. When you add up all of your outstanding debt for the first time, it can feel overwhelming. However, a good tracking system will let you see your whole debt picture clearly, help you execute a pay-down strategy and encourage you to stay the course until you are debt-free.

List the name of the creditor for each of your bills. Also list the outstanding principal or total payoff amount, minimum payment amount, interest rate and number of monthly payments remaining. Enter a payoff date for each loan, assuming you make only minimum payments, and identify your debt-free date. For your credit card debts, call your card company for an estimate or use debt-tracking software to determine an approximate debt-free date.

Add up your total minimum monthly payments. For example, if you owe a minimum payment of $435 for your car, $236 for your student loan and $48 for your credit card, your total minimum monthly payments add up to $719. This is the minimum you will allocate each month to paying off your debts, but you should consider allocating an additional fixed amount each month to pay your debts down more quickly. The faster you pay off the principal, the less you will pay in interest -- unless the lender charges a penalty for early payoff -- and the sooner you will be debt-free.

Add up your total outstanding principal. For example, if you owe $13,000 on your car, $22,000 for your student loan and $8,000 on your credit card, your total will be $43,000.

Update your remaining outstanding principal each month based on the information in your monthly bills.

Update your debt-free date each month when you pay more than the minimum. Some tracking systems will allow you to play with "what-if" scenarios, where you can increase or decrease your monthly payments to see how this affects your debt-free date.


  • You can choose from any number of tracking systems, from a simple handwritten list to a sophisticated spreadsheet. If you want to play with different variables to help determine your debt-free date, you will want to use software that can perform calculations for you. Look for free spreadsheets you can download using the search term, "debt tracker."
  • Personal finance guru, Dave Ramsey, recommends paying off your debts in order from smallest to largest because paying off that first small debt can give you a quick win and provide the extra motivation to continue.
  • Ramsey also recommends a "snowball" approach. When you pay off a debt, add that bill's former monthly payment to the next debt, and so forth, until the last debt is paid. Consider making a commitment that you will take on no new debt during this time.


  • Total debt of more than 36 percent of your gross take-home pay can be a warning sign of financial trouble. Consider working with a consumer credit counseling professional if you have trouble meeting your minimum monthly debt payments.

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About the Author

Julia Thomson began writing professionally in 1996. Her work has appeared in "Stage Directions," "Phoenix New Times" and "The Valley Callboard." Thomson has expertise in investing and personal finance, with three brokers' licenses and certification as a budget counselor. She holds a Master of Music from Indiana University.

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