Understand your debt

Begin by making a list of your debts. Make three columns: balance, minimum monthly payment and interest rate. The sum of the balances is the size of your debt. The sum of the minimum monthly payments is the minimum amount of your income that must be spent each month servicing your debt. These are your baseline numbers, and over time you should begin to see a reduction in both of these.

Next step

Now that you understand your debt, it’s time to make a debt reduction plan to pay it off.

Make a debt reduction plan