I was talking with a friend recently about being massively in debt. We are both in debt to the tune of $100k plus, which is a mind-boggling and super intimidating number.
My friend was feeling frustrated because she has been trying to chip away at her debt for a while and just doesn't feel like she is making progress. The truth is, just making the minimum payments - or even a little extra - on your credit cards is not going to get you anywhere. It's just not.
Of course, that's not the kind of thing you want to hear, right? I know, that wasn't what I wanted to hear when I started on my journey to debt freedom and that's not what my friend wanted to hear either.
Let's be honest: drastic times call for drastic measures.
If you want to get out of debt, you need to start making real changes. Now.
1) Cut them up
You must stop using your credit cards, I know it's hard - and scary - but you're never going to get out of debt unless you stop accumulating debt.
The best way to do this? Cut them up. All of them. If that makes you begin to hyperventilate, break out in hives and reach for the vodka, then put one on ice. No, not a cocktail, a card. Take the one with the lowest APR (Annual Percentage Rate) and put it in a ziplock. Fill the ziplock with water and stick it in the freezer. That way you have it, but can't access it that easily. (If your doubtful, think about how hard it is to get up from the couch to get your card when you are shopping online!)
2) Cut it out
Awesome, you've cut up the cards so you can't use them anymore. But there's more...you have to eliminate the credit card option everywhere. Look, I know the tricks. I know I can cut up my Target card, but if I shop online it pre-fills my card info in my shopping cart. If I go to Macy's all I need is my ID and social security number and I can "charge it!" Same thing with other online retailers...if I've used a card, mostly likely it's saved. SO yeah, sorry, I know the tricks and you've got to cut it out.
It's easy to Google the steps you need to remove your credit card information from your browser. For example, to remove mine from Safari I go to Safari > Preferences > Autofill and from there I can remove any stored credit card information. You will also need to check with each online store you use and remove your credit card info.
If you still plan to shop online (within the budget you will be setting in a future step) then leave your debit card info there or use PayPal or Venmo. But no credit cards, you must break the infinite loop!
3) Make a list...of every debt
The next step is to create a list of all your debt: credit cards; student loans; car loans; private loans; mortgage, etc. All of it. I know it may not be pretty, and you may feel worse for the wear after listing it all, but it is necessary to face the beast fully, so you know what you are dealing with.
I use an excel spreadsheet or you can search for a debt spreadsheet online. Shoot, if this is the sticking point for you we can create one in real time in Google Sheets! (just send me an email and we can set up a time to do it!)
It doesn't have to be complicated - start with a list of your debts, your current balance, the interest rate for each one, minimum payments, payment dates, etc. It's important to include everything. I found that I made the list and then, for a day or so after, I kept thinking of other debts to add to it. It wore me out and, I'll be honest, depressed me for a while. But now I am about 4 months into the process and it feels really good to have a solid understanding of my situation and a plan to get out from under the weight of all this debt.
There's more to the process, to be sure, but this is a good starting place - for me, for you, and for my friend who just doesn't know where to begin.
Start here, with these 3 steps. Then take a deep breath and get some fresh air...I'll be back next week with what's next!
You got this!