To Get Where You’re Going, first you need to know where you are


How much money do you have in your wallet right now?

…in your savings and checking accounts?

How much credit card debt are you carrying?

Do you keep track of your debt each month?

Do you have a plan to become debt-free in the near future?

What’s Your Financial Status?

If you don’t use any bookkeeping software, open up Excel and create a table. Or you can use the attached document to track your bill paying AND paying down your debt. Bill and Debt Tracker

For the Bill Tracker, this can be laid out very simply. Put your credit cards and bills going down the first column and the payment months across the top row.

For the Debt Tracker, I add a little more information. I want to know how much I owe at the beginning of each month. Then I insert the amount due, the due date and what I actually paid on the credit card debt.

Watch Your Debt Disappear

In the second tab, I have the sample Debt tracker for you to look at. By tracking what I owe each month, I can easily see my debt shrinking, which allows me to do the dance of joy.

My two rules of thumb for paying down debt:

  • Always pay more than the minimum payment
  • Always pay the smaller debt off first

If you look at my sample debt tracker, I pay more each month on the $2500 debt versus the $5000 debt. Psychologically, this makes a lot of sense. The quicker I get one debt paid off, the quicker I feel a sense of achievement. If I pick the higher debt first, it could take over two years to get any reward (card paid off). By starting with the smaller debt, I can have it paid off in a year.

Plus, I then can put more into the larger card ($300 instead of $100) and get it paid off in seventeen months instead of twenty-five.

The point is, by knowing how much debt I carry and taking action to pay them off, I empower myself to make plans for my future. I’m no longer passively hoping things will get better, I’m MAKING them get better!