To succeed (or at least try to succeed) at just about anything, it’s advisable to have a goal. Surprise, surprise: debt is no different.
Uncovering your financial liabilities can be a terrifying proposition. It’s why so many let their unopened credit card statements gather dust (and crumbs) on the kitchen table—they don’t want to see the result of their spending. Glimpsing that growing balance brings the reality and shame of their situation crashing down around them. But soon those feelings of guilt subside, the statement is forgotten, and old spending habits return—just in time for next month’s statement to arrive, and the whole vicious cycle to start right over again.
However, when it comes to knowledge of your financial situation, which is scarier: to know or not to know? That truly is the question.
Looking at your credit card statements, calling your student loan provider(s), the bank financing your car, your house…all of it can be anxiety-inducing. But committing to once and for all facing the total damage done is a necessary step in beginning to repair it. To do such a self-appraisal requires a degree of willingness and desperation, as well as a leveling of pride. But we promise it’s worth it. Knowing your number—The Number—is the only way to set a realistic goal for paying it off. You’ve got to know the end point before you can start tackling the debt head-on.
In addition to the total amount of debt owed, you’ll also want to know the interest rate, minimum payment, and payment due date for each debt. A spreadsheet can be useful in organizing this information.
The Number can be overwhelming. It may even dwarf your assets. Heck, it may be so large that you don’t end up repaying it completely. But try not to get too far ahead of yourself; the exercise here is to know your number, face it, and start making a game plan.
In terms of formulating your “getting out of debt” plan—well, there are many out there to consider. We’ve mentioned some here on The Dime. Find one that aligns to your particular situation, try it out, and if it doesn’t work, move on to the next. Many, many people have paid off staggering amounts of debt using a variety of strategies.
It may be a few months, or even a few days, but eventually, the shame will melt away. It’s because you have a plan, and each time you stick to that plan, you’ll become more and more confident in your ability to pay off your debt. When we prioritize our wellbeing and the attitudes and behaviors we need to achieve our financial goals, we discover a little more about who we are, and what truly brings us joy and contentment (spoiler alert: we’re betting it’s nothing money-related). That other stuff we used to spend money and time on…well, when it’s out of the picture, we realize quickly that we can survive perfectly fine without it.
But you have to start somewhere, and that somewhere is with your number, The Number that, over time, will become less about your shame and guilt, and more about your patience, your ambition, and your awareness of who you are and what you’re capable of accomplishing.