Assessing Your Debt

How to Assess Your Debt and Take the Next Step

Debt is a normal part of many people’s financial lives. But when payments start making it harder to cover everyday expenses, save for emergencies, or feel confident about your finances, it may be time to take a closer look.

Assessing your debt doesn’t have to be overwhelming. Understanding what you owe and creating a plan can help you feel more in control of your money.

How do you know if debt is becoming difficult to manage?

Everyone’s situation is different, but there are a few signs that may mean it’s time to review your finances:

• You frequently pay bills late.
• You regularly make only the minimum payment on credit cards.
• You rely on credit for groceries, gas, or other necessities.
• You use one credit card or loan to make payments on another.
• Holiday or other short-term purchases take months to pay off.
• Creditors are contacting you about missed payments.
• You rely on payday loans or other high-cost borrowing to make ends meet.

If some of these sound familiar, don’t ignore them. Taking a closer look now can help you make changes before debt becomes harder to manage.

Where should you start?

Start by getting a clear picture of what you owe.

Make a list of each debt, including the balance, interest rate, minimum monthly payment, and due date. Then compare your monthly debt payments with your income and regular expenses.

Once you can see everything in one place, it becomes easier to decide where to focus.

Which debt should you pay off first?

There are a couple of common approaches.

You can focus on the debt with the highest interest rate first, which may help reduce the amount of interest you pay. Or you can start with your smallest balance, giving you an early win and allowing you to put that payment toward the next debt.

What matters most is finding a realistic plan that works with your budget and that you can stick with.

You don’t have to figure it out alone

If you’re not sure where to begin, Elevate Credit Union is here to help.

Elevate offers free budget counseling for members. We can help you review your income, expenses, and debts, create a spending plan, and talk through strategies for reaching your financial goals.

Budget counseling isn’t just for financial emergencies. It can also help if you want to pay down debt, build savings, organize your finances, or simply feel more confident about where your money is going.

Learn more about free budget counseling and schedule an appointment.

You can also call us at (435) 723-3437.

Start with one step

You don’t have to solve everything today. Start by understanding where you stand, choose one step you can take, and build from there.

A little knowledge and a good plan can go a long way toward helping you feel more confident about your financial future.