Budgeting Part 4

Now that you have everything set up to keep track of expenses effectively, what about all that debt? When my husband and I got married he brought along his student loans. At first, it was extremely overwhelming. Since we don't have a large income, we couldn't qualify for a mortgage unless they were paid off. That's the day I sat down and created a budget and a system to pay off the loans. In 2 years time, we have paid off 2/3 of his loans!

To begin, gather all paperwork for your debts. You'll need to know the company, the interest rate, and how much is owed. This includes car loans, credit cards, student loans, and even a mortgage.

With this information, make a list of all your debt. At the top of the list you should have the debt with the highest interest rate and at the bottom the lowest. It may be overwhelming, but don't worry! When I first sat down and did this we had 5 or 6 student loan companies that we owed money to, some at 8% and others at 2%. It really opened my eyes to seeing what we owed but I looked at it as a game of how to get rid of it.

We'll be working with this list in the next and final part of this budgeting series when we talk about how to pay it off!