We tend to focus so much of our time and attention on our physical health, and for good reason, but if we are not feeling financially healthy as well, it can impact us both physically and mentally.
Just as you would get a yearly health check-up, why not take a snapshot of your financial picture? Take a moment to think about the money coming in and how it is being spent. Are you carrying too much debt? Are you spending too much on non-essential items? Consider these steps to create a clear picture of how you are managing your earnings and how, if necessary, you can tackle some of that debt.
Step 1: Track your spending.
Itemize your typical monthly expenses to see where it’s going. Be sure to track all expenses, including necessities such as housing and groceries, and non-essential items like those expensive lattes or frequent meals out.
Step 2: Determine what you can put toward debt.
Now that you know where your money is going, you can apply the surplus toward paying off your debt. If your spending outweighs your income, find places to trim expenses starting with those non-essential items.
Step 3: Consider the snowball method to tackle debt.
- List your debts from smallest to largest by amount owed, regardless of interest rates
- Make the minimum payments on all of your debts, except on the smallest one (on which you pay as much as you can)
- Once you pay off the smallest debt, add what you were paying toward it to the minimum payment you were paying on the next lowest debt
- Repeat the above until you have paid off all your debts in full
On average, 72% of the Class of 2017 college graduates owes $37,000 for earning their degrees. In total, as of 2017, students owe an estimated $1.31 trillion. If you or a family member is struggling with student loan debt, visit www.debt.org for helpful information.
