Your third step in the process is to gather up all of your debt records so you can know where you stand with each of them. Get your student loans statement, credit card statements, car loan statement, mortgage statements, medical records or anything else you need to get.
Putting all of this information in one place can be a little scary if you have never done the calculation before. Seeing all of your debt in one place can be overwhelming. Take a look at your reasons from lesson one and take a deep breath.
If you think of this as a journey this is turning on your GPS. Before your GPS will tell you which way to go it has to find your current location. This process is finding your current location so you can make the correct turns go forward.
There is information you need to know from each of your debt records
The total amount of money you owe on the debt.
The cost of borrowing the money. This is usually listed as “interest rate” or “APR” which stands for Annual percentage rate.
Monthly Minimum Payment
How much you have to pay each month to not be delinquent on your debt. Keep in mind making minimum payments only it will take up to 20 years to pay off a credit card. Many statements will tell you exactly how long it will take.
FIll out the chart below expand it as needed. We will use this information later to build a method of paying off your debt.
Well done, now you have all of your information in front of you, or you should. Think about all the records you may need: Mortgage, Student Loans, Credit Cards, Car Loans, Medical Bills anything else you may owe regularly. Got ’em all? Then you are ready to actually start by creating your budget.
Let me know you have made it this far in the comments below…
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