HomeDebtThe Very First Step When Eliminating Debt

The Very First Step When Eliminating Debt

This past weekend, I was involved in two separate conversations regarding debt repayment.  Interestingly both conversations concerned married couples that despite varied lengths of marriage had failed the first step when it came to destroying debt.   The very first step in getting rid of debt is actually knowing exactly how much you owe to creditors.

I don’t mean to cut single people out, I bet they fail the first step too!

What do You Owe Creditors?

When you ask most people, they may have an estimate of how much they owe credit card companies, but it is only the very serious that know exactly what they owe.

But if you don’t know where the starting line is how are you going to get to the finish line?

One of the first things I did when I started this personal finance blog was put it all on the line, I provided a balance sheet of my debt, and man was it ugly:

  1. CitiCard #1 – $141.99
  2. Account Central (Discover) – $1,758.30
  3. CitiCard #2 – $7,797
  4. Bank of America (Visa) – $1,344.97
  5. Juniper – $0
  6. Discover – $4,979.02
  7. American Express – $0
  8. Discover #2 – $862.70

Writing everything down was my first step in eradicating all my credit card debt, and is likely to be your first step too.

How to Record What You Owe to Credit Card Companies?

There are three main ways to create a debt spreadsheet that can track your progress (or backslides):

  1. Regular pad and paper
  2. FREE Online account aggregator like Mint
  3. Excel Spreadsheet

The regular pad and paper can work for visual people who need the spreadsheet staring at them as they brush their teeth every morning.  It is a bit old school for my tastes but then again, I run a personal finance blog.

The second way is by allowing Mint to securely connect your credit cards to their system.  Their system will update your daily balances and provide trends as you pay off the credit cards.  If you like pretty graphs and charts this is a perfect way to do it.  As an added bonus the system will tell you what you are spending money on too…this way you can create a budget.   Oh it is free.

Lastly, there is the excel spreadsheet.  It is not as easy to use as Mint but I felt like it combined some of the features of the two previous options.  Specifically, I used a free one titled, Debt Snowball.  The debt snowball spreadsheet, not only provides you a space to put in your debt it will calculate how long it will take you to pay it off.  You will need some excel skills if you are going to get fancy with it.


Are you currently paying off credit card debt? What tools are you using?



  1. One of the first things you should do is figure out why you are in debt? Dealing with the result is only one part of the problem. Many marriages break up over money issues.

    • Great point! I believe the number reason for divorces are money issues. First as krantcents said you need to figure out your spending habbits otherwise you’ll end up just where you were. Second do as you said and find out how much you owe. Finally pay it off and vow to never make that mistake again.

      -Ravi Gupta

  2. Failing to discuss finances, particularly debt can be a relationship killer. Whether you acquire the debt prior to marriage or during the marriage the end result is the same–you have debt. Knowing how much you owe and to whom is essential in figuring out your next moves. The key to any relationship is communication–don’t let finances be the cause of arguments in your household.
    Great post!

  3. Definitely a good place to start, my friend. Knowing where you stand is the only way to make a plan for the future (as well as understanding how you got to where you are today). I am trying to pay off credit card debt (and using student loans to make a sizable dent in the credit card debt, which leaves the student loans to deal with as well), and I am fan of Mint as a decent tool for money management (although, Mint doesn’t accept too many of my accounts, so that is a complication). I do also find that filling out my financial spreadsheet at the end of each week helps me to keep track of where all my money goes.

  4. I don’t have any debt, but I do motivate myself for saving money by giving myself little rewards at the end of the month if I save $x. Sure I might save more if I didn’t reward myself but then I probably would not have the discipline to save anything at all.

  5. i’d start with acknowledging that one is in debt and that the right thing is to get out of it. visualization is very important and i agree with putting pen to paper, perhaps posting it on your fridge (this seems to have worked for Americans historically) . . . only in America have i seen fridges that look like abstract art – not a bad thing at all 🙂

  6. I’d argue that the first step of getting out of debt is wanting to do it. If a person doesn’t want to do it, they’ll stop themselves when times get hard.

  7. i have 2 credit cards and I try to be responsible with using them but, more often that not, I over use them which leaves me in abit of a pickle. The thought of cutting up my cards scares me and i cnt bring myself to do it! I know I need to but i keep ignoring it and soon I will end up in trouble! I feel as though I am fighting with myself writing this comment aswell! grrr!

  8. I have no debt at the moment. Previously there were two long, but I explained myself that tomorrow will be better and so on, but it did not help) had to save on entertainment, and share the budget system “envelope”.
    one part of the food, the second part of the transport, the third part to repay debt.

  9. The reality about debt is that the people who get into it, never seem to want to change. You can’t keep taking out consolidation loans in order to go and get more credit and start the cycle all of again. I think that people who are in debt can be educated and saved, however they must want to try. As, always great blog.


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