Tips and Support to Get Out from Under Your Debt Burden

Brenda S. McDaniel, Program Analyst, Personal Financial Readiness Program
(Military Community and Family Policy)

A better credit score, less stress, and the financial freedom to keep more of your money for yourself–these are just a few of the benefits of paying down your debt. Reducing or eliminating debt also contributes to financial readiness, helping service members focus on the mission at hand instead of worrying about the finances at home. The sooner you address any debt issues, the better, so take control, make a plan, and get started on getting rid of your debt.

The first step on your path to debt reduction is facing your debt problem and resolving to fix it. Discuss your debt with your family or a financial counselor as a way of acknowledging the reality of your situation and taking action to improve it.  Second, stop using credit for at least one day, and use checks, cash, or debit or ATM cards to cover all of your expenses using money you already have. Day by day, try to continue using only cash or its equivalent—not credit—to pay bills and make purchases.

Next, create a spending plan you can follow to keep your expenditures under control. Every day, track your expenses by writing down every single thing you buy, whether it’s a pack of gum or dinner and a movie, and the amount spent. Finally, systematically pay off your debts one by one, paying off either the card with the highest-interest rate or the lowest balance first. For additional details on how to follow these steps to eliminate your debt, check out Getting Out of Debt: A Step-by-Step Guide at Military Saves.

You can also visit your installation’s Personal Financial Management (PFM) office to get more information and tips on debt reduction. They help service members and their families to analyze assets and liabilities, formulate a repayment program to eliminate debt, and help contact creditors. Once you’ve developed your plan, the PFM staff will even help monitor it to ensure that debts are satisfied and that you are able to take care of your finances on your own. Military OneSource also offers financial counseling services and financial planning consultations that include advice on debt management and dealing with debt collectors.

A word of warning about debt settlement or debt relief firms:  While their ads can make these companies seem like the ideal solution to your debt problems, they can get you even deeper into trouble. Beware of any company that advises you to cut off contact with your creditors, charges you fees up front, or promises to eliminate your unsecured debt. Find out more about how to protect yourself at the Federal Trade Commission’s Knee Deep in Debt page.

Once you’re out of debt, make sure you stay that way by creating and sticking to a budget. This worksheet can help you design a budget based on your income and expenses. If you must continue to use credit for some purchases, use it only when absolutely necessary. Choose the card with the lowest interest rate, make more than the minimum payment each month, and be sure to pay on time to avoid late fees. For a debt reduction calculator and worksheet, a debt management calculator, a credit card payoff calendar, and other tools check out the Military Saves website.

If you have successfully paid off your debt, share your knowledge by joining our discussion. Paying off your creditors isn’t rocket science—it just takes time, a plan and some fiscal discipline. Resolve to reduce your debt today, and enjoy greater financial security and peace of mind tomorrow!

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  • MJ Parks

    Great post, article is very helpful, especially these days I don’t know if there is one adult person who does not have any debts at all! A lot I know have been struggling to pay and manage their debts, this article can surely help them. There is also one article I found in http://www.regions.com/advice/debt_control.rf about getting debt under control, it helped me a lot, so I think it’s also worth sharing. Thanks and happy holidays!