Steps to Take Control of Debt

Don’t take on new debt: a great way to accomplish this is by developing (and sticking to) a budget. To get started on creating a budget, track your expenses for a month.

Take a snapshot of current debts: this is a good time to check your credit score. For each debt you owe, write down the current balance due and the interest rate.

Add up your debt payment money: determine how much you can afford to put toward paying down debt each month. Creating a budget will help you see if there are areas of spending you can cut to free up money for debt payments.

Set up a debt payoff schedule: sort debts from highest interest rate to lowest. Pay them off in this order. Now add up all minimum payments and subtract that from the total amount you have to put toward your debt each month. Take the difference and add it to the payment amount for the first debt. That will be your monthly payment for that debt.

Get started: pay the payment you calculated for the first debt plus the minimum payments for each other debt until the first is completely paid off. Then take the money you were using for that payment and add it to the second debt’s minimum payment. Continue this until all debts are paid off.

Follow these five steps to gain control of debt so you can focus on preparing for your financial future.

More information about controlling debt:

One Day is Today
Video: Paying Off Debt

NOTES: The information is provided for educational purposes only and is not intended as financial or legal advice. 

Neither American United Life Insurance Company^® (AUL) nor their representatives provide tax, legal or investment advice.  For answers to specific questions and before making any decisions please consult a qualified attorney or tax advisor.