Budgeting Basics | Face Your Debt Demons

Earlier this week, I talked about the “budget leaks” we have been experiencing in our budget this year. And I encouraged you to take a look at your budgets and find your own leaks.

“That’s all well and good,” a reader named Rachel (not her real name) said in an email to me later that day.

“But we’ve got floods, not leaks.”

She went on to tell me that they have tons of debt – and she doesn’t even know how much. Or what it’s on. “It’s like we have monsters hiding in our closet.”

Oh, how I remember that throat-crushing feeling.

It’s horrifying. You’re doing everything you can to keep all the balls in the air, but every time a bill comes in the mail, it sends you into a tail spin.

If you can’t relate to this monsters-in-the-closet feeling, awesome!

But if you’re struggling, buried, suffocating under what feels like a mountain of debt – let me offer you some hope.

The single best thing I did when I was feeling like this was to face my debt demons head on.

It was ugly, yes.

And it took a while (the better part of two afternoons).

But once I had faced it, and put it all down on paper, I actually felt better. I knew how much we owed, down to the last penny (and agura) – and to whom we owed it. It’s really true what they say: Knowing is half the battle.

If you’re ready to crawl your way out of debt, let me encourage you, before 2011 ends, to sit down and face your debt demons.

Gather up every single bill you can find. Credit card bills, student loans statements, personal loan statements, medical bills, store charge accounts, recent bank statements (I just went online to get these), and utilities and mortgage bills – especially if you’re behind on them.

Pile it all up on the kitchen table, then pour yourself a large drink of your favorite (non-alcoholic 😉 ) beverage and dig in.

I went old school – pen and paper. That made it more real for me. But if you’d rather do it on your computer, that’s fine, too.

Open each bill, write down the name of each debtor (Visa Card, Electric Company, etc.) and the total balance due. If a bill has a minimum payment option, make a note of that, too.

Do this over and over again, until you have emptied every envelope.

Now take a deep breath and grab your calculator. It’s time to tally it all up.

No matter what your number is, that number is yours – and the good thing is, from this day forward, you are committed to not letting that number get any bigger. This is as bad as it’s going to get.

No more monsters in the closet.


  1. I like to use Pageonce.com for all this stuff. its easy to use, safe and I find it more simple than Mint.
    It doesnt show budgeting options like mint does but you can pay your bill from the site/app and get all the reminders that you can from Mint

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