How You Can Manage Debt in 4 Steps and Keep It That Way

The first step to take is how you can manage debt. No matter how much we are in denial of the

amount of debt we accrue, sometimes we just don’t want to face the reality of it.

Before anyone can take charge of their financial situation, the first step we all need to do is to face it.

I’m very fortunate enough to say that I don’t have a ton of debt and I have my childhood to thank for. What I saw growing up has taught me a lot of things about managing my debt.How It All Started

Both of my parents are immigrants from the Philippines and didn’t have much growing up. I’m very thankful for having great hardworking parents, but at a young age, I could never understand why they never let me get anything I wanted. Now that I’m older, I can now understand it from their perspective.

And here I thought my parents were just stingy.

When I was 15, I asked my parents for a cell phone because all of my friends had one, obviously they said no and that if I really wanted one, I could get a job. Well I got a job, bought my first Nokia phone, and learned to provide for myself. Since then I had worked 2 jobs to put myself through college and paid off ALL of my loans which included a personal loan and a student loan which added up to about $27,000. That amount may not seem like much to you but I also had credit card balances for Macy’s and Best Buy. Other than those debts, I had monthly bills such as rent, car payments, and a cell phone bill. I honestly don’t how I survived those college years, it was hell for a student fresh out of high school.

Since then, I tried not to accrue a large amount of debt, I would pay way more than the monthly minimum and if the balance got too close to the credit card limit, I would pay off a big chunk and then work towards paying it off monthly.

How You Can Manage Debt

First, list your monthly bills and an estimated payment of each bill.

Doing this will give you an idea of what your total expense is for these recurring payments and debts. Here’s my snapshot of my monthly bills and payments.

This snapshot doesn’t include budgeting for groceries, gas and other monthly expenses.

Bill Payment
Electric $122
Gas $46
Water $15
Cell Phone $166
Association Fees $48
Cable $100
Macy’s $515
Gym Membership $125
Credit Card $416
401(k) Loan $6,790
TOTAL $8,346


Now that I see where my expenses go, I can take a look at what I can cut back on. This is the first step I took to get an overview on managing debt.

My debt management strategies

These are the first steps that was suggested on how you can manage debt.

I Cut Back On Reoccurring Payments

Cable bill – We were coming up one year with our cable company and our bill would be higher after the promotion ends. So what did we do? My boyfriend (account is under his name) called them to see if there were any other new promotions. And guess what? We ended up with a better package deal for the same price that would last for 2 years.

Gym Membership – I pay for myself, my boyfriend’s and my sister’s membership. Since I have signed up under my employer’s promotion, I’ve only gone back to the gym once. That’s pretty sad considering I would go 4 times a week before I got pregnant. I decided to cancel my membership and that’s $40 I got back.

HP Printer Service – I got this deal because I was in my newbie couponing phase and all I could think about was couponing. So when I purchased a new printer, Best Buy had a promotion where I could pay a monthly service fee for cheap ink that is mailed to me when I need it. It was a pretty good deal but after 6 months of couponing, the motivation slowed down. It was a service I no longer needed. That’s about $3 back in my pocket.

The Snowball Effect

Macy’s Bill – Macy’s is awesome. I could always find good deals and yet so bad because it’s so easy to rack up charges. Instead of saving whatever I could in a paycheck, I immediately paid off the balance. Then, whatever amount I’ve been using to pay off my balance with I’ll add it towards my Citi credit card balance. I chose to pay off Macy’s balance first because my Citi credit card is still new and I’m in the time frame where I’m not charged any interest fee’s yet.

I Needed to Pay Myself Back

401(k) Loan – Did you know that if you take out a loan from your 401(k) it will be money that will not be invested into the market? I had taken out a loan to help pay part of our down payment for our home, and I recently found out that it will take me 20 years to pay off the total of $7,000.

I didn’t like that idea.

Once I pay off my credit card balance, I will have extra to put towards the loan. I don’t want to wait 20 years. I’ll be 50 by then and I want invest that amount into the market. I also downloaded the NetBenefits app to help making extra payments a much easier process.

The whole idea is to have money to able to able to retire.

Now it’s your turn to get an overview on managing debt

Spend at least 15 mins or so and make a list of any recurring charges. Get an overview of your monthly services and credit card balances. Downloading apps to help track your spending also helps.


You took your first step how you can manage debt.

Want to see how I’m keeping track of my finances using apps?

Continue Reading...  Best Budgeting Apps That I Use to Help Me Track Expenses

What have you learned after making your list?



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Hi! Welcome to Mommy Finance. I'm a full-time working mom of one. Finance can drive anyone crazy and I try to keep it together. Join me as I write about budgeting, money and family.
Join Me On

Hi! Welcome to Mommy Finance. I’m a full-time working mom of one. Finance can drive anyone crazy and I try to keep it together. Join me as I write about budgeting, money and family.

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