Despite headlines that point to "green shoots" and other markers of economic recovery, we are all still feeling the recession's pinch. Many are trying to hold onto the jobs they have. Others are looking for new ones. And pretty much everyone is trying to stretch their limited cash supply. Most of us are also juggling some kind of debt, whether it's a mortgage, student loans, credit cards or all three.
Debt isn't always a bad thing. A mortgage can help you build equity in your home, and those student loans are often a necessity if it means you land a better paying job down the line. Both are investments worth making, and both come with fairly low interest rates. But when you have more debt than you feel you can handle, particularly when it's high interest rate credit card debt, it can weigh on your mood, your health and even your relationships.
But it doesn't have to feel like the end of the world. You can dig yourself out of the hole, and just as importantly, learn to manage the intrinsic stress. "Focus on taking that next step," says Gerri Detweiler, author of the new e-book "Reduce Debt, Reduce Stress." "With financial problems, there's no easy way out, but there are steps you can take and as long as you keep moving, you're going to move in a better emotional direction."
-- Tackle the problem. You have to start by knowing what, exactly, the problem is. Yes, of course it's debt, but how much debt do you have, and how much money can you put toward paying it down each month? Add up your credit card balances, then track your expenses for about a month, taking stock of every dollar that goes out of your wallet. Once you do this, it will be easy to see what can be eliminated. (Very often, it's things you didn't even recognize as an expense, like that sandwich at lunch or your random stops at the newsstand for a magazine.) Put that extra money toward the card with the highest interest rate, while paying the minimums on the others. Once that card is paid off, you can shift your focus to the next highest, and then the next, until you're out of debt once and for all.