Could you get loan if you need it?
As big and bad as these numbers may be, it’s probably not the balance that is causing you the biggest problems. Rather, it’s probably your monthly payments or debt service. Virtually everything in your financial world, from bills to paychecks, operates on a monthly basis. Injecting $200, $500, or $1,000 of debt service can make surviving month to month utterly exhausting.
Just as you did with your total balances, add up all your required payments before you try and pay any extra, breaking them down into those categories again. Short-term monthly payments (car, credit card minimum payments, medical, etc.) and long-term payments (mortgage, student loans, child support/ alimony).
Record those numbers here:
Total short-term debt monthly payments $__________
Total long-term debt monthly payments $__________
I ask you to consider the short-term debts, because they tend to be the easiest to eliminate, while simultaneously having a large impact on your budget. Even though your mortgage or student loan balance may be 10 to 100 times your credit card balance, the lower interest rates and longer repayment schedule make it relatively painless. Paying down $10,000 on a $250,000 mortgage is not going to change your monthly cash flow that much. Paying off $10,000 out of your $25,000 credit card balance, which is charging you 30% interest per year, will make a huge difference.