• Consumers
  • Financial Professionals

Aug 15 2011 12:00AM


I’m trying to get out of debt, but I need help getting started. What do I need to do first?


“You first need to understand where you are,” said FPA member Germaine Weldon, CPA/PFS, CFP®. “Make an effort to gather all of your bills and write each one down on one sheet of paper. You can use the computer to build a spreadsheet or use just a plain sheet of paper. Write down the total debt you owe and what your monthly payments are. Next to each item, write down what it is for and what the interest rate is. On another sheet of paper, write down your income. Write down all your necessary expenses such as groceries and transportation to work. Get an idea of what it really costs you to live and what you have spent money on to get so much in debt. From here you can start creating a budget of what you really need to spend money on and what you don't need. When trying to pay down your bills you will have to give up unnecessary items like new clothes and shoes, going to the movie, renting videos, going out to eat or whatever it is that you have been doing to get in this shape.

“Some people go into debt for necessary, but unforeseen, expenses like large medicals bills or catastrophic incidents like hurricanes, tornadoes and fires. Determine what the source of your debt was. There are legitimate consumer counseling agencies you can go to, but beware that some could cost unnecessary fees.”

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