The Tipping List

Want to know the single healthiest thing I've ever done for myself?

I paid down my debt.

That's right. I'm healthier now in so many ways - not only do I no longer owe tons of money, but my stress levels are waaaaaay down, I feel better about myself and my future, and I feel free! Those commercials are not wrong -- freedom from debt is the best gift you can give yourself (and your family).

Three years ago I was saddled with about $10,000 worth of debt - not including my mortgage. What was the debt? Credit card spending from college, credit card spending due to a period of unemployment, and medical bills leftover from a boyfriend's stint in rehab (talk about mistakes that won't be repeated!).

So, how exactly do you go about it? The simple answer is "pay it off" - but sometimes things are so overwhelming that it's hard to know where to start. Here's what I did:

1. I figured out exactly how much I owed, and to whom. This is where I had to get really honest with myself. I pulled out every single credit card statement, my mortgage statement, school loans, personal loans - any sort of debt that I had. I wrote it all down on a spreadsheet that I created and tallied it up. It was a hard number to look at, and very, very sobering. Up until that point I truly had no idea just HOW much debt I was holding on to.

2. I started tracking my spending. This step seems like it might be useless busy work, but it's it was vital to figure out exactly where all my money was going. It was so easy to think that all my money was going to bills and necessities, but when I really looked at where I was spending, I noticed lots of little areas where I could cut back. So, I spent a month writing down everything I spent money on and how much I spent. (I even continue to do this today, because it keeps me responsible.) Then I was able identify places to cut back on spending, and that money went towards paying down my debt.

3. I learned how debt works. In order to pay down debt, I had to understand how the system works. I found that the key to everything in paying down debt is to always pay more than the minimum payment. This way, I was paying on the principal amount of my loans, and not JUST the interest. I diverted all that extra money from step 2 to these payments. I also contacted all of my credit card companies and negotiated a lower interest rate -- it's easier than you think it would be. "Ask and ye shall receive" is truly the way it works in most cases.

4. I STOPPED spending. This is the simplest and most important step in the process. I just stopped. After looking at my spending spreadsheet from Step 2, I realized I was hemorrhaging money somewhere that I didn't have to be. I staunched that flow, and put all of that money toward my debt. Honestly, I didn't even notice that it was gone from my life - and really, Starbucks coffee isn't THAT great to begin with.

These are the four most basic steps you can take to trim your debt. And cutting your debt may be healthier for you than munching on celery sticks to lose those last five pounds. The stress-relief alone is worth it. Trust me. Plus, once you reach your goal, you can give yourself a present - say, a really swank pair of boots (not that I'm talking from experience or anything).

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