Understand your Debt
"How much do I owe each month, and how much interest am I paying?"
Review all your loan statements and bills to fully understand your monthly debt and the interest you are paying on each debt.
What is the total amount of debt I owe?
To understanding the full picture—of all balances, interest rates, and due dates
What is Credit?
Credit is the ability to borrow money or access goods or services with the understanding that you'll pay later.
Is this something I need to survive or function daily??
Food and Shelter
Ensure that your monthly debt obligations and necessary expenses are below your income!
"Do I have enough money to pay for everything I need each month?"
What is my monthly income and how much can I afford to put toward debt?
determine how aggressive the repayment plan is and adjust spending or increase income.
Is credit debt?
Debt is what you owe after using credit. Once you borrow money or use a credit card and haven’t paid it back yet, that amount becomes your debt.
Things that enhance your lifestyle but aren’t critical. 3 answers
Fast food
Entertainment
uber rides
Unsecured Debt?
Unsecured debt is a type of borrowing that does not require collateral, meaning lenders cannot claim specific assets if the borrower defaults.
Which debts should I prioritize?
High-interest debts
Smallest balances
Or secured debts
All 3
What are the different types of credit?
Is it ok to treat self?
Yes! in moderation so you stay on budget when getting out of debt.
Revolving Debt?
Credit that renews as you pay it off (e.g., credit cards).
Is consolidate your debt Good Idea or Bad Idea?
It can be both good and bad it up to you and if that's what you need
What affects your credit score?
Payment history (on-time payments)
Credit utilization (how much of your available credit you're using)
Length of credit history
Types of credit (credit cards, loans, etc.)
What do people say to themselves what would happen if I didn’t have or buy this? 2 answers
A. It would seriously affect my health, safety, or ability to work
B. I’d be okay—it might be inconvenient or disappointing, but manageable*
Cellphone debt?
high costs of devices and frequent upgrades. It can include monthly smartphone contracts, overage fees, and device financing.
What is the timeline and tracking progress?
Set realistic goals (e.g., “Pay off credit card in 6 months”) and use tools like budgeting apps or spreadsheets to stay on track.
How can you build or improve your credit? 4 answers
Buying this to solve a problem or to feel better emotionally? 2 answers
A. It solves a real problem or fulfills a basic need
B. It’s mostly for comfort, fun, or emotional satisfaction**