Understanding Your Debt
Hi, I’m Saundra Davis, financial coach here at SaverLife. Today we are going to talk about one of the biggest financial stressors in many of our financial lives: debt.
The “No Judgment Zone”
So, the very first thing is remember the “no judgment zone.” Everything that you have done in your financial past that you’re not very proud of, this is the time to remember to be gentle with yourself, and debt is often one of those areas. It doesn’t matter what you’ve done before. What matters is what are you going to do today.
Know Your Debt
One of the things we can begin with is knowing exactly how much debt we have. Not only the total amount, but the individual debts: how much, when it’s due, and how much we’re paying in interest on each one of those debts.
Balance Debt and Savings
Some of you might be tempted to stop saving while you’re trying to pay off your debt. I would encourage you to build your debt reduction budget with saving in mind. In other words, do a little bit of both. You might have to reduce your savings, but I would encourage you not to give up on it completely.
Budget for Debt Reduction
So build your debt reduction plan by identifying who you owe, when the debt is due, and how much you can afford to pay. Make sure that your budget includes debt reduction as well as saving to make sure that you don’t lose the habit of saving that you’ve worked so hard to achieve. And when thinking about your financial goals overall, keep debt and saving in mind.
What are you saving for?
Saundra Davis is a nationally recognized financial coach and educator. Her experience in the U.S. Navy, where she made every money mistake possible, and her 20 years serving community-based organizations led her to the reality that the best way to help people find a path out of poverty is to help them become their own financial expert.