How To Pay Off Your Debt When You Don’t Know Where To Start

Most people have struggled with debt at some point in their lives, including my wife and I.

Believe it or not, my wife graduated from college with over $80,000 of student loan debt!

She had no clue where to start in her journey to pay off her debt and I know she wasn’t alone.

In fact, a friend recently asked the same question.

Our friend is in debt and wants to get out of debt but has no clue where to start. Many people around the world are in the same exact situation so I wanted to share some easy ways to get started on your adventure of destroying your debt.

Just remember, it is likely your debt won’t disappear overnight. Paying off debt can be a long journey, but it’ll be more than worth it in the end.

Let’s get started with the first step.

Step One – Get Together A List Of Every Debt You Have

The first step to pay off your is to know every debt you owe. This can be a bit overwhelming, but it is a necessary first step.

I personally start by pulling my free credit report from, the only place where you get 100% free credit reports as authorized by federal law.

You can pull your credit report from all three bureaus if you wish or you can simply pull one report from each bureau every 4 months if you want to monitor your credit for fraud. Either way, you’re entitled to one report from each bureau (Experian, Transunion and Equifax) per year.

This report will show you a list of all of the debts that you owe other than loans from friends and family. The balances owed may be a month off if your creditor hasn’t reported your most recent payment, but it will give you the big picture of who you owe money to.

Once you have this list of who you owe money to, it’s time to dig deeper to get the rest of the information you’ll need.

Step Two – Find Out Everything About The Debts You Owe

Now that you have a list of who you owe money to, it’s time to figure out everything else about your debt. Here’s a list of what you’ll need to know about every debt you owe:

  • Exact amount you owe
  • Payment amount
  • Frequency of payment (monthly, quarterly, etc)
  • How many payments left (if fixed term debt such as a mortgage, student loan or car loan)
  • Interest rate and whether it is fixed or variable
    • If variable, what the rate is based on (prime rate, LIBOR, etc)
  • Due dates
  • Grace period (if applicable)

Where do you get this information? To find out how much you owe, check your most recent statements.

For everything else, you’ll need to do a little bit of digging. For loans, check the loan documents you signed. If you can’t find the loan documents, try calling the creditor or log in to their website and check your account details.

For credit cards, check the terms you agreed to when you signed up for the card. You may also be able to find this information online after you log in to your account on the credit card’s website.

If you’re having trouble understanding the terms, call the number on the back of your credit card. A representative will be more than happy to help you.

Step Three – Assess Your Debt Situation

It’s time to look at the big picture now that you’ve figured out all the details on every debt you owe. It probably won’t be fun and it could be just plain ugly, but you have to do it to move forward.

First, add up the total amount of debt you owe. The number may be scary but we’re going to work on knocking it down, so don’t worry too much yet.

Next, take the amount of all of your monthly payments and add them up. This the minimum amount of money that you owe on your debt every month. Again, this can be overwhelming, but you’ll be able to knock this down as you pay off your debts one at a time.

Congrats! You’ve Started The Debt Pay Off Process!

The steps you’ve completed so far have gotten you well along the process of paying your debt off. Even though you may feel like you haven’t made any progress yet, that couldn’t be further from the truth.

You now know everyone you owe money to, how much money you owe in total and how much your total monthly payments are. You now know the basic information you’ll need to make intelligent decisions on how you’ll pay your debt off.

The next step in paying off your debt is setting yourself up for success in your debt pay off journey. Read about it here.

Do you have any questions or concerns about how to perform the steps in today’s article? If so, leave a comment or contact me directly and I’ll do my best to help!

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About Lance Cothern

Lance Cothern, a Certified Public Accountant (CPA) licensed in the Commonwealth of Virginia, is the founder of Money Manifesto. You can read more about him here or connect with him on Facebook, Twitter, Google+ or Pinterest.


  1. Yep, that’s totally how you do it. You just have to actually do it instead of putting it off for another day =) Great post, Lance!

  2. That’s how we started. It’s one of the most eye opening processes out there!

  3. Anne @ Unique Gifter says:

    Sounds like a pretty solid start, though a bit of a scary one for lots of people!

  4. I really like the way you answered this question. The first step is to look at the problem.

  5. Getting started is difficult….but as they say, “how do you eat an elephant? one bite at a time.” For us it was picking up that phone and admitting that we needed professional help….

  6. Great post, Lance. I think gathering all the information and having it organized right in front of you is the key to getting started. When you don’t have all the debt information readily available, things can get muddled and it’s impossible to create an efficient debt payoff strategy.

    • If you don’t have your ducks (or loans) in a row it can cause a huge mess with unintended late fees, missed payments and other issues. Having a top down look definitely gives you the best look at how to approach your debt pay off.

  7. Very good tips Lance! I don’t have any debts at the moment, but if I have, I will surely follow your tips.

  8. Great advice Lance, I also think people will get a huge amount of motivation once they start to see the results of their debt payoff plan.

  9. Very helpful piece, it’s important to know the challenge in order to conquer it, and lining up debts, rates, and due dates in a spreadsheet is the perfect way to do it. The best part is? You can hopefully watch that number dwindle every month =)

  10. What if you don’t have enough money monthly to make extra payments?

    • Angie, not having enough money is one of the hardest things to face. If you’ve already cut your expenses to the bare minimum, the only other option is to make more money. You can try selling things around the house, starting a side hustle or working more hours at a job that pays hourly to make more money. You could also try to find a better paying job. Good luck to you.

  11. Hi Lance,
    Just found your blog! It’s an excellent resource. Sometimes it’s difficult to honestly look at your finances (keeping your head in clouds seems momentarily easier) – I know a lot about this. How do you make drastic cuts when you have kids and incidentals (braces, private school and medical bills) keep cropping up?

    • If you’ve cut your expenses as far as you can, then the other side of the equation is making more money. You might have to sacrifice time to make more money, but once the debt is gone you can cut back down to your normal levels.

  12. Brice Matheson says:

    Amazing article! I think that paying your student debt should be just like ripping off a band-aid – just get it over with. Have a 2-4y span of frugal living and be done with it.


  1. […] Lance from Money Manifesto explains exactly where to start when you feel overwhelmed by your debt. […]

  2. […] I have a ton of tips to help people pay off their debt. In fact, I started writing a series about how to get out of debt when you have no clue where to start on my blog. Feel free to check it out. A couple of quick tips that greatly helped us in our […]

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