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Ask Dave

Journey Out Of Debt

Steve has a rough income to debt ratio. His journey out of debt is going to be a step-by-step process.

QUESTION: Steve has five kids, makes $70,000 a year and has $130,000 in debt. He wants to get started on his Baby Steps. Dave says to work hard, but reminds him that this will be a journey.

ANSWER: You’ve got a rough income to debt ratio, and this is going to be a step-by-step process. You have to do a written budget each month and every month for the rest of your life. Most of the time when a person makes a budget, they feel like they’ve gotten a raise because managed money works harder. Take care of necessities first like food, rent, utilities and transportation.

Talk to your credit card companies and threaten to move the balances to other cards if the rate isn’t lowered; but remember that interest rates aren’t your problem … overspending is. You’ve had death by a thousand cuts here; a big family and a lot of bad, small decisions that add up. However, you’re doing the right stuff and you’re willing to change. You’ll make it.