How to stay above water when drowning in debt

Editor’s note: Feb. 22-28 is Military Saves week and your BBB serving Central, Coastal, Southwest Texas and Permian Basin will have daily posts highlighting ways to save money. While these tips are written with military members and their families in mind, these are valuable savings tips for all consumers.

It’s a common saying by many struggling to get by; ‘I’m drowning in debt’.

Trying to stay afloat while still paying for basic necessities like groceries or rent can be difficult, but it is possible. The first thing is to identify if you’re not managing your debt well. Here a couple things to ask yourself:

  • Can I only pay minimum payments on my credit cards?
  • Do I worry about finding the money to make monthly car payments?
  • Do I borrow money to pay bills?
  • Have I used a home equity loan to refinance credit card debts, then run up new revolving balances on my cards?

If you have said yes to any of these, you may need to take another look at how you manage your debt.

How do I reduce my debt?

So what’s the first step? Stop borrowing. It may sound easy, but it can be difficult. It is critical to stop spending more than you earn.  If not, you will be caught in the same cycle of borrowing when in need of money – leading you deeper into debt. Here are some other tips to keep in mind:

Keep your change. If you keep 50 cents a day over a year you could save almost 40% of a $500 emergency fund.

Make a budget. Figure out the most you can afford to pay each month to reduce your debts, then make those payments without fail. If you have debts on more than one credit card, either pay off the card with the highest interest rate first and work your way down to the card with the lowest rate, or pay off the smallest loan first and work your way up to the largest. Once you’ve paid off your debts, don’t give in to the temptation to start over-spending again.

Get professional help. If you live on a military installation you contact the Family Readiness Center for free.  Personal Financial Managers and counselors can assist you in developing a debt repayment plan. Additionally, MilitaryOneSource offers free financial counseling.  Visit their website or call 1-800-342-9647 for more information.

Starts a savings account. After paying off your debts, don’t be tempted to begin over-spending again. Instead, use the money you were using to pay off debts and put it away into a savings account. This will give you financial flexibility in case of an emergency.

Cutting down expenses

So you’ve got your debt under control. What now? Start thinking about the little ways you can cut down on your spending. has a page dedicated to helping you find the best ways to save. Click here to check it out.