Friday Five: The First 5 Things You Should Do if You Are in Debt


The “Friday Five” are five items to help you in your journey to financial freedom. They might be 5 tips, they might be 5 tricks, or they might just be 5 items of thoughts. In any case, it’s Friday, and I’ve got 5 “things” for you, so here we go!


As you can see, I’m trying something new with the Friday posts here. I like having some themes that I can dock to, such as the “Thursday Think Tank,” and the “Tuesday Tip Jar.” On top of this, I feel like you kind of don’t want a long post getting in your way on a Friday, and would prefer just to get out there and enjoy your weekend.

So these “Friday Five” posts will be a bit shorter, and get right to the heart of the matter, of hopefully providing you with 5 items you can use to help with your financial health and success.

So here goes! We’re going to kick the first one off with the first 5 things you should do if you find yourself in debt.

Back in January, my wife and I found ourselves in a buttload of debt. If you aren’t familiar with some of these fancy financial terms such as “buttload,” just know that it was a LOT. If you check that fancy little diagram/chart in the right column of this site, you can see we were just north of $126,000 in Credit Card and Student Loan debt.

Even though it took us years to get into this position, it was a smack in the face once we took a hard look, put it all together, and realized just how bad off we were. We didn’t really know what to do first, and just felt an initial sense of helplessness.

Debt can be super-scary, and you may not know where to begin. So let me give you 5 good initial areas to focus on if you find yourself in a similar situation:

  1. Close Your Cards – We had tried a few times in the past to dig out of debt, but we always failed at it. Part of the reason for this is that we could never bring ourselves to actually closing our cards.

    “What if something goes wrong and we need a safety net?”
    “I don’t really put that much on that Discover card. Just leave it.”
    “If we pay everything off but keep the cards open, it will help with our credit score.”
    “That interest rate is relatively low. It’s almost like using cash.”

    It never worked. Having those accounts open just allowed us to slip too easily back into our old ways, so that even if we made some progress, we wasted it all by putting it back on the cards again.

    It’s like the person trying to lose weight who buys the industrial size pack of Oreos from the supermarket and tells themselves that they’ll only eat 1 at the end of every week as a reward for sticking to their diet. By day two of said diet, the Oreos are gone, they’ve consumed all of the milk in the fridge, and they are 3lbs heavier than when they started.

    Don’t buy the Oreos in the first place!

    Unless you have some significant reason to need stellar credit score on the horizon, just close the damn things and know that you’re only going to see that monthly balance go down from this point forward.

  2. Take a Hard Look at Your Interest Rates – We had some pretty stupid interest rates, some of which were nearly 30%. That’s not a typo. THIRTY PERCENT.

    That’s just silly. If you’re going close out your cards and pay them off, why let that amount of money go towards interest? We called every single credit card company and asked for a reduction in interest. I’d say roughly half of them agreed, and for the half that didn’t, we found a low interest consolidation loan through to refinance them through.

    Those “0% Interest if Paid in Full” cards can be the worst. Typically the interest rate that kicks in following the promotional period is bonkers, so read the fine print and know what you’re in for if you don’t get stuff paid off in time.

    Bottom line is work to get your interest rates lower across the board, and know that it’s completely worth being on hold with your credit card company for an hour or two. Paying off debt sucks. Don’t make it harder on you than it needs to be.

  3. Dig Into Your Spending – Track every single penny you are spending each month, and leave nothing out. Especially in the early phases of the process. We started this journey in January via a spreadsheet that I built, and it took about 3 months for us to really feel confident that we had ever cent accounted for.

    Oh… and stop buying dumb stuff.

    David Bach calls this “The Latte Factor,” and I highly recommend you research his line of thinking around this. David Bach’s Website

    Simply put it means that you need to stop spending your money on what you “like” and focus on spending it on what you “need.” You “need” to save for retirement. You “need” to pay off debt. You “like” that six pack of beer you buy on the way home. You “like” eating out 5 times a week.

    When we committed to this, we had lots of people say to us, “That doesn’t sound like very much fun.” It’s not. You had the fun part of it when you were throwing money on credit cards and living beyond your means. The time has come to pay the piper. It won’t last forever, and hopefully it will sting just enough to always serve as a reminder of why you shouldn’t get yourself into this situation ever again.

  4. Talk to Your Employer – I know this one doesn’t work for everyone, but when we got into our jam, I had someone say to me, “Why don’t you ask for a raise?”

    That’s not always a plausible thing to do, but in almost all cases I would encourage you to at least ask. The absolute worst that can come from it is that you get told no, and the best is that you get some extra cash to help dig out.

    Be open and honest with your boss/manager/owner and share as much as you feel comfortable doing so. If you’re a good employee and have proven yourself worthy, this may just be the catalyst that pushes you to that raise or promotion you’ve deserved for a long time!

  5. Get Educated – This is the BIG one. If you’re anything like we were, then it means you weren’t taught how to properly manage finances in school or by your parents. BREAK THIS CYCLE! Learn about your debt and teach others to avoid the mistakes you made.

    In the day and age of the fancy internet, don’t let lack of resources be a crutch any longer. Watch videos on YouTube, read books by the likes of folks like Dave Ramsey or David Bach, listen to financial podcasts, and in general GET EDUCATED.

    For us in the early days of this journey, we couldn’t even afford $30 for a hardcover book. So we hit used bookstores, listened to free podcasts, or bought digital versions of the books which are usually substantially cheaper.

    If you have the ability to do so, I highly recommend you meet with a Financial Advisor of some sort. Talk to your friends who are doing well financially and ask them for recommendations. Find someone you can trust with a proven history in the industry, and then listen to every bit of advice they give you.

    Don’t let your ego tell you that you know how to fix this problem. Even if you do in the grand sense, it doesn’t mean that these other resources won’t give you tips to accelerate your journey to financial freedom.


Getting blindsided by debt can be a real bummer. Almost overnight we finally came to terms with the mess we had put ourselves in, and then flailed for some time trying to figure out what the hell we were going to do to remedy it. Using the 5 items above, you can at least get things moving in the right direction.

Good luck, and know that you’re not alone in this!

Have a great weekend.


Got an item to add to the list above? What about a suggestion of your own for the “Friday Five”? Let me know in the comments below!

4 thoughts on “Friday Five: The First 5 Things You Should Do if You Are in Debt

  1. Good tips… especially number 5. I’ve never used the (precious little) Calc I learned… I’ve occasionally used the trig and geometry I learned… I’d like to say I’d like to see a financial planning course (checkbooks, interest, taxes, saving, etc) in our schools, but I’m sure they’d just screw that up too.

    Of all the gifts we can give our kids, this might be the best one.

    Liked by 1 person

    • 100% agree. My son is now investing in stocks, and my daughter just opened a savings account. I will make sure they don’t repeat my mistakes!

      Liked by 1 person

  2. Dave – good advice. How did you closing your cards affect your Credit Score? I always read that your debt to available debt ratio has a big impact on your score.

    Have you heard of or joined the ChooseFI facebook page? I think you would love it. so many good questions and lots of smart answers. They have a podcast too which could help you with staying excited and focused on paying off your debt.

    Liked by 1 person

    • I’m not worried about my credit score. We have relatively new vehicles that will last us several more years, I’ve got my house loan secured, and other than that, I plan to pay every damn bit of debt off that I have (and then the cars, and then the house!) Ramsey is really bullish about not caring about your credit score, and while I’m not quite that aggressive, I’m also not too worried about it.

      Why… do you know something that I don’t? 😉

      Thanks for the recommendation on the ChooseFI! I had never heard of it, but am now part of the FB page and have subscribed to the podcast. After I’ve absorbed it a bit, I’ll probably post about it here on a Tuesday Tip Jar, so thank you for spreading the knowledge!!!

      Have a great weekend!


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