I ‘Got Serious’ to Pay Off $10,000 in Credit Card Debt – TIME NextAdvisor

  • September 21, 2020
  • By: Greenpath Financial Wellness

TIME NextAdvisor article about managing credit card debt includes advice from GreenPath’s financial expert Katie Bossler

A 26-year old writer and founder of the blog “Literally Broke” used credit cards as a back-up plan “whenever I ran out of cash,” she said.

Scarlett McCarthy developed a habit of supplementing her spending with credit cards as a college student.

She would let the balances grow, then pay them off when she worked longer hours or had an influx of cash.

These habits continued. After graduation, McCarthy leaned on credit even more to maintain her New York City lifestyle.

“I was doing everything you’re not supposed to do: buying coffee, eating out every meal,” she says. “I just kept putting my daily expenses on my card, and at its highest, it reached $10,000.”

Credit card debt can be a slippery slope, says Katie Bossler, financial expert and quality assurance specialist at nonprofit Greenpath Financial Wellness. “And there is a wall that you will eventually hit because those monthly payments are so high, or there’s nothing left to borrow on those credit cards because you’ve maxed them all out.”

Evaluate Your Debts

TIME NextAdvisor notes that before looking for guidance, a good first step is to understand the specifics of the situation.

McCarthy says the first step she took was making a list of all her debts. Not only was it a foundation for moving forward, but knowing that total and facing it added to her motivation, she says.

Start Here

As the article notes, to tackle your credit card debt, take time to look at your finances as a whole.

Ask yourself the following questions. The answers can help you determine how to approach your debt in a way that’s effective and sustainable.

  • Do you have an emergency fund? Is there a set amount of cash in the bank for security while you pay off debt.
  • Do you have extra cash each month to put toward an aggressive payoff plan? If not, what is the total that is realistic to devote to credit card balances and consider how it may be best allocated.
  • Can you stop using your card altogether and switch to cash-only payments until you have a better grasp on your debts?
  • What does your budget look like? Are there recurring expenses you can reduce to free up more cash for your debt?

Your Financial Goals

While you might not make as much progress on other financial goals during your debt payoff period, you shouldn’t lose sight of them, either.

The article suggests prioritizing debt while building the habits that will help take those next steps toward building up savings or contributing to retirement.

The faster you can pay off high-interest debt, the faster you’ll free up more cash to direct toward your other goals. And achieving your debt payoff goal can make it easier to implement the behaviors you learned along the way into those other aspects of your financial plan.

Start by seeking a counselor endorsed by the National Foundation for Credit Counseling who can not only help provide debt relief but teach you the skills to remain debt free.

The article suggests looking for a national nonprofit that puts the focus on education.

Read the full TIME NextAdvisor article

Have Questions About Managing Debt?

GreenPath’s NFCC-certified debt counselors can walk you through your options when managing your household finances, including figuring out how to manage debt. 91% of people served by GreenPath feel better prepared to handle their finances. Together let’s make a plan for managing your full financial picture to support your goals.

Katie Bossler
Katie Bossler has been with GreenPath since 2003.  She currently serves as a Quality Assurance Specialist and is based out of our Detroit office.  Katie passionately believes everyone can achieve financial wellness and is grateful to dedicate her work in helping GreenPath remix the American Dream so it works for everyone.