For many, debt is a big, scary word with countless implications. So taking on a home mortgage can be just as daunting. But we are here to tell you… it’s manageable! Whether you are 100% debt free, have a credit card balance, or even a few student loans, getting and managing a home mortgage is possible. You just have to have the right tools and tips to get yourself on the right track.

Of course, he first step in managing your debt is to get organized. And we have a few tips to get you on the right track.


Know your debt

While it seems self-explanatory, the first step to successful debt management is to actually take a look at what you owe (and how much of it there is). So what does that mean for you? Lay out all of your loans, credit card balances, car payments. Add it up and take note! While it may be something you have been avoiding, acknowledging your debt and piecing together a “picture” of it will help you in the long run.


Organization is your friend

A great way to stay on top of your finances is to create a monthly calendar exclusively for your bills. Label the days they are due, you can even include the total of each payment. Then, hang it on the wall or the fridge. When it is present in your daily life, it will keep it fresh in your mind, reminding you to make those payments on time. Tried this and still having trouble? It may be time to consider setting up automatic payments. That way, you are guaranteed to pay on time, month after month.

Next, make a budget. List out all of your monthly expenses- bills, debt, even groceries and gas! Then, put it next to your monthly income. See exactly how much you can save, and how much extra you have to pay towards your debt. Establishing a monthly budget will help you stay on track for making your monthly payments, and help you create a larger “savings” you can fall back on.


Bills, bills, bills

You got it- the next step is to pay your bills on time. Cable, car loan, DTE, student loan. No matter what the bill is, pay it on time! It is very important to get yourself on the right track. Rumor has it that it takes 30 days to create a habit. Make it your habit to pay each of your bills on time, every month.



Any collections or call off’s should be the first to go. Throw your full force (or as much as you can manage) toward these until they are paid off in full. Once they have been paid, you can focus your attention on the principal balances of your debt.


Minimum payments

Most of us have seen that phrase- “minimum payment.” It could be in reference to your student loans, your credit card bill. Anything. Regardless of your overall balance, it is crucial to make that minimum payment! It will keep you on the right path to paying off the total balance, one month at a time.


The bill of most importance

Which debt is of the highest importance? Yes, that’s right. Which one is most crucial for you to pay off (in full) first? A good way to determine this is to take a look at your interest rates. A good rule of thumb is to pick the one with the highest rate. Now what? If your finances permit, take a little extra money each month and put it towards that debt. Even if it is just $30 more than the minimum payment. That extra money will only help you pay off the debt in full that much faster.

Another good trick to keep up your sleeve- let’s say you have a car loan with a $200 monthly payment. Once you pay off your car, take the $200 a month you were budgeting for the car loan and put it toward another debt. Since you are already budgeting that money each month, repurposing it once you have paid off your car loan will only help you pay off other debts. This is a great technique to use, especially if you have a few different sources of debt.


Rainy day fund

Earlier we mentioned how budgeting can help you save money. While creating your monthly budget, we recommend creating a separate “emergency” category you can put savings in to. Maybe you don’t have debt now. But what if you have debt in the future? Or a “rainy day” comes around? An emergency fund is a great technique to give yourself financial stability when something unexpected comes along (and anyone who owns a car knows that car issues always come at the most inconvenient times).

Our final piece of advice? Recognize that you may need help. And, if you do, don’t be afraid to ask for it. Finances can be tricky. Managing debt can be tricky, too. Even if you are in a “good place,” but you have questions about how to budget your income or manage your debt, taking to a financial advisor isn’t going to hurt.

Building the skills to manage your finances now can only assist you in the long run. So, whether you are 18 and just heading off to college, or 65 and looking forward to retirement, successfully managing debt is possible.

Don’t let the fear of a mortgage or debt keep you from pursuing the house of your dreams. Get organized and take control of your finances! Next thing you know, you’ll be sharing your financial management tips to friends and family (from the comfort of your dream home).


Total Home Lending


Natasha Mason