Relationships #RealMoneyTalk: Time to Let Go of Your Debt Mistakes Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on Tumblr (Opens in new window)Click to share on Pinterest (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Chelsea Dehner Published Jul 2, 2019 - [Updated Apr 26, 2021] 5 min read Advertising Disclosure The views expressed on this blog are those of the bloggers, and not necessarily those of Intuit. Third-party blogger may have received compensation for their time and services. Click here to read full disclosure on third-party bloggers. This blog does not provide legal, financial, accounting or tax advice. The content on this blog is "as is" and carries no warranties. Intuit does not warrant or guarantee the accuracy, reliability, and completeness of the content on this blog. After 20 days, comments are closed on posts. Intuit may, but has no obligation to, monitor comments. Comments that include profanity or abusive language will not be posted. Click here to read full Terms of Service. Save more, spend smarter, and make your money go further Sign up for Free Debt is a short, one syllable word but the feelings it can conjure are not so simple – fear, dread, anxiety, and hopelessness. In the shadow of student loans and a culture that values “treat yourself” Instagram moments at the detriment of financial stability, life can feel like a never-ending cycle of paycheck, to rent, to utilities, to debt. And most experience this in silence and turn their thoughts into shame. “I brought this on myself.” “I should have known better.” “There’s no way out.” But the reality of it is, you are not alone. 8 in 10 Millennials are currently in debt and only 19% feel “hopeful” or “in control” of it. Over half of Millennials agree that managing money is stressful and it is! Whether you’re starting out on your own for the first time with a brand new credit card, or figuring out your best option for refinancing your student loans, we’re all learning. In school, career, and life in general, we are often taught that making mistakes is completely natural, and helps us grow as human beings. This is no less true when it comes to your finances. Borne out of confusion, ignorance, impulse or misinterpretation, it’s important to remember that debt mistakes happen — and you have to let them go. We’re not saying it’s always easy, but it is important for your mental health and to move forward. Here are 3 healthy steps to take to rid yourself of past mistakes and move on to be a more financially empowered person. Step 1: Find Your #RealMoneyTalk Support 62% of Millennials are hesitant to discuss their financial situation with friends because they are embarrassed that they make less money or are ashamed of past bad financial decisions. When you’re too embarrassed to share your financial situation with someone you trust, it’s hard to set boundaries. And when you’re ashamed, it’s hard to imagine an end point and set goals of getting out of the debt cycle. The journey to financial health isn’t easy, and that’s where support is essential. Whether it be a close friend, colleague, roommate or a family member, sharing your debt regret with someone you trust will help lift some of the burdens you may be carrying. But when we share our experiences and support one another, we learn from each other. Looking for a place to start?, Just search #RealMoneyTalk and you’ll find a community ready to share their stories. Step 2: Know Where You Stand and Make a Realistic Plan Now that you’ve gotten your debt remorse off of your chest, it’s time to assess the damage financial impediment(s). First things first: slow your credit card spending. In the same way an apology does not have meaning without changed action, the remorse you feel will only help if you change the behavior that is hurting you. Do not swipe that card unless you know you’ll have enough money to cover off the bill in your checking account. As a good exercise, grab your most recent credit card statement and see if there are purchases on there that were not necessary. Then, use that as motivation to limit your spending next month. Credit cards don’t need to be something scary, but they should be treated with importance. You’re realistically not going to pay for every transaction through cash or a debit card, but try your hardest to pay off the amount in full at the end of each month. Credit utilization ratio is the amount of your credit card balance compared to your credit limit, so if this number is low, it will put you at low risk to defaulting on your loans. Next, prioritize what debt you can and cannot pay off right now. Tackle those with high-interest rates, upcoming due dates and credit card and personal loan debt. Often times education-related loans may be tax deductible and there is less pressure to pay them off as quickly. Also, if you can pay more than the minimum balance on your upcoming loans it will help boost up your credit utilization ratio — a large factor making up your credit score. Ready? Now rip the bandaid and see where you stand financially. The main numbers you should look at are your 1. credit score and 2. debt-to-income ratio. Apps like Turbo gather all of your income, credit and loan details in a single account dashboard, so you know where you stand. Turbo also gives you personalized advice, based on your credit report and verified income, to help you improve your credit score, pay off debt sooner, and save money on interest. Step 3: Actually Commit to Said Realistic Plan Once you’ve made the steps to get in the clear, it can be so easy to full back into past mistakes. Taking control of your money means taking control of your life – and you can’t do either when you’re stuck in bad habits. Only you can break the pattern of spending and incurring debt once and for all. To start your journey towards a fuller life where money won’t hold you back, our best advice is to start (and stick to!) a realistic budget. Keep track of the amount you pay for all of your bills, and set a budget for how much you can spend on personal necessities after like groceries, attire, and fitness. Once you have your disposable income for the month calculated, you’ll better be able to see how you can chip away at your debt. Try tracking your monthly expenses on apps like Mint. Finally, reward yourself with little wins! Paying off debt is an amazing accomplishment but it can take significant time. To stay motivated, you’ll need to let yourself soak up the milestones along the way. Small rewards here and there such as a massage or a weekend getaway are needed to help your money motivation and prevent the feeling of depravation from derailing your progress. You will see light at the end of the tunnel, just keep it up! 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