Skip to main content

Do You Know How Much Debt You Owe?

Last week, my 12-year old daughter asked me "Do you have debt, mommy?" She just asked me that question out of blue. Well, I found out later that it actually had something to do with her school lessons. At first, I answered her that we (my husband and I) don't have any debt. But on second thought, I told her that we do incur debt every time we swipe our credit card. But we totally pay for everything when the debt is due because we don't want to pay extra on interest.

I think that's the only debt we have. How about you? Do you know what you owe? Many people today tend to accumulate debt without thinking much about it. For some, it is plain irresponsibility. But it seems that a lot of people have become beset by this problem.

Consumers are becoming more trapped in debt than ever before. It's surprising that many do not realize how much debt they have. Each month, they see the credit card bills  coming and take notice only of the minimum payment required. They don't consider the finance charges and the total account balance. If they just pay the minimum each month, in just a short time, their total account balances will be way over their heads.

Whether you're able to manage your debt well or you struggle with it, it's vital that you know how much you owe to each and every creditor, and how much you owe all in all. If you just ignore the numbers, it would be quite dangerous.

If you have no clue how much you owe, it's difficult to think of a plan how to resolve your debt.

If you don't have a good estimate of your total debt, now is the perfect time to sit down and make a list of your debts. Consider the following when you do your debt inventory:

Do you have credit card debt?

List down the balance of each card's monthly statements. Just get your latest statements and add up the total balances. And while you're doing that, take note of your credit limit on each card. It's a good idea to start paying your balances and do not make charges to the credit card any more if you're really close to your credit limit.

Do you have any mortgage, car loan, or any other loans?

Maybe your creditor is not sending you the monthly statements for these debts. Call up your creditor and ask how much is your balance. You should not forget to pay the monthly dues on these loans especially for home and car loans with equity. If you don't pay, you could lose your equity, your car or your home.

Do you have unpaid medical bills?

I'm not sure how unpaid medical bills affect debtors in our country. But in other countries, non-payment shows up on the debtor's credit report. In some states, this may not be a big problem for obtaining credit, but the account is still there when creditors do a credit check. Still, you should list this debt in your inventory and consider paying it.

Do you have student loans?

It's good that student loans provide the opportunity for some people to afford education. But don't forget to pay back after finishing college. Interest charges on student loans is relatively low, but if it can also add up if you don't pay.

Do you have other debts that are not yet paid?

Now this is the tricky part. There are times that you borrow money from family and friends. Usually, they don't charge any interest but it doesn't mean that you should take them for granted and not pay. If you can't pay right away, it's your responsibility to let them know. The good-hearted lenders would understand. Try to pay little by little, it would be very much appreciated because it shows your gratitude and sincerity in paying what you owe.

The problem is if you borrow from high interest loans like 5-6 loans, title loans or pawnshop loans. If you don't pay, the debt adds up quickly and you will end up losing your collateral. As much as possible, stay away from these types of loans.

Once you have listed and summed up how much you owe, you'll most likely be more determined to get it all paid. The next move is to look at your spending habits and find ways to cut back on expenses. If you eliminate excess spending, you can save money for getting rid of your debt. Hopefully, you could be free from of it much sooner. You will surely love the wonderful feeling of knowing that you don't owe anything.

So, do you know how much debt you owe? What are you doing to manage it?


Scott Gombar said…
Trying to get better at understanding the debt I do have. This is helpful
Mary said…
There are many ways that debt can add up. Yes, it's best to figure out all of your debts in order to mange it. This will help so many!
Mom Knows Best said…
I just have house debt that I am trying to pay off. It feels good to almost be debt free
Unknown said…
I know how much debt I owe. I have a mortgage and a car loan. No student loans, credit card debts, or anything else thankfully. It can add up easily, so I pay close attention to paying off credit cards within a month to avoid the interest. I try to follow Dave Ramsey's method.
Suzanne Melton said…
My partner takes care of our finances, so I am unsure of our personal debt. I know they are doing a great job handling it though - I just hate thinking about it!
Yeah Lifestyle said…
It is so important to know much debt you owe, to ensure you are on track with your finances. It can be so easy and quick to spiral out of control if you don't know where you stand.
Unknown said…
It's very important to understand and know how much you owe. I find this very helpful, thanks.
Claire said…
I actually do not have any debt at the moment but I'm pretty sure it's really important considering you have to keep paying the bills
Princess Quinn said…
I do have some credit card debt. I just bought a laptop and chose it to be on installment. But before buying anything, I make sure that I have enough to pay when the due time comes.
Every month i paid my cards in full to avoid accumulated interests. And i've grown to the idea of "i-dont-have-money" attitude so i wont spend easily.
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog, I will keep visiting this blog very often. Home Loans
Edwin Joy said…
It's important to know that how much debt you owe. And making a list of all will make the determination more powerful. Now-days you can buy whatever you want on debt. That's it is important to remember rather than neglect. Pawn & More

Popular posts from this blog

Which Brand of Electric Fan Do You Recommend?

It’s really hot now and it’s so untimely that one of our fans gave up on us. We only have 2 working. Actually, since we came here in the Philippines 2 years ago, we’ve already bought 6 fans and I’m not satisfied with how they worked for only a short time. We bought 2 Standard industrial stand fans, one broke in less than a year while the other one is still working. We bought 1 Union desk fan and this one lasted 2 years. Then, we bought 1 Dowell stand fan because of a sale but then it was defective within one month. We brought it to their service center, they got it fixed but then the entire head (with the fan blade) of the fan flew off (nasira ang hinang).

What's the Best Shampoo For Getting Rid of Head Lice?

When my family was staying in the Middle East, my daughters had no problems with head lice or “kuto.” A head louse (lice, plural) is a six-legged parasite that feeds on blood in the human head. Lice do not jump or fly, but crawl only. They do not carry any disease, but they suck blood and cause itchiness. Here’s a photo showing the life cycle of head lice. The life cycle of head lice. Image taken from When we came back to the Philipines , I was taken by surprise one day when I saw my daughters

Sisa Monologue Script in English

Last second quarter, my Grade 8 daughter's English class teacher asked them to present a Monologue in class. The teacher asked the students to choose a character on whom they want to base their monologue. My daughter chose Sisa of Noli Me Tangere. The problem is that most of the Sisa monologue Script that can be found on the internet are in Filipino or Tagalog. You can't find one in English. Well, there's one but it was very, very short, just one paragraph, I think. And so, we had no choice but to make a Sisa monologue script in English. It's not required for the students to make their own script and so I helped my daughter produce one. I just looked up a good Sisa script in Tagalog online and translated it. Thank God for Google Translate as it helped me do 50% of the work. The Google translation was not 100% accurate, so I still had to edit it. Here's the final script (515 words), which I want to share with you (and other people looking for Sisa monologue