What Should I Do If I’m Worried About My Debt but Don’t Know Where to Start?

Feeling anxious about debt is one of the most common financial struggles people face — and one of the hardest to talk about. Whether you’re juggling credit card balances, student loans, or unexpected bills, debt can make you feel trapped or ashamed. But here’s the truth: you’re not alone, and there is a way forward.

Taking control of your debt doesn’t mean you have to fix everything overnight. It starts with small, clear steps that help you understand where you are, make a plan, and move toward financial stability. Below, we’ll walk through a simple, step-by-step guide to help you regain control — and peace of mind.

Step 1: Face the Situation — Evaluate How Much You Owe

The first and most important step is to face your debt head-on. It’s tempting to avoid looking at your balances or bills because they cause stress, but you can’t make a plan without knowing the full picture.

Start by gathering all your financial information:

• Credit card statements

• Loan balances (student loans, car loans, personal loans, etc.)

• Mortgage information

• Overdrafts or unpaid utility bills

• Any money borrowed from family or friends

Make a list that includes:

• The name of each creditor (who you owe)

• The total balance

• The minimum monthly payment

• The interest rate

You can organize this in a spreadsheet or even a notebook — whatever feels most manageable.

Once you see everything in one place, you’ll have a clearer sense of how much you owe and where the biggest challenges lie. Many people find that simply writing it down relieves some of the anxiety, because it turns an unknown fear into something concrete and manageable.

Step 2: Understand Who You Owe and What Type of Debt You Have

Not all debts are the same, and understanding the type of debt you have will help you prioritize what to pay off first.

Here’s a quick breakdown:

• Secured debts are tied to an asset (like a mortgage or car loan). If you don’t make payments, the lender can take the asset.

• Unsecured debts include credit cards, personal loans, and medical bills. These don’t have collateral, but they often carry higher interest rates.

• High-interest debts (like credit cards or payday loans) grow quickly if left unpaid.

• Low-interest or fixed-term debts (like student loans or mortgages) are usually more manageable but can still add up.

Once you categorize your debts, you can begin to see where your money is being stretched thin — and where you might focus your repayment efforts.

Step 3: Review Your Income and Expenses

Before deciding how to tackle your debt, you need to know how much money you realistically have available to pay it down.

Start by reviewing your income:

• Your regular salary or wages

• Any side income, freelance work, or benefits

Then, review your expenses:

• Rent or mortgage

• Utilities

• Food and household items

• Transportation

• Insurance

• Subscriptions or memberships

• Entertainment and discretionary spending

A simple way to organize this is to divide your expenses into essentials (needs) and non-essentials (wants).

When you subtract your total expenses from your income, you’ll see how much money you have left each month. This remaining amount — even if it’s small — is what you can begin to use to pay off debt or build a financial cushion.

If you find that you’re spending more than you earn, don’t panic. This just shows that it’s time to make adjustments — and there are plenty of ways to do that, from budgeting apps to free debt counseling.

Step 4: Make a Simple, Realistic Budget

A budget doesn’t have to be complicated or restrictive — it’s simply a plan for how to use your money.

You might try one of these common budgeting methods:

• The 50/30/20 rule: 50% of income for needs, 30% for wants, 20% for savings or debt repayment.

• Zero-based budgeting: Every dollar is assigned a purpose (e.g., rent, groceries, debt payments, savings) so that your income minus expenses equals zero.

• Envelope or category budgeting: Set spending limits for specific categories and track your spending manually or with an app.

The key is to create a plan that helps you consistently make payments on your debt while still covering your essentials.

Even small adjustments — like reducing dining out, canceling unused subscriptions, or negotiating bills — can free up money that adds up over time.

Step 5: Choose a Debt Repayment Strategy

Once you know how much you can afford to pay, it’s time to choose a repayment strategy that suits your situation. Two of the most popular approaches are the debt snowball and the debt avalanche.

1. The Debt Snowball Method:

• Focus on paying off your smallest debt first while making minimum payments on others.

• Once that debt is paid, roll that payment into the next smallest debt.

• This method gives quick emotional wins and momentum.

2. The Debt Avalanche Method:

• Focus on the debt with the highest interest rate first.

• Once it’s paid off, move to the next highest.

• This saves more money over time because you reduce interest costs faster.

Both methods work — what matters most is consistency. Choose the one that feels most motivating and sustainable for you.

Step 6: Contact Your Creditors or Lenders

If you’re struggling to make payments, don’t ignore your creditors. Many people avoid reaching out because they’re embarrassed or afraid, but most lenders prefer to work with you before things get worse.

Here’s what you can ask about:

• Lowering your interest rate

• Extending your repayment term to reduce monthly payments

• Setting up a temporary payment plan if you’re facing financial hardship

• Freezing interest or charges in certain cases

Document any agreements in writing, and always confirm the details. These conversations can make a surprising difference — sometimes, all it takes is a phone call to create breathing room.

Step 7: Seek Professional or Free Advice

If you feel stuck or overwhelmed, there’s no shame in asking for help. In fact, getting advice early can prevent the problem from growing.

Look for credible, non-profit, or government-backed organizations that offer free debt advice. Examples include:

• In the UK: Citizens Advice, StepChange, or National Debtline

• In the US: The National Foundation for Credit Counseling (NFCC) or local community financial centers

• In Canada: Credit Counselling Canada

• In Australia: The National Debt Helpline

A qualified debt adviser can help you:

• Review your finances

• Negotiate with creditors

• Set up debt management plans

• Understand your legal rights

• Explore options like consolidation, repayment plans, or — as a last resort — bankruptcy

The key is to avoid for-profit debt relief companies that charge high fees or make unrealistic promises. Always check that any service is registered, accredited, or government-endorsed.

Step 8: Don’t Ignore the Problem

Debt doesn’t disappear by being ignored — it grows. Missed payments can lead to late fees, higher interest, and damage to your credit score, which can make future borrowing harder and more expensive.

If you find yourself avoiding letters, calls, or bills, take that as a signal to reach out for help. Even if you can’t pay the full amount, making some contact or partial payment shows that you’re taking responsibility, which creditors respect.

Remember, there’s always a solution — but it starts with acknowledging the issue rather than hiding from it.

Step 9: Protect Your Mental Health

Debt and mental health are closely linked. The constant pressure of owing money can lead to anxiety, depression, or even physical symptoms like insomnia and fatigue.

Here are a few ways to protect your mental well-being while managing debt:

• Talk about it: Confide in someone you trust or join a support group. You don’t have to face it alone.

• Set boundaries: Limit how often you check your balances or deal with financial tasks. Schedule it once a week to reduce daily stress.

• Celebrate small wins: Every payment, no matter how small, is progress.

• Seek professional help: If your debt is affecting your mental health, reach out to a therapist or counselor familiar with financial stress.

Remember: financial recovery is not just about numbers — it’s about rebuilding confidence and peace of mind.

Step 10: Build Better Habits for the Future

Once you’ve begun to stabilize your situation, think about how to prevent future debt problems. This isn’t about being perfect; it’s about being prepared.

Consider these habits:

• Build an emergency fund. Even saving a small amount regularly (like $10 or $20 a week) helps prevent future borrowing.

• Use credit wisely. Keep balances low and pay them off monthly if possible.

• Plan for big expenses. Set aside money for annual bills, holidays, or repairs so they don’t catch you off guard.

• Keep learning. Financial literacy resources, podcasts, or workshops can help you stay informed and confident.

It’s not about never using credit again — it’s about using it intentionally, with a clear understanding of how it affects your long-term financial health.

Step 11: Be Patient With Yourself

Debt repayment is often a marathon, not a sprint. It can take time, discipline, and emotional resilience. You may face setbacks — unexpected expenses, income changes, or moments of frustration. That’s normal.

What matters most is that you keep going, even when progress feels slow. Every step you take — from opening your bills to making that first payment — is a sign of courage and control.

Final Thoughts: You’re Taking the First Step Already

If you’re reading this because you’re worried about your debt and don’t know where to start, you’ve already done something important: you’ve acknowledged the problem and started looking for a solution. That’s the hardest part for many people.

Debt can happen to anyone — and it doesn’t define you. With a clear plan, reliable advice, and a bit of patience, you can take control of your finances and your future.

The journey starts small:

• Know what you owe.

• Understand your options.

• Make a plan you can stick to.

• Ask for help when you need it.

You may not be debt-free tomorrow, but you can be less anxious today — and that’s progress worth celebrating.