Often times, military life is synonymous with stress. It involves committing to work with a fervor and dedication most jobs don’t require, while simultaneously juggling personal responsibilities when time is in short supply.

Shouldering a heavy debt load can add to the pressure – especially when you aren’t entirely sure of the best way to tackle it.  If this sounds like the situation you are in, here are a few steps to get you back on your feet so you can concentrate on the job at hand.

Get a firm grasp on your debt

Finding a solution to the problem is virtually impossible if you don’t know the full scope of the problem to begin with. Many people avoid taking a good, hard look at their debt because they are afraid of seeing the numbers in black and white – but this is the only way to move forward.

So start by creating a list of each of your creditors, amounts owed and the monthly minimum payments, the interest rates, and the loan length (if applicable).  Organize the list in order of interest rate – largest to smallest.

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Take a look at your bills and discretionary spending

Do you really know where your money is going every month? Creating a plan for your debt starts with knowing how much money you have to put towards it every month. Write out your bills, starting with your non-negotiables or necessities. Next, write out the bills that could be cut or pared down if need be – things like cable and subscription services.

Finally, write out what your monthly discretionary spending looks like – eating out, entertainment, etc.  Take a look back at past bank or credit card statements to ensure this number is accurate – we often underestimate this spending by a significant margin, making it impossible to really understand where our money is going.

Find ways to stop the bleeding

Debt management can be an issue for anyone, but has additional considerations for military personnel. Here Brad provides six tips for dealing with debt.

It’s impossible to get results from the same old habits you’ve stuck to for so long. If, for instance, you’re struggling with credit card debt, continuing to charge everything to your card will only ensure that the interest charges and various other fees will continue to compound and keep you locked in debt for even longer.

Or, if you’re constantly finding yourself in the hole every month, spending the same amount on bills and discretionary expenses will only ensure you keep digging deeper and deeper into the red. So now is the time to find ways to stop the bleeding.  Stop using plastic, cut or lower expenses that aren’t necessities.

Consider everything on the chopping block and go through each line item until your financial situation no longer looks like a ticking time bomb.

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Create a plan

Handling debt and properly managing your finances is significantly less intimidating and stress-inducing once you have a plan.  This includes creating a budget (yes, the dreaded “b” word) and a debt repayment plan.  Remember the list you made with all of your debts?

In order to give yourself the most breathing room in your budget, tackle your debt with the highest interest rate first, while still paying at least the minimum payment on the rest of your debts.  Once that debt is gone, throw that extra money at the debt with the second-highest interest rate, and so on.

Now, when it comes to establishing a budget, there’s one key that trumps all others: track your spending.  Understand where your money is going – every single dollar – so you can start to adjust bad habits and make changes down the road.  Once you know where your money is going, where it should be going, and how to pay down debt faster, finances won’t seem quite so scary.

Keep your credit score in check

You credit score is currency when it comes to everything from buying a house to purchasing your dream car, so you need to protect it.  This means staying up to date on all debt payments (or any bill payment for that matter), ensuring you aren’t carrying a balance of more than 30 percent of your available credit, and regularly checking your credit report.

You also might consider freezing your credit while deployed so you aren’t the victim of identity theft while away.  You are entitled to one free credit report annually from each of the three credit reporting agencies: Experian, TransUnion, and Equifax. Take advantage of it!

Find help geared towards military members

If you’re still feeling lost or you aren’t sure you can tackle your debt or other financial issues on your own, there are plenty of resources to make it a little easier. The San Diego Financial Literacy Center has knowledgeable counselors that can help you create a plan and get back to thinking about what really matters.

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This blog was previously posted on the San Diego Financial Literacy Center website at www.sdflc.org

Learn more about the SDFLC Boost for our Heroes Program.