Massive Debt - Where Do I Start?

Massive Debt – Where Do I Start?

I have massive debt, yes I do. I have massive debt, how ‘bout you?

Why not start out with a sports cheer that I recall from the movie Hoosiers? I don’t know where else to start on my journey towards tackling my massive debt. An obscure movie reference seems about as good a place to start as any. Plus those corny sports cheers from the 1950s make me laugh.

The Journey

I stand at the start line. The beginning of a journey. Unlike most of my journeys, I have no idea where this one is heading. Normally I know where I’m going, how I’ll get there, and why. In this case, though, all I know to start is the “why.”

I’m on a journey to reduce my debt. I’m doing it because I want financial independence. I don’t know what that means exactly as I stand at the start line, but I know I want to retire one day.

Most of the debt is credit cards, what I view as self-induced debt. Well it’s all self-induced, but the credit card debt didn’t appear overnight and it didn’t build up from buying too much at stores. No, this debt built up over time from a series of decisions. I’ll catalog where it all came from at a later time. For now, let’s focus on the journey and the first step.

The journey will be a long one, heading towards financial independence. First, I want to rid myself of crippling debt. Second, I want to become cash flow positive. And finally, I want to become an investing superstar. I’m shooting for the stars here. No time for a check swing (baseball reference).

As they say, every journey begins with the first step. Join me on this journey. First, I will tell you what we are dealing with, the mountain of debt I’m staring at, and then I’ll describe the first step.

What is Massive?

I do have a massive pile of debt on the books. But what do I consider to be “massive?” Let’s start out defining that, by sharing some big numbers. Numbers are always relative, which means what is a big number to me might be small to someone else. So this is massive debt to me.


Here goes.

Current debt on the books is about $95,000 in non-mortgage debt. Here’s the breakdown:

Credit Cards – about $81,000
Car Loan – about $14,000
Mortgage – about $225,000

The credit card amount is massive…MASSIVE! That’s the only word that came to mind when I saw the big number after totaling up all of our balances. First I fell over. Then after the team trainer cleared me of any concussion symptoms, I went back out on the field.

The car loan is just insult to my debt injury, at this point. We have two cars. We paid off one car a few months ago, paying back a 5-year loan. Thankfully we are back to one car payment and not two. At least we have that.

We own a home, so there is a mortgage that counts as debt, but I’m not sure whether we want to attack that one or not. Either way, we have a mortgage and it’s debt. I’ll address that one down the road.

Where to Start?

I won’t lie, there was a lot of cursing and stiff drinks involved once I realized the enormity of my debt problem. My wife and I argued and stopped talking for a while. It wasn’t a pretty sight.

But that’s life. My philosophy is that there is no reason to dwell on the past, because you can’t change it. The past can only inform your present. Hand wringing gets you nowhere. So that means I’m not going to beat myself up over how we got into this mess. Not for too long, anyway. I’d rather put my efforts into getting out of this mess.

In my mind, massive debt calls for massive action. I’m not good at small changes. I make wholesale changes and go big, wherever I can. That’s where this blog comes from, big change. That’s where my first step on the journey comes from, big change.

The first step towards tackling this massive debt was to create a budget. That may sound small and simple to many people, but I’ve never had a budget. We always assumed we were living within our means, but we never ran the numbers and checked. Well, now is the time to check. Gut check time.

Budget Time

I ran a budget…calculated income vs. expenses, calculated our total credit card debt, had a major cursing infused panic attack, checked myself for concussion symptoms, and got to work. I’ve been obsessing over the numbers ever since I put them all into a spreadsheet, but that’s how I learn, by obsessing. I want to know our budget situation like the back of my hand, so I know what financial levers to pull in order to improve.

From that budget, I then dove into debt payment strategies. I’ll talk about those in another post. The snowball strategy, the avalanche strategy, and debt consolidation all came into play. But most importantly, I know what my finances really are after completing the budget.

The result of the budget showed that we are actually cash flow positive every month. Not by much, but I saw a positive number after comparing income and expenses. That was a sigh of relief. At least we have that going for us. Now, we just need to increase that cash flow number.

The Start Line

Quick recap here:

• I stand at the starting line of a long journey. I’m going to tackle my massive debt.
• Step one was to recognize the massive debt. I added up all of my credit card balances and other debts.
• Next, I ran a budget to determine our current financial situation. We are actually cash flow positive right now. Barely.
• Next up, I need a plan to begin tackling the debt.

I am all about massive change once I recognize a deficiency. This blog is the start of the massive change. Much more to come.

I plan to run a monthly report, showing the results of my efforts. Stand by for the first report. Thanks for reading.

Leave a comment and tell me about your debt story.

Follow me on Twitter to see where this journey takes me.

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