Face Your Debt Demons One Step at a Time

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Economic uncertainty, pinched savings, job insecurity -- I hate to pile on, but there's one more ingredient in this bitter stew: credit card debt.

Spending a couple of hours assessing your high-interest debt and plotting a plan of attack is a financial "must-do" that rivals root canal surgery and attending a stranger's party alone in unpleasantness. 

However, there are worse things in life (I've spent a fair amount of time thinking about this, by the way): For instance, it's less painful than trying on bathing suits under the harsh glare of fluorescent lighting. At the Mall of America. The day after Thanksgiving. In a dressing room where the latch doesn't work.

Lining up all of your credit card bills to see where you stand sure seems a little less daunting now, doesn't it? At least this exercise has a happy ending: The euphoria you'll feel as you watch your debt dwindle each month will far exceed any high brought on by the most flattering bathing suit -- even one in your favorite color. And marked 50% off. That, I promise.

First things first
The first step to getting out of debt is to get it all down on paper. Write down everything that you owe -- to whom, how much, and at what interest rate. (Use our How-To Guide: Reduce Your Debt to help you keep track.) This may be the most startling list you'll ever make, but it's a necessary first step.

Once you've written it all down, it's time to plan your attack. You don't want to throw yourself at a mountain of bad debt without preparation. A scattershot approach will lead to frustration, or worse -- a slide back into old charging habits. That's why you need an actual get-out-of-debt plan to get the job done. (The links below offer an ordered and sane approach to this project.)

As you lay the foundation for your debt repayment plan, be mindful of your must-pay obligations (food, rent; NOT cable TV or daily happy hours). Job loss, a short-or long-term disability, a family illness, or a really, really bad haircut (I speak from experience) can throw off your plan. You don't want to trade a few bad debts for other bad debts.

Now, let's get busy and start paying it off:

Foolish personal-finance expert Dayana Yochim is the author of The Motley Fool's Guide to Couples & Cash. The Fool has a disclosure policy.

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