Whether you’ve accumulated debt through school loans or credit card spending (or both), it can hang over your head and seem like an ever-present storm cloud ready to rain. Sometimes debt is necessary – like paying for your education or investing in a home for you and/or your family – but it doesn’t have to be scary and it is manageable. Obviously, the less debt you have, the better you will feel and the better your finances will be. However, it may be difficult to know where to begin or how you can even afford to pay off your debts when you have other obligations and expenses constantly eating away at your funds.

We keep coming back to this, but you really need to know your household expenses and income (make a budget!). You’ll need to start segmenting a portion of your income to pay off your loans; being able to view your budget will help you gauge where changes can be made. Also, this should go without saying, but don’t add any new debt! For example, while you can’t really help adding school loans each year, consider waiting on buying that car and look into other transportation options until your student loans are paid. Some choose to remove the credit cards from their wallet to resist the urge to spend. Do whatever you need to do to keep your debt in check.

Dave Ramsey is famous for his financial advice and his method of a debt snowball has proved immensely helpful for many (most links on Pinterest contain this method). If you’d like to read more posts on the debt snowball method, click the Resources tab.

The idea is pretty simple, pay off your debts from smallest to largest, letting the momentum build from one to the next. Once you’ve mapped out all of your debts (total amount, interest rates, and monthly minimums), order them from smallest to largest total amount due. While you continue to pay the minimums on all the rest of your debts, focus your energy on paying off the smallest debt first (allocate all of your excess funds to paying off this debt – either whatever is left over from your paycheck or by working another job). Once this first debt is paid, move on to the next debt on your list by rolling the money that would have been used on the first debt into paying off the second (here’s where the snowball idea comes from). If you’re more concerned with interest rate, you can try the snow avalanche method, meaning you start with the debt that has the highest interest rate and work your way to the lowest interest rate. Determine whether the steady gain of the snowball method will keep you most engaged or knocking out a high interest loan will give you the kick to keep going.

Rejoice in the small victories as you work toward your goal!

Have you heard about Transformational Leadership Debt Assistance (TLDA) or Season of Service Loan Assistance Program (SSLAP) from PC(USA)? Check out the links below to learn more about how you could receive forgivable loans to decrease that seminary debt.

For PC(USA) Pastors
For Other PC(USA) Organization Workers

If you want to learn more about your options to repay student loans, download the PDF here.

Need ideas for ways to make some extra cash? Check out Financing Seminary or Resources.