Struggling With Debt? Here Are the First Steps to Take — in Order

Wealth
Written By Dr. Tracy Verrico

Debt is one of the most common financial experiences in adult life, and one of the most isolating. The shame that surrounds it — the sense that carrying debt is a moral failure rather than a predictable consequence of medical emergencies, job loss, the gap between stagnant wages and rising costs, or simply a period of life that demanded more than savings could cover — keeps women from seeking information, asking for help, and taking the first practical steps that actually work.

I want to name that clearly before offering anything else: being in debt, including serious debt that feels overwhelming, is not a character flaw. It is a financial situation. And financial situations, however difficult, respond to deliberate and informed action. What follows is the sequence of steps I would walk through with any woman facing debt — not a lecture, but a practical guide.

Debt is one of the most common financial experiences in adult life, and one of the most isolating.

Step 1: Get the Full Picture Before You Do Anything Else

The most common mistake people make when debt becomes overwhelming is taking immediate, reactive action — making a call to a creditor, consolidating accounts, or stopping payments — without first having a complete picture of what they are dealing with.

Before any of that, you need a full accounting of every debt you carry. Write down each one: the creditor, the current balance, the interest rate, and the minimum monthly payment. Pull your credit reports from all three bureaus — Equifax, Experian, and TransUnion — through AnnualCreditReport.com, which is the federally mandated free access portal, to verify you have not missed any accounts, and to identify anything that may be in collections that you were not tracking.

This exercise is uncomfortable. It is also essential. Decisions made without a complete picture are rarely good ones, and the anxiety of the unknown is almost always worse than the reality on paper.

Step 2: Stabilize Your Minimum Payments

Before you can address debt strategically, you need to stop the bleeding. Missing minimum payments triggers late fees, damages your credit score, and in some cases can accelerate the timeline for a creditor to take collection action. Your immediate priority is ensuring that every account receives at least its minimum payment every month.

If your current cash flow does not cover all minimums — meaning your monthly obligations exceed your income — that is a different category of problem that may require speaking directly with creditors about hardship programs, or consulting a nonprofit credit counselor (more on that in a moment). But for most people, it is worth going through all non-essential spending first, because the money to cover minimums is often present but currently allocated elsewhere.

Set up autopay for minimums on every account. This removes the risk of an accidental missed payment during a period when you have other things demanding your attention.

Step 3: Build a Bare-Bones Budget to Free Up Cash

Debt repayment requires cash flow — money that, right now, is going somewhere else. The goal at this stage is not to create a perfect budget for the rest of your life. It is to identify what you can realistically redirect toward debt in the immediate term.

Go through your last two to three months of bank and credit card statements and categorize your spending. Not to judge it, but to see it clearly. Most people find categories where spending has drifted significantly from what they would have estimated — subscription services that auto-renew, dining and convenience spending that accumulates invisibly, recurring charges for things no longer actively used.

Identify the amounts you can realistically reduce without making your day-to-day life unsustainable. Unsustainable cuts lead to abandonment. Sustainable reductions, sustained over time, produce real results.

Step 4: Choose a Repayment Strategy — and Actually Apply Extra Cash

Once you have freed up even modest additional cash, the most impactful thing you can do with it is apply it strategically to debt reduction rather than absorbing it back into general spending.

Two approaches dominate personal finance guidance on debt repayment, and both work — the choice between them is as much about your psychology as your math.

The Avalanche Method directs every extra dollar toward the debt with the highest interest rate first, while making minimums on everything else. Once the highest-rate debt is paid off, you roll that payment to the next highest rate. This approach saves the most money in interest over time and is mathematically optimal.

The Snowball Method directs extra cash toward the smallest balance first, regardless of interest rate. Each paid-off account produces a psychological win that sustains motivation. Research into financial behavior suggests that many people follow through more consistently with the snowball method, making it practically superior even if not theoretically optimal. Know yourself and choose the approach you will actually sustain.

Step 5: Explore Whether Your Interest Rates Are Negotiable

This step is underused and straightforward: call your credit card companies and ask for a lower interest rate. This works more often than people expect, particularly for customers with a history of on-time payments. A simple call explaining that you are working to pay down your balance and would like to discuss your rate takes less than fifteen minutes and carries no downside.

If you have multiple credit card balances at high interest rates and good credit, a balance transfer to a card offering a 0% introductory APR period is worth evaluating — provided you are disciplined about paying down the balance during the promotional period, since the rate typically reverts to a high standard APR afterward.

Personal loan consolidation at a lower rate than your current credit card rates is another option that can reduce your effective interest burden, though it requires qualifying based on your credit profile.

Step 6: Know When to Ask for Help — and Who to Ask

If your debt feels genuinely unmanageable — if you are behind on payments, fielding calls from collectors, or unable to see any realistic path forward with your current income — there are legitimate, free or low-cost resources designed for exactly this situation.

Nonprofit credit counseling agencies — including those affiliated with the National Foundation for Credit Counseling — offer free or low-fee financial counseling and can help you create a structured debt management plan. They negotiate with creditors on your behalf to reduce interest rates and create a consolidated monthly payment. Be cautious about for-profit debt settlement companies, which charge high fees and can damage your credit significantly.

If your debt includes federal student loans, the income-driven repayment and loan forgiveness programs available through the Department of Education are worth reviewing carefully. These programs are regularly updated, and eligibility rules matter.

If you are considering bankruptcy, consult a qualified bankruptcy attorney before making any decisions. Bankruptcy has significant long-term credit consequences, but for certain situations — particularly overwhelming medical debt or debt with no realistic repayment path — it is a legitimate legal tool, not a moral failure. An attorney can help you understand whether Chapter 7 or Chapter 13 is appropriate, and what the realistic timeline and consequences look like.

Step 7: Protect the Habits That Will Keep You Out of Debt Long-Term

Debt is easier to return to than to leave. Once you have made progress, the structural habits that protect against re-accumulation matter as much as the repayment work itself.

Build an emergency fund — even a small one — before your debt is fully paid off. The absence of any financial buffer is one of the primary reasons people return to credit card debt after making progress: an unexpected expense has nowhere else to go. Even $500 to $1,000 set aside and protected changes the calculus significantly.

Understand your spending triggers. For many people, emotional spending — spending driven by stress, fatigue, social comparison, or boredom — is the mechanism through which spending creep returns. Naming the pattern does not eliminate it, but it makes it easier to interrupt.

And treat your financial picture as an ongoing practice, not a project with an end date. A monthly review of your spending, savings, and debt balances — even brief — maintains the awareness that allows course correction before a small drift becomes a significant one.

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Financial Disclaimer: The information contained in this blog is provided for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. The content should not be relied upon as a basis for making any financial decisions. Before making any financial decisions, you should consult with a qualified financial advisor, accountant, or attorney who can assess your individual circumstances. The author(s) and publisher of this newsletter are not licensed financial advisors and accept no liability for any loss or damage arising from reliance on the information provided.

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Dr. Tracy Verrico

Hi, I’m Dr. Tracy Verrico, board-certified OB-GYN, hormonal health expert, wealth educator, and speaker. I empower women to live their healthiest and wealthiest life.

https://www.drtracyverrico.com/
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