Tackling debt is an important step in pursuing your biggest money goals. The type of debt I’m referring to here is that which holds a high interest rate. Or what us investment professionals also refer to as bad debt.

High can vary depending on the type of debt but I would generally associate it with double digit interest—so let’s say over 10%. If you have a credit card that carries a high interest rate but you pay it off in full each month that’s great, and can assist in building your credit score. What I’m specifically referring to here is when you splurge on the designer bag opting to pay for it . . . eventually. And then proceed to pay 18% interest while the unpaid balance sits on your card. And although compound interest is a wonderful phenomenon when it’s working for you, the opposite is true when it’s working against you. Compound interest on debt can add months or even years to paying off your purchases.

High interest debt limits your options, it can delay you from buying a home, going on a dream vacation, and achieving financial freedom. 

My advice for getting out of debt starts with awareness. You first have to take an inventory of all debts to get a clear picture of where you stand. Don’t treat this as an opportunity to shame or guilt yourself, it is simply an awareness exercise. Use a method that works for you, whether it be in a notebook or on a spreadsheet, list all your debts as well as the interest rate of each.

Next you will want to create a plan of action for tackling your debt, make sure it’s specific, measurable and realistic. For instance if it’s a $10,000 credit card balance and you want to pay it off in a month but you don’t earn that level of monthly income then that isn’t a realistic plan of action.

If you are trying to figure out which to pay first there are different approaches to consider. One way could be starting with the smallest one and once its paid off you can revert all your resources to the next. I personally recommend working toward paying off the one with the highest interest rate first as the higher the number the more interest you are paying. But you will still want to be making the minimum payment to each as missing a payment will impact your credit score.

It is imperative to be kind to yourself along the way, and celebrate your successes. It takes discipline to create a strategy to pay off your debt and stick to it, so you deserve some high fives along the way.

But planning and taking action are only part of the work when it comes to debt. There is some deeper work to consider for those that feel like they are in a constant cycle of debt that they cannot get out of. The inner work consists of digging deeper into your beliefs about money to understand their origins and to let go of the ones that are not serving you.

I was raised by a single mom and money showed up as a source of stress and struggle in my childhood. The beliefs that I learned early on about money were based in scarcity and lack. What were the early money experiences and messages about money that you can recall from your early years? And are those influencing your current reality with your finances? Many people I come across say things like “I’m bad with money” – and guess what, the reality they create in their financial life reflects just that. If you feel like debt has been an ongoing struggle in your life and you have never been able to get a handle on it then it will serve you well to dig deeper to find out where that is coming from. Once you realize that many of the messages and beliefs were not ones of your choosing you can take your power back. And positive affirmations can help you program in your new beliefs. Here are a few ideas for positive affirmations that you can repeat regularly to get out of debt:

• I am committed to eliminating debt from my life
• I always have plenty of money left at the end of each month
• My wealth is constantly increasing

Remember you get to consciously choose what you want to believe about money going forward!