Listing every debt you owe: the first step

Resources · Debt basics · 4 min read Starting out

Key points

• You can’t plan around debts you can’t see. So you list your debts first.
• For each debt, note the balance, the interest rate, the minimum payment and the due date.
• Working out each debt’s monthly interest in dollars shows you where your money goes.
• The list is a snapshot, not a verdict. It’s information, nothing more.

Why it helps to list your debts

Debt is easy not to look at. Statements turn up at different times, in different places, behind different log-ins. Plenty of people honestly don’t know their total.

One list changes that. It turns a vague, nagging worry into numbers you can actually work with. And for many people, the not-knowing turns out to be worse than the numbers.

You don’t need to do anything with the list yet. Making it is the whole first step.

What counts as a debt

Include anything you owe and are paying back over time. Depending on where you live and how you borrow, that could be:

• credit cards and store cards
• personal loans, car loans or car finance
• student loans
• buy now, pay later plans
• overdrafts
• a phone or furniture plan
• a home loan or mortgage, if you have one
• money owed to family or friends
• unpaid bills, tax or fines on a payment arrangement

Some people leave the home loan off because it runs on a much longer timescale. That’s fine either way. Just decide on purpose.

What to record for each debt

For each one, write down:

• Name. Whatever helps you recognise it (“Blue card”, “Car loan”).
• Balance. What you owe today, from your latest statement or online account.
• Interest rate (APR). Note any promotional rate and when it ends.
• Minimum or set payment. What you have to pay each month.
• Due date. The day each month the payment is due.
• Type. Secured (tied to something like a car or home) or unsecured.

Can’t find a figure? Leave a gap and come back to it. A list with a few blanks beats no list by a mile.

A worked example

Here’s a sample list with round, believable numbers. Monthly interest is estimated as balance × (APR ÷ 12). Many cards and loans work interest out daily instead, which gives a similar figure. The same maths works in any currency.

Lay it out like this and things jump out. The total interest is $176.47 a month, and that money leaves before a single balance comes down. The store card is the smallest debt, yet it carries the highest rate. The car loan has the lowest rate, but because the balance is so large, it costs about the same each month as Card A.

None of that tells you what to do next. It gives you something to think about. Different payoff orders put different debts first, and which one suits you depends on what matters most to you.

Keeping the list up to date

Your list is a snapshot, and balances move every month. Some people update theirs on the same day each month. Others do it whenever a statement lands. Either works.

Keep it in one place, whether that’s a notebook, a spreadsheet or a notes app. Use the figures from your statements, not your memory, because the balance in your head is usually out of date. If a promotional rate ends or a new debt turns up, write it down.

And watch the total. Seeing that one number shrink over time is surprisingly good for morale.

If the list feels heavy

Seeing everything in one place can be confronting. That’s normal. It isn’t a judgement on you. Lots of people carry debt, for lots of reasons.

If your list shows repayments that are more than you can manage, free debt help is available, and it’s confidential.

Common questions

What should you include when you list your debts?

Anything you’re paying back over time, such as cards, loans, buy now, pay later plans, overdrafts and money owed to family. For each one, note the balance, rate, minimum payment, due date and type.

How do you work out the monthly interest on each debt?

Multiply the balance by the APR divided by 12. So $4,000 at 12% works out to $40.00 a month.

Should a home loan go on your debt list?

Some people leave it off because it runs on a different timescale. Others put it on. Either is reasonable, as long as you decide on purpose.

Try it

Once your list is ready, put it into the free tool to find your Freedom Date, the month you could be debt-free on your current payments.

General information only, not financial advice. Your situation is your own.