Amazingly, some people have so much debt they have no idea how much they are actually paying in interest. Some have no desire to know. And when you consider the figures that is understandable.



But a true analysis of the problem is the first step to a solution. You could unknowingly be paying a good percentage of your monthly income to interest charges. Which basically means you will have absolutely nothing to show for that money. You may have the pleasure of enjoying the things you purchased. But could it have been better to wait a while and save for those items and not throw away a percentage of your income every month?

When you get to the point where the interest payments are all you can make you have hit a wall and will never pay your debt off. You are paying nothing toward principle, so you are spinning your wheels. Maybe you are not to that point, but consider where you are? How much are you paying toward interest and how much to the actual repayment of your debt?

In the case of your average mortgage, for many years about 90% of your monthly payment goes to interest. You can go on line and calculate how long that will take in your case to pay off.

For example, if you borrowed $10,000 and your interest rate was 7%. It would take 10 years to pay that off making payments of $116 per month. You will have paid close to 40% of the original amount of the loan in interest, almost $4,000.

Now that you've seen your situation, you need to take two further steps. Develop a budget that will allow you to make payments as large as you can handle to get the bills paid off. You could use the 'snowball method' and pay off the smallest one first. Then apply what you were paying to the smallest to the next smallest (now the smallest), until you've reached the end.

You could work the "snowball method"" in reverse, paying the highest debt first, and save a lot of money in interest. But that is hard to do because it takes a long time to see any results from your hard work.