So Baby Step 2 of Dave Ramsey's "Get out of debt" plan is to list your debts, smallest to largest, except for your mortgage. And then you attack the smallest debt to pay it off. Then you attack the next one. And the next one. And the next one...until they are GONE! People call all the time and argue that you should pay off the debt with the highest interest rate but the idea is that you feel accomplishment when you pay off one debt and it makes you want to keep going and going and going... it's about behavior, not math. Which the school psychologist in me loves.
When we started the program, we had 7 student loans (yup, one for each year I was in school) and 2 car loans. We were able to knock out that first car loan really quickly because we were only 2 payments away from paying it off in the first place. Now 2 years later, we have 5 student loans left. In a month, it will be FOUR! And trust me, it does feel really good to pay one off, even if it's just a little one and it's got friends four time the size behind it.
I think just listing out our debts was the biggest eye opener. I knew I had student loans but we were making the monthly payments and it was all good...until I realized we'd be making those monthly payments for the next 10 years... and then I got the paperwork on how much I paid in interest for a year. Those things together really made me want to kick that debt out of my life forever... and I'm on my way.
So just take one small baby step to this baby step and think about your debts..write them down.. and go from there :)
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