G.O.O.D. Tip #1: Get organized — write everything down

The first tip in my amateur getting-outta-debt series is simple:

1. Get organized — write everything down

Find a piece of paper and a pen. Make a list of all of your debts: credit cards, student loans, bank loans, car loans, mortgages, money you owe friends or family members or dealers, etc. (Just kidding about the dealers, but no judgments here.) Once you have a complete list, do some digging and figure out exactly how much you owe on each debt.

If you're like me, you won't know this off the top of your head — I was too afraid to look at the big, scary numbers — so pull up your online records, rescue your crumpled statements from the back of a cluttered drawer, call your parents and ask how much you owe them (I guarantee you they know!), whatever it takes.

When I took this first step in January, my list looked something like this:

• Credit card: $4,700
• Student loan: $2,800
• Mom: $1,200 (for those pesky minivan repairs)

Yikes. Looking back, I recall that once I had these figures, I did not add them up — and that's a good thing. These debts were overwhelming enough individually; having the grand total burned into my brain would have only made me feel more hopeless. For your own mental health, it's best to attack each debt one at a time.

Your plan of attack will start with a written budget. At first, I created a budget in Excel (which is how my mom manages hers), but I quickly grew tired of fiddling with cells and formulas. It didn't help that I use Excel all day at work; using it at home only made me feel like I was still at work. (Also, my laptop died around this time and I lost the budget template that I had created. Blast.)

It turns out that good ol' pen and paper worked just fine for my obsessive-compulsive mind. I like to be able to scribble my budget down quickly, cross things out, highlight things, staple receipts to the paper, etc. It works for me; you can do whatever the heck works for you.

First, list your monthly non-debt expenses. These should be essential, recurring expenses that are about the same every month. For example, mine were:

• Cell phone
• Car insurance
• Gasoline
• Medical (prescription)
• "Rent" (my mom charges me $65/month to offset her food and utility bills. Yup.)
• Groceries/toiletries (I buy some of my own food, too, just for kicks)

If you're not living with your parents, you'll also need to include:

• Rent or mortgage payment
• Utilities (water/sewer/garbage, electricity, gas, etc.)
• Cable/Internet
• Home phone (please cancel immediately — welcome to 2010)

And don't forget miscellaneous expenses:

• Other insurance (if not automatically taken out of your paycheck)
• Other transportation (bus pass, parking permit, etc.)
• Anything else that I'm not thinking of!

Once you have your list of recurring monthly payments, add 'em all up. Subtract your total monthly payments from your monthly income. The amount of money you have left over is the amount you could be using to pay off your debt.

However, I had another category in my budget that was quite essential to my getting-outta-debt success:

• Going out/having fun

We've all gone on diets. When you try to restrict yourself too much, you only end up binging on Reese's Peanut Butter Cups (my drug of choice) by the end of the third day. Then you feel like you've ruined your diet, and you give up completely. If you don't allow yourself to have some fun, you will probably fail.

I used this category as an "allowance" for myself. Each month, I gave myself a small amount of money to blow however I wanted. I was able to go to bars, go out to dinner, buy an inexpensive item of clothing here and there, whatever — but I only used the cash that I had allotted for that purpose, and once my cash was gone, I didn't spend any more.

You will probably be the designated driver for a while. Just sayin'.

This will also help eliminate mindless spending with your debit or credit card. That's what got me into such deep trouble in the first place — lots of little (and some big) purchases that added up over time.

Now we'll look at where you'll be throwing the difference between your income and your monthly expenses. Next to your list of debts, make note of the minimum monthly payments.

My foggy-memory version:

• Credit card: $4,700 — min. payment: $150
• Student loan: $2,800 — min. payment: $50
• Mom: $1,200 — min. payment: $0 (a mother's love!)

Along with your monthly expenses, you'll continue paying these monthly payments. But, here's the fun part! Pick a debt that you want to pay off first. Dave Ramsey suggests that you pay off the smallest debt first; this will give you a relatively quick "win" and motivate you to keep going (imagine the equivalent of losing 5 lbs. in the first week of a diet — woo-hoo!).

I followed his advice and chose to pay my mom back first. Then, I would attack my high-interest credit card. Since the interest rate was so outrageously high compared to the rate on my student loan, I decided to whittle down the balance quickly, thus reducing the interest charges as well. Last but not least, my student loan would bite the dust.

Let's say for the sake of example that I came up with $500 a month to throw at debt (I was actually able to come up with more; yay for living at home!). I would pay $150 on the credit card, $50 on the student loan, and have $300 left to give my mom each month. I would do that every month until she was paid in full. Then I would continue to pay $50 on my student loan each month, while throwing $450 at the credit card until it was paid in full. Then I would throw the full $500 at the student loan until it was paid off. This is Dave Ramsey's debt snowball plan — click to read more.

Since I knew how much I could afford to throw at my debt each month, I was able to make a "debt payment schedule" — basically, I created a chart that helped me project when each debt would be paid off. This was another motivating feature of my plan (and another Dave Ramsey trick) — I caught a glimpse of freedom in the very near future! I highly suggest you make your own debt payment schedule.

My projections were almost dead-on, too (keep in mind I get paid twice a month; my projections were based on which payday would yield the final payoff):

• Mom projection: March 15; Actual: March 15
• Credit card projection: May 15; Actual: May 15 (read about it here)
• Student loan projection: July 1; Actual: July 16 (read about it here)

These projections turned into solid, written goals. I was in a competition with myself to meet these deadlines, which motivated me to stick to my budget.

OK, that was a really long first tip. But once you have everything written down — your debts, an accurate budget and a debt payment schedule — you have a solid framework for starting to pay off your debt. It was so key for me; all I had to do was follow the plan once I had it in writing.
_______________________________________________

The next tip will be an exciting one! Be on the lookout for G.O.O.D. Tip #2: Get angry — raise a little hell
_______________________________________________

Disclaimer: I'm not a financial expert by any means, and the only proof I have that these tips work is the fact that they worked for me. I don't claim that these tips are new or original; I learned how to get out of debt from Dave Ramsey, and I will link to his Web site on several occasions, as well as other Web sites as needed. I simply add my personal experiences along with these tips in the hopes of motivating and/or helping others to get out of debt. Cheers!