Q: Dear Smart Cookies, I have over $20,000 in credit-card debt. I know that my spending is out of control but I don’t even know where to start. I’d really like to buy a place in the near future but I feel like I will never be able to save up enough for the down payment.


A: First, take your finger off the panic button. Time to talk about the six easy steps that helped us get out of debt (and we had a lot of it — $35,000 collectively). If we can get collection agencies to stop calling us, so can you:

  1. Tally up your totals: Start by collecting your credit card statements. List the total unpaid balance on each, the interest rate you’re paying, the minimum payment and what your credit limit is. It hurts, we know, but it’s important to face up to it.

  2. Prioritize payments: Rank your credit cards in order of highest to lowest interest rate.

  3. Be a card shark: Call your credit-card companies and try to lower the interest you’re paying on each card. Don’t give up easily. You may have to be willing to take your business elsewhere if they refuse to lower your rate.

  4. Consolidation: If you qualify for a line of credit, consider transferring the balances of your credit cards to one lower-interest line of credit or your lowest-interest-rate credit card. By only having one payment, you’re less likely to miss due dates.

  5. Find hidden money: Daily expenses can add up to thousands of dollars each year. Want to find an extra $150 each month to pay off that debt fast? Cut back eating lunches out from five days a week to two; call your cellphone provider and ask for a better package; and consider consigning some of the clothes you don’t wear. The extra money you make should go to paying off your debt.

  6. Don’t dwell on debt: Smart Cookies believe in the law of attraction. If you constantly focus on your debt, that’s exactly what you’ll attract. Instead, focus on your dream of owning your own home, and you’ll be throwing your housewarming party in no time.

The Smart Cookies show you their way to financial freedom. If you want to be smart, be rich and be fabulous, you have come to the right place! Tune in Wednesday night at 9:30 p.m. EST/PST on the W Network. Be sure to visit smartcookies.com to get new money tips and sign up for our newsletter.

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