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Should I Know How Much Debt I Have?

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There are two types of people in this world: those who cumulate all of their debts to see how much they have to pay, and those who separate their loans to keep themselves in the continuous state of denial – believing that they don’t have such a big debt to pay. Do you even want to know how much you owe? Well, you should.

Why Should I Care?

  • Be true to yourself

For instance, let’s say that someone has $20,000 in personal loans, $10,000 in car loans and $5,000 in credit card debt. In their minds, it sounds better than saying they have a total debt of $35,000. Smaller numbers, less stress; a bigger state of denial.

It’s very important that you don’t separate those amounts of debt. You won’t know how much you owe if you keep staying in a continuous state of denial. Once you raise your awareness over how much you owe, it will make it much easier for you to pay off your debt.

  • Motivation for a More Responsible Lifestyle

Maybe the bigger number will also make you understand how serious the problem is and motivate you to take some serious action. A true picture of what you owe might allow you to make a battle plan. For instance, if you find out that you owe more on your loan than you make in a year, then you have to start working quickly on methods to clear your debt. Taking a look at the big picture will help you be more appreciative of your income.

  • Lenders and Banks Care Too

Maybe you have heard of credit score, the summary of your credit history. If you intend to apply for another loan, then you better take a look first at your credit score, because this is among the first things a lender will check. They want to know how you managed your money in the past because it will tell them if you are a reliable borrower or not.

If you have many debts or larger ones, late payments or missing ones, then your credit score may not be a very pretty picture. And this will affect your chances of getting the loan you applied for. Or, if you do get it, hold on to your hat because those interest rates will be very high.


How to Find Out How Much You Owe

If you want to know how much debt you have, keep on reading. We have a few tips for you:

  • Start collecting your current debts, including your mortgage, car loan, credit card debts and any other debts that you might have.
  • After this, subtract the mortgage and look at each statement to see how much you are paying every month in interest.
  • This way, you may add your debts every month to see how your payments progress, and if you need to make a change or not.
  • You may also ask for a credit card report, to make sure that no other debts have been missed.

Once you have figured this out, there are two things you should do: check your budget and see how much of your income goes on paying your loans. This percentage shouldn’t ever go over thirty percent – which is why you always need to keep an eye out on your debt.

Once you have calculated the percentage, subtract the monthly interest, and you will find out exactly how much you are paying every month.

These calculations will allow you to see where you are standing from a financial point of view. It will prevent the debt from taking over your life, and it will allow you to make a better decision when it comes to financial management.


But Who Do I Owe Money To?

Find out how much you owe and to whom. There are two ways to do that. The traditional way, with a pen and paper, or a more modern way, through online means.

If you want to use the traditional way, take your bills and write down on a separate sheet of paper the name of your lender. Go through all your bills and see exactly who you owe money to and how much you owe them.

If you do not receive bills for all your debts, then signing up for online access to your bank or lender could be a good idea. This way, you can check your balance and payment information anytime and from anywhere.


We hope that this article has given you at least a few ideas on why you should know as much as possible about your debts.

Further help on can be found on Since we specialise in this exact area, you won’t have to worry that you won’t be able to manage your finances. Call us now on 1300 123 328 or enquire now here.