The Ides of March has an interesting place in history. It was on this day in 44 B.C. that Julius Caesar was assassinated by 40 of Rome’s senators who felt removing him from power was in the best interest of the people. Though these 40 senators were successful in taking down Julius they didn’t really accomplish their overall goal. There was so much dispute that followed Julius’ assassination as to how to handle the power gap and in the end, the Romans ended up with another Caesar similar to Julius. Of interesting note is that more than 2,000 years later the Romans still lay flowers at the tomb of Julius Caesar on the Ides of March to commemorate his death. But what was there something significant about the Ides of March other than Julius Caesar’s assassination? Not exactly. The “ides” was more about a mark of time. It marked the halfway point of a month. Most months the ides fell on the 13th, but in March, May, July, and October the Ides fell on the 15th. The ides of each month were a time designated by the Romans to settle a debt. We just tend to hear about the Ides of March more because of Caesar. There was another cultural significance for the Romans around the ides of each month, but debt settlement was an expectation for the citizens each ides of the year.

Paying Down Debt

This brings us to the actual point of this article, paying down debt. The Ides of March it was just a fun way to introduce the topic with a short history lesson. The reality is debt is not a new concept or reality for us today. People have been dealing with debt collectors since ancient times. And the act of debt collection has not been so kind over the centuries toward the borrower. Before we talk about some principles of getting out of debt, let’s recognize that though a lot of debt in the U.S. is accrued through poor money management and poor financial choices that isn’t the full picture. There are a great many people in debt due to medical expenses, uncontrollable life circumstances, and falling prey to creditors. No matter what your situation is you have the power to make decisions that can improve your debt situation.

Where to Start

Start with assessing your situation. It may help to schedule a time with yourself when you can sit down and calmly gather all the information on your outstanding debts and compile that information in one place. If you work best writing things out by hand then use a notebook. If it is easier to use a spreadsheet then use Excel or a similar program. List out all your debts. Include your minimum payment amounts, the interest rate for each loan, and any other important information related to the loans.

Determine what your goals are and how much money you can put toward your debt each month. Maybe your goal is simply to pay off your credit cards. If this is the case your strategy will be different than if your goal is to pay off student loans and your mortgage. If your budget is stretched to the point where making your minimum payments is difficult then you may want to consider going to a professional credit counselor. Other strategies include debt consolidation, home equity loans, and refinancing a home, among others. These are options that should not be considered lightly and should be talked through with professionals who can really help you understand if the risks outweigh the benefits. Sometimes the risks do, and other times they don’t. These are not one-stop-shop solutions.

Most people start with power payments. Sometimes this is also referred to as snowballing payments. To implement this strategy you will need to decide how much above your minimum payments you can afford monthly. For example, let’s say you have 3 credit cards. One minimum payment is $25 per month on a Visa, the minimum payment is $55 per month on a MasterCard, and the AMEX has a minimum payment of $245 per month. That’s a grand total of $325 per month. Let’s also assume you can put an extra $100 per month towards this credit card debt. Now your total towards all monthly credit card payments is $425. Instead of dispersing that extra $100 across all three cards, make minimum payments on two of the cards and the full extra toward the one card. Hypothetically, let’s say you chose to put the extra towards the Visa first.  As the minimum payment on the Visa goes down you still put a total of $425 toward the debt. That Visa gets paid off in two or three months and now you put the extra toward MasterCard. So now you are paying the $245 minimum on AMEX and you have $175 going to the MasterCard. Maybe it takes 4-6 months of paying all the extra towards MasterCard until all you have is the AMEX then the full $425 per month goes towards the AMEX until it is paid off. Make sense? This approach helps you get the satisfaction of eliminating one debt more quickly while also saving some money in finance charges over time.

For more information on debt paydown strategies and credit check out the UGA Extension website.