Can you manage your debt without knowing how much you owe?
Sure — but you won’t get anywhere. You’ll just keep spinning your wheels.
Recently, a friend asked me for help with his family’s growing debt and wanted to find better, more aggressive ways to eliminate it faster. Their total debt was around $60,000, spread across two credit cards and one line of credit. Together, these debts were generating over $670 in monthly interest — a number they hadn’t paid much attention to, believing there was no point.
Curious, I pressed further to understand what they meant. Their response was basically that, regardless of how much they paid in interest, it didn’t matter — they just had to keep paying.
We dug deeper into the numbers, and when I asked how much they were paying toward their debt, the husband proudly said about $1,000 a month. His wife quickly interjected, puzzled about why it wasn’t making a difference.
That’s when I stopped him and asked:
“So, you’re effectively paying only around $300–$350 toward your actual debt each month?”
He looked confused and reminded me that they were paying close to $1,000. I pointed out that after subtracting the $670 in interest, only about $300 of that went toward reducing the principal. They were both stunned. They simply didn’t know their numbers — or had chosen to focus only on how much they were paying, not where it was going.
This highlights an important principle in personal finance, especially when it comes to debt repayment:
You must know your numbers — and stay on top of them.
Had this couple understood how much they were paying in interest, they could have made better decisions. For example:
- They could increase their payments so that at least $500+ per month goes toward the principal.
- They could adopt the avalanche method, focusing on paying off the highest-interest debt first to minimize total interest paid.
- Or, they could try the snowball method, paying off the smallest balance first to build momentum and motivation.
But none of these strategies work unless you know — and track — your numbers: total debt, interest rates, and how much of each payment actually reduces what you owe. This timeless lesson goes beyond numbers — it’s about awareness. In ancient Greek philosophy, the phrase “Know thyself” was inscribed at the Temple of Apollo at Delphi, reminding seekers that wisdom begins with self-knowledge.
The same principle applies to personal finance. To master your money, you must first know yourself through your numbers — your spending habits, your debts, your true financial position. Only by seeing clearly where you stand can you take control of where you’re going.
So before you try to build wealth or chase financial freedom, start with the oldest advice in history: Know thyself — and know your numbers.