Being in debt can make even the most focused people lose their perspective. A common reaction to overwhelming debt is to avoid the problem completely and to continue spending as usual. This reaction is so common because facing the situation is painful. It’s important to remember that the problem will only get worse if you ignore it. Therefore, the sooner you take control of your finances, the sooner you will feel better.
One of the first things you should do is to consider whether you can start to pay off the debt over time. To do this successfully, you will need to prioritize your debts. The following are some tips for doing this.
You should first sit down and take the time to understand all your debts. A great way to do this is to create a spreadsheet and enter all the information you have. You should list all the debts you are facing and include information such as the amount owed, the interest rate or APR, the payment due date and the minimum amount owed.
Decide how to prioritize your debt
There are two main ways to prioritize your debt. One option is to prioritize the interest rate. This means that you will start by trying to pay off the debt that has the highest interest rate first. Alternatively, you could prioritize by the amount owed. By paying off the smallest debt first, you will be able to quickly feel the satisfaction of making progress.
If you are worried about your debts and think that you do not have the means to pay them off yourself, you may want to consider filing for bankruptcy.