I have a lot of debt and don’t know where to start. I am overwhelmed and frustrated. What is the first step I should take?
February 12, 2014
The first step is to gather all your financial information. You want to know how much debt you have and the interest rate on each mortgage, credit card, student loan, etc. When looking at saving for the future, it is important to get rid of debt. Then stop using your credit cards; if you have credit cards you can't pay off in full every month you are living beyond your means and you will want to make a budget for yourself. You may want to You may want to look at consolidating any credit card debt you may have. Consolidating your credit card debt is taking all the credit cards you have a balance on and merging them-transferring all the balances to one card (preferably with a lower interest rate). If you are a homeowner, you may want to take out a home equity loan or line of credit, because the interest rate may be lower than your credit card, and any interest paid is tax deductable. Be careful if you do this though, because you are now attaching credit card debt to your house and if you don't make the payments, you could lose your home. Once you have analyzed your debt, you can start to pay it off, either by consolidation or one loan at a time. Start by paying the most money to the account with the highest interest rate. If you are committed to whittling away your debt this way, pretty soon you will start to see it shrink.