Want to get out of debt, but not sure where to start? Let's take it step by step.
Total All Your Debts
Include credit cards, charge cards, student loans, car loans, medical bills, home equity loans, personal loans and any other debts that you may have.
Reduce Your Rates
Contact your credit card companies to ask for a better interest rate; look into consolidating your student loans (if you haven't consolidated them already); and check to see if refinancing your mortgage makes sense.
Sound like a lot of work? Just remember: lower rates, means less for you to pay.
Separate the Good from the Bad
Divide your debts into "good debts" and "bad debts." For the purpose of this exercise, consider good debt to be any debt that you took on for something that you expect to go up in value (your house, your education, your business), and bad debt to be any debt that you took on for something that you expect to go down in value (your car, furniture, meals out, vacations, clothes).Pick a Debt to Tackle
Look over your list of bad debts, and decide which one you want to tackle first. It could be your smallest debt, your debt with the highest interest rate – the choice is yours, so decide what would motivate you most.
Then, select an order for paying off your remaining bad debts.
