Managing and Paying Off Debt

Step-by-step guide

1. 1

   List all your debts

   Write down every debt: credit cards, student loans, car loans. Include the balance, interest rate, minimum payment, and due date for each.

2. 2

   Choose a payoff strategy

   Avalanche method: Pay off highest interest rate first (saves the most money). Snowball method: Pay off smallest balance first (builds momentum).

3. 3

   Pay more than the minimum

   Minimum payments mostly cover interest. Even an extra $20/month on the principal makes a huge difference over time. Round up payments when possible.

4. 4

   Avoid taking on new debt

   Stop using credit cards while paying off debt. If you must use them, pay off purchases immediately. Consider balance transfers to lower-interest cards.