Family Finance · Debt
Not all debt deserves the same urgency.
A 4% mortgage and a 27% card are not the same problem, and treating them the same is how people spend years working hard without much changing.
A workable order
Four steps, in this sequence.
- 01
Get current on everything
Before optimizing anything, stop the bleeding. Late payments cost you twice — in fees and in your credit profile.
- 02
Build a small cushion
Roughly $1,000 available. This is what keeps a car repair from reversing six months of progress.
- 03
List every balance with its rate
Write it down. Most people are surprised by at least one number on that list.
- 04
Attack the top of the list
Minimums everywhere else, everything extra at the highest rate. Repeat until the expensive debt is gone.
Straight talk
If high-interest debt is running your month, that's usually a better place for your next dollar than anything we could sell you. We'd rather you come back in a year in better shape than sign something today.
Debt questions people ask
Dreamlife Innovations, Inc. provides education and guidance. It is not a bank, investment adviser, fiduciary, law firm, or credit bureau, and nothing on this site is investment, tax or legal advice.