Once you know what you owe, make a plan to control debt with these 5 tips:
- Pay off credit cards with high interest rates first—then get rid of them.
- Pay as much as you can on your smallest debts and pay at least the minimum on large ones—even modest accomplishments can be great motivation.
- If you buy a home, it should cost no more than 2 to 2.5 times your household income, and your mortgage should be no more than 80% of the home’s value.
- Aim to pay off debt using incoming cash flow, not savings.
- Evaluate paying off low-interest debt versus saving more.