Debt is a common issue for many Americans, with the average amount of household debt on the rise. However, addressing this problem should not be daunting even though the process can be overwhelming. The first step towards paying off debt is taking stock of exactly what you owe. This involves gathering all your statements and creating a spreadsheet to record your debts. Input important information such as the amount owed, the creditor, the minimum payment required, and the due date. Sorting this by the highest interest and higher minimum payment will give you an understanding of what next to do. Once you’ve got your finances detailed, you should then find an accountability partner, who will help you stay on track and increase your chances of success. It is essential to address the mental health challenges that come with debt repayment, as debt can often have devastating effects on your mindset. By setting realistic goals and strategies, one can decide on a strategy to stick with, which should be based on a clear understanding of how long it will take you to pay off the debt. It is also advisable to create an emergency cushion of at least $1,000 or one month of expenses before accelerating your debt. Adhering to these tips will help you overcome the challenge of debt and achieve financial freedom.
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