When you’re juggling several debts and your budget is stretched, it’s easy to feel overwhelmed. But the order in which you tackle debt can make a big difference in how quickly you gain control. Here’s a smart way to prioritize:
1. Start with essential bills
Before tackling debt, make sure you cover rent, electricity, food, and transport. These keep life stable.
2. Secured debts come next
If a debt is tied to an asset (like a house or car), missing payments could mean losing that asset. Protect your essentials first.
3. High-interest unsecured debts
Credit cards, payday loans, and store cards often charge the highest interest. The longer you leave them, the faster they grow.
4. Lower-interest debts last
Student loans or personal loans with lower interest can be paid after you’ve dealt with the urgent ones.
Tip: Even if you can’t pay everything in full, make at least the minimum payments on all debts to avoid collections, and then put extra money toward the highest-priority debt.
Need help creating a payment plan that fits your budget? Debt counselling can help you choose the right strategy and protect your assets.
Message us on WhatsApp 068 429 6191 or email info@plfinancialliteracy.com for your FREE consultation.
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