This guest post was written by Chris at My Canada Payday. Visit their website at http://www.mycanadapayday.com for any short term credit needs you may have.
Those people who have had the fortune of not getting into massive debt usually don’t understand why those who do have large liabilities can’t get out of their financial pitfall. The problem usually stems from multiple sources of debt coupled with technical jargon that makes it hard for them to know where to start.
The best way to begin rehabilitating large debts is to keep track of all income and expenditures, prioritizing payments towards interest expenses. This can be a very tedious and boring process, but the end result can be of great help to the debt holder.
Once all liabilities are identified, it’s time to prioritize. Ensure that all creditors receive the required minimum for each month. Any excess disposable income should then go to the highest interest debts, which means that any payday loans you owe should be paid off first. Paying off these big loans will help minimize interest payments later on.
This habit should kept strictly for the next few months, and any additional income should go into paying off loans faster. Some simple luxuries like cable television and new clothes will have to be suspended in the meantime. These will be months spent living in frugality, but the next few years after all the loans have been paid off can be spent building up towards a more profitable lifestyle.