Where to Start
The first thing you are going to have to deal with is all of the bills.
Let’s start at the very beginning, a very good place to start. The first thing you are going to have to deal with is all of the bills. Hopefully, by now you will have a complete list of all of the debts that are in your name; whether they are actually yours or not. At this stage of the game, you have no credit cards to worry about anymore, though there still may be some unpaid balances which you need to work out as well.
Depending on the damage that has been done, it may actually be a good idea to set aside a couple of days on your weekend to sort through all of the bills. While it may seem imposing at first, do not allow it to intimidate you. Sort the bills first according to the size of the debt. Record them in this order and keep that information where it is readily accessible.
After that portion of your task is complete, sort all of the bills according to the interest rate being charged. It is important to take careful note of which bills have fixed interest rates and which bills have variable interest rates as well. This will play an important factor in deciding which bills to pay first.
A fixed interest rate is one that does not change or vary at all. The interest rate is always going to be the same no matter what the economy is like. Variable interest rates however, are usually based on the Prime Lending Rate established by the Federal Reserve. These interest rates will fluctuate up or down depending on how the economy is performing at any given time.
It is a good idea to pay at least a little bit on every single bill that you owe. Once you have all of the bills separated and accounted for according to the amount of the balance and the interest rate where it is applicable, you are ready to begin the next step of your journey.
