FACING SEVERAL DEBTS, WHAT SHOULD YOU PAY OFF FIRST?

Many people in Ohio know what it means to be in debt. Everyone goes through tough financial times when paying down debt becomes difficult. In those situations, many people are forced to lean on credit cards, which only puts them further in debt. One family from another state who found themselves in this situation decided to sell their home and move in with relatives. When you are able to cut costs in a way like this, however, which debts should you tackle first?

Of course, the answer to that depends on what debts you are carrying. If you have credit card debt, student loans and car payments, the best place to start, says one financial planner, is your credit card debt. Credit cards often carry high interest rates, so the faster you can get rid of that debt, the better.

Next, continue to find ways to live within your means. For some people that may mean moving in with family members or renting a smaller home or apartment rather than continuing to own a home. If you really need a car, make sure you get one that is economical. An expensive gas-guzzler won't do you any favors. If you can get by without a car, start taking the bus or train places.

When faced with overwhelming debt, it is important to pay it down as quickly as possible. As you are doing that, however, do not sacrifice important savings. Keeping putting money into your 401(k) and that college-savings plan for your child. Finding debt relief is a good thing, but you should never throw away your future stability to do it.

Source: The Wall Street Journal, "First, Cut Up the Credit Cards," Daniel Lippman, Dec. 15, 2013