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This is a guest post By Josh Wilson, a Millennial working to become his generation’s personal finance thought leader @ Faith Family Finance. Josh dreams of a day when all Millennials can thrive through financial literacy and patience.

If you’re short on cash but have plenty of bills to pay, then you may be worried enough to just start ripping your hair out.

However, before you do that, you should try something a little more constructive. Try to prioritize your monthly debt obligations.

Doing so will help you figure out where you stand financially, and you’ll have a much better idea of what you can or cannot pay. The worst thing you can do is ignore the entire situation. With that in mind, I will discuss a few ways to handle debt when you are short on money. It should help you prioritize effectively and seek out solutions to your debt troubles! Maybe you’ll be debt free in the future.

Make Payments You Missed

Falling behind on payments will have negative consequences that get worse as time goes on. Aside from getting pestered by a debt collector at some point, your credit score could take a considerable hit. To prevent this from happening, you should prioritize any bills that you were unable to pay from previous months. The later the payment is, the sooner you should try making the payment.

Let’s say you have several bills to pay this month, but you’re also late on your last water bill from the previous month. You should try to devote funds from your other bills to get up to speed. Of course, this could lead you to be late on other payments down the road, but current due dates are not as important as due dates that have come and gone. By prioritizing the late payment, you have a better chance of minimizing the effect of a late payment mark on your history.

Related: Bad Money Habits You Need to Quit NOW

Pay Off High-Interest Debt First

So let’s forget about late payments and focus on another consideration. No matter what type of debt you have, you should try to pay off high-interest debt first. High-interest debt accrues more interest over time, so consequently, the monthly payment would increase at a greater rate if you were to leave the debt alone. If you allow this to happen, then you’ll be stuck in a hole of debt that’s just getting deeper, so you should try to work off the high-interest debt first.

This tip is a direct callback to the debt avalanche method, a fairly famous and well-known debt repayment strategy. It banks on eliminating the most expensive debt (i.e. high-interest) first, and then it progresses towards lower-interest debt. Typically, high-interest debt involves credit card debt (interest rates are often 15 percent or higher), private student loans (interest rates are usually greater than federal rates), and sometimes personal loans (some rates push 20 percent or higher).

Talk to Your Lenders and Financial Institution

If you find yourself at a dead end when it comes to your monthly payments, call and talk to your lenders or private financial institutions. Sometimes these lenders are willing to work with you, but you have to reach out to them first. Since they do not know you personally, when you miss a payment, they do not know if it was intentional or if it was because you were facing a hardship that month. Talk to them.

If you are able to receive a deferment or grace period, take advantage of it and pay off other debt in that time period. For example, if your lender approves a three-month deferment on your car loan, then use that as an opportunity to pay down other debt in the meantime. The chances of deferment differ between different forms of debt, so it pays to do some research.

Cut Spending

Debt repayment sucks, and I can’t think of a good reason to draw it out. Any money you can save in other areas can be put towards debt repayment.

You can just cut small things out of your budget for now, or if your situation allows, make some drastic (short term) changes that will REALLY speed things along.

Related: 30 Simple Ways to Spend Less Money

Get Cash Fast with These Side Hustles

Lastly, you may want to look into some side hustles for extra cash as you pay off your debt. Yes, you will be a busy person, and yes, you may not get as much free time as you want. However, it will pay off in the end. You may only have to worry about side hustles for a few months before getting out of the woods.

Some great side hustles include freelance writing, baking, cleaning, mowing lawns, and doing anything that you know how to do. Offer your services to someone in need!

You MUST Address Your Debt

You can’t just ignore it.

Your monthly obligations require attention and action, but prioritizing your obligations is an equally important aspect of debt. Once you have your necessities paid, you should sit down and think about what debt falls into the most important spot next. As we mentioned above, focus on what you can afford, try to have some of your monthly payments deferred, and focus on high-interest debt.

Once you have made a dent in your debt, you can restructure and determine from there what the next important debt is. Above all, do not just ignore the situation because it will get worse!

Debt repayment sucks, but there's no way to move on with your life except to tackle it and get it over with! These are great straightforward tips for dealing with #debt
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