You may be familiar with the debt-snowball method. If not, check the link. In summary, every month you pay as much as you can against the smallest debt you have and pay the minimum on your other debts. Once you pay off the smallest debt you repeat the process with the next smallest, and so on. As you eliminate debts you should be able to allocate more money to your remaining debts.
I got my tax return checks a couple of weeks ago and used them to pay off my smallest debt; a personal loan I took out last year to buy a car for my younger daughter to drive. Next on the list is one of my older daughter’s student loans.
The alternative to the snowball method is the avalanche method, where you pay as much as you can against the debt with the highest interest rate first. The avalanche method will almost always be less costly than the snowball method, but that assumes you stick with it. The snowball method provides a significant potential psychological advantage: you get a debt completely off your books sooner, giving you a sense of accomplishment and increased confidence to take on the next debt. I can attest to that. It felt good to pay off that loan, despite the fact that I could have paid down a higher interest rate debt instead. And I was a Finance major in college, so you’d think I’d be able to look beyond the emotional part of the decision and focus on the fiscal approach.
Nope. Never discount emotions. Fortunes have been made and lost because of them, and for me, debt will be eliminated because of them.