With all types of debts, accounts, and interest rates all hitting you at once, your financial situation can very well seem intimidating. But if you follow this program you will find that there is an effective and safe way to manage your money.

This simple calculation requires the interest rates for each debt account only. This is assuming that all debt accounts have the same tax liability, but if not, you can determine your interest rate after taxes for this calculation.

Your first step is to order your debts; highest interest rate to lowest. You’ll probably find credit cards at the top of the list. Retail credit cards offered by stores usually have the highest interest rates, so you might find this type of credit card on the top. Make sure that the rates did not fluctuate from the promotional rates that you originally signed up for. Card issuers can change your interest rates at any time. They are supposed to give warning, but you may not receive this warning.

Your mortgage and home equity loans may be the next on the list. It’s imperative that you capture every debt for which you make a monthly payment. Student loans might be the last on the list.

Next, pay only the minimum to all debts every month. You should pay the minimum monthly payment for all of the debts, except for the one account up at the top of the list.The next thing you want to do is send all extra cash that is available to the debt with the highest interest. All unused income after paying expenses should be dedicated towards the debt account with the highest interest rate.

Repeat these steps every month. You will cover all of your bases by making sure every creditor receives the minimum payment, but you will focus only on your debt with the highest interest. Once a debt account has been removed, take it off of the list and re-order if interest rates have fluctuated.

Mallory McGuinness works for a debt collection agency.