What action is recommended when facing multiple debts?

When dealing with multiple debts, prioritizing paying off the smallest debt first is a widely recommended strategy, often referred to as the "debt snowball" method. This approach can provide a psychological boost by allowing individuals to see progress quickly, as they eliminate smaller debts one by one. The satisfaction of paying off these debts can increase motivation and commitment to tackling larger debts.

This method also helps improve cash flow, as eliminating smaller obligations can free up funds that can then be applied to larger debts. It creates momentum, encouraging individuals to stay on track with their repayment strategy.

While consolidating debts and seeking advice from a financial advisor (the other options) can also be beneficial strategies in managing debt, they may not offer the immediate psychological benefits or sense of accomplishment that tackling the smallest debt can provide. Ignoring debts is never a practical solution, as it can lead to more significant financial trouble over time.