Which action is essential for effective debt repayment?

Creating a repayment plan is essential for effective debt repayment because it provides a structured approach to managing and reducing debt over time. A well-thought-out repayment plan helps individuals assess their financial situation, prioritize debts, and allocate available resources effectively. By outlining specific goals, payment amounts, and timelines, a repayment plan increases accountability and motivates the individual to stick to their financial commitments.

Additionally, a repayment plan can help prevent further financial strain by encouraging responsible spending and preventing the accumulation of additional debt. Overall, it serves as a roadmap for achieving financial stability, helping individuals visualize their progress as they work toward becoming debt-free.