Managing debt can feel overwhelming, especially when it seems like your payments aren’t making a dent. The good news is there are practical, realistic steps you can take to start building financial confidence. If you’re wondering how to manage debt, here are 7 tips that may help you better understand how you can take action and start paying it off on your terms.
How to know if debt is holding you back
Before we explore how to manage debt, it’s important to recognize the signs that your current debt situation may be standing in the way of your financial goals.
Here are a few common red flags:
- You’re making late or minimum-only payments on bills.
- Your credit card balances keep growing or are maxed out.
- You’ve drained your savings to stay current on payments.
- Your credit score is starting to slip.
- You’ve been denied for new credit or loans.
- Your debt-to-income ratio is high and rising.
- You’re facing overdraft fees or bounced payments.
If these situations feel familiar, don’t panic. There are tools and strategies available to help you move forward with confidence.
1. Revisit your budget and make it work for you
Budgeting is the foundation of any debt management plan. Your budget should reflect your current income, expenses, and goals. Sit down and assess where your money is going. Are there categories where you can reduce spending? Are your debt payments realistic given your income?
Tools like the Best Egg Money Manager could give you a clear view of your finances and help you find opportunities to save or redirect funds toward your debt.
Ultimately, knowing where your money is going is the first step in understanding how to manage debt more effectively.
2. Cut down on credit card spending and subscriptions
One of the easiest ways to accumulate debt is by spending more than you earn, often through credit cards or automatic payments you forget about. Review your statements closely. Are you paying for subscriptions you don’t use? Can you switch to a lower-cost option for services?
By eliminating nonessential expenses, you create breathing room in your budget and reduce the chance of adding new debt while you pay down existing balances.
3. Choose a debt payoff strategy that keeps you motivated
There are 2 popular methods for tackling debt:
- The debt avalanche method: This focuses on paying off your highest-interest debt first and may save you the most money over time.
- The debt snowball method: With this approach, you’ll pay your smallest balances first for quick wins that build momentum.
Whether you prefer saving on interest or feeling those early victories, finding a strategy that motivates you is essential when learning how to manage debt over the long term.
4. Talk to your creditors before falling behind
Many lenders are willing to work with you if you reach out early. Ask if they offer hardship programs, reduced payment options, or due date adjustments. This can help you avoid late fees or damage to your credit.
It’s always better to be proactive than reactive when it comes to your financial health. Knowing how to manage debt includes knowing when to speak up and advocate for yourself.
If you need more structured help, the National Foundation for Credit Counseling could help you find reputable assistance.
5. Increase your income to speed up debt repayment
If your budget is already lean and you’re still struggling to make progress, consider ways to bring in extra income. This might include:
- Freelance or gig work
- Selling items you no longer use
- Tutoring or teaching a skill
- Part-time or seasonal work
Even an additional $100–$200 per month can accelerate your debt payoff journey. Knowing how to manage debt sometimes means finding creative ways to grow your income, so you can balance your expenses.
6. Consider debt consolidation to combine your high-interest debt
Debt consolidation with a personal loan is one of the most effective tools for managing multiple debts. By combining your debts into a single loan, you may benefit from:
- A lower fixed interest rate
- One predictable monthly payment
- A clear payoff timeline
- Less stress and fewer due dates to manage
7. Don’t be afraid to ask for help
Sometimes, despite your best efforts, you may still feel stuck. There are legitimate resources that can support you:
- Credit counseling agencies can help you create a customized debt management plan.
- Debt settlement companies may negotiate with creditors on your behalf (be sure to vet them carefully).
- Bankruptcy is a last-resort option, but it may offer a fresh start in certain situations.
Build your financial confidence—starting today
How to manage debt starts with knowledge and ends with action. Whether you’re setting up your first budget, tackling high-interest debt, or exploring debt consolidation, every step you take is progress. Best Egg is always here to help you make informed financial choices and educated money moves.”
This article is for educational purposes only and is not intended to provide financial, tax or legal advice. You should consult a professional for specific advice. Best Egg is not responsible for the information contained in third-party sites cited or hyperlinked in this article. Best Egg is not responsible for, and does not provide or endorse third party products, services or other third-party content.
