Managing debt: Smart ways to take control

As household debt continues to rise in the U.S., it’s important to keep in mind that not all debt is bad. In fact, some types of debt can help you unlock other opportunities, such as homeownership or education. The key to good financial health, however, is to manage debt wisely and comfortably.

Still, carrying too much debt can impact you in many ways, including your health and well-being. The good news? Consistency, determination, and a smart plan could help you regain control. Each step, even a small one, can get you closer to financial stability.

Let’s explore some practical ways you can approach paying off debt.

Make a written plan for managing debt

Start with a clear picture of where you stand. A specific plan could be your road map to debt freedom, and it begins with a list of all your debts — balances, interest rates, bill due dates, and minimum payments. From there, set clear goals for repayment so you know exactly where you’re headed.

Creating a spending plan can help ensure that your money is working toward your goals rather than against them. By tracking income and expenses, you’ll see where you can cut back, free up cash, and stay on track.

Talk about your situation with creditors

If you’re struggling to make payments, contact your credit card company and any other creditors before falling behind — this shows you’re serious about paying off debt . Many creditors offer hardship programs, lower rates, or extended payment periods and may help you preserve your credit score as you ease financial pressure. If you’re already hearing from creditors about overdue bills, don’t stress — answering the call and starting the conversation can open the door to options that help you get back on track.

Pay more than the minimum if you can

Once you’ve outlined your debts and created a spending plan, you should have a good idea of how much — if any — extra money you can put toward paying off debt each month. Paying more than the minimum could help lower your balance faster and reduce what you pay in interest over time. To know where to direct the extra payment, try a repayment method that fits your personality and motivation style:

• Snowball method: Pay off your smallest balance first.
• Avalanche method: Pay off debt with the highest interest rate first.

No matter which repayment method you choose, the key is to remain consistent. Stick to your strategy and you can recognize and appreciate your progress along the way.

Try to avoid taking on new debt

When paying off debt, it’s easier to make progress if you can avoid adding new debt that could set you back. Stick to your spending plan and hold out on making any nonessential purchases until you’ve reduced more of your current debts. You can still celebrate debt milestones in ways that won’t derail your efforts.

Understand your rates and fees

Stay informed about the rates and fees associated with each of your credit cards and other forms of debt. Knowing more about their annual fees, interest rates, finance charges, cash-advance fees, and other fees can help you make smart decisions about what to use, how to use it, and when. Paying on time is one of the simplest ways to avoid late fees too.

Ask for help managing debt when you need it

Managing debt on your own can feel overwhelming, but you don’t have to do it alone. Many nonprofit credit counseling centers offer free or low-cost debt help — you can find one through the National Foundation for Credit Counseling. Your lender’s customer service team may also be able to put you in touch with trusted resources.

Financial coaching is another great option for creating a personalized debt-management plan, getting practical tips, and keeping you motivated along the way.  

Managing debt starts with mindset

Managing debt isn’t just about reducing what you owe; it’s about using it to your advantage and building long-term financial confidence. Debt can be a useful tool when handled with purpose. And by staying proactive, focused, and consistent, you can make smart debt choices that help move you closer to your goals — one payment at a time.