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5 Easy Ways to Manage Debt

Updated: Mar 12, 2021

5 Easy Ways to Manage Debt

Does it feel like you’re drowning in debt? It can be challenging to pay down your credit card and loan balances without a plan. Fortunately, there are steps you can take to more effectively manage your debt and get the financial relief you need.

1. List All Your Debts

To create an effective debt management plan, you’ll first need to know how much you owe. Grab a notebook, go through your bills, and write down this information for each debt:

  • The name of the creditor you owe money to

  • Outstanding balance

  • Monthly payment

  • Interest rate

Be sure to include your mortgage, credit cards, personal loans, auto loans, student loans, and collection accounts appearing on your credit report. You can check your credit report from all three credit reporting agencies (Experian, TransUnion, and Equifax) for free at to see the accounts you have open.

2. Figure Out How Much You Can Pay Every Month

The next step is to figure out how much money you can put toward your debt after monthly bills such as rent, utilities, and other necessary expenses are paid. Make a list of your monthly income and expenses—the amount that remains can be put toward paying your debts. If you are having trouble making the minimum payments on your debts or want to speed up the repayment process, consider picking up a second job to add to your monthly income.

Try to prioritize credit cards with high-interest rates, and pay more than the minimum. This move will also help you pay down those debts faster and will save you money in the long run.

3. Pay Every Bill on Time

Late or missing debt payments are bad news for your credit score. They get added to your credit reports once the account is 30 days past due and could make it difficult for you to get loans, insurance, or even rent an apartment. However, payments made on time help build your credit. That’ll help you get approved for loans or credit cards and qualify for lower interest rates in the future, which can save you a lot of money.

Consider using autopay or set payment reminders through your bank or on your phone or calendar to avoid missing payments going forward.

4. Consider Consolidating Debt

Consolidate your debt using a loan or balance transfer credit card if you’re overwhelmed with too many payments every month. A personal loan with a lower interest rate than what you’re currently paying on your credit cards, or a credit card with a temporary 0% interest rate, are both good options if you can qualify. You’ll only have one payment each month and could save a lot on interest.

5. Get Help if You Need It

Contact your lender right away if you’re having trouble making payments—ideally before you miss your first payment. Let them know that you’re financially distressed, and they may be willing to suspend or lower your payments for a few months. Also, consider contacting a credit counselor, which you can find through reputable nonprofit organizations. Credit counselors will review your financial situation for free and offer advice to help you get your finances back on track and position yourself for long-term financial success.

Power in Your Hands

Dealing with debt can be overwhelming, but you have options and there are people willing to help. Take these actions to start paying down your debts, boosting your credit, and rebuilding your financial health. If you get started and realize you need assistance, don’t be afraid to ask for help to minimize your stress levels and get back on track financially.

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Aysia Morton is a New York-based freelance personal finance writer. She writes for people who want to simplify their finances. Aysia is also an advocate for financial equality and equity and is passionate about studying how personal finance is affected by the racial wealth gap. She received her BA from the University of Maryland College Park and is pursuing her Master's degree. In her free time, she enjoys cooking, concert-going, and reading books.

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