Debt Management: How To Be Free From Debt!

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Many of us have convinced ourselves that being in debt is just a natural part of life, but being free from debt is actually a wonderful feeling. So that you can free yourself from debt and earn that feeling, here are some of our favorite debt management tips.

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Why is Debt Management Important?

Personal debt is a huge problem in America. The average US 20 year-old has several thousand dollars in personal debts, and that number continues to climb for the next 50 years of life. According to Northwestern Financial, the average debt of an American adult — excluding mortgage debt — is $38,000.

Over 75% of Americans are in a significant amount of personal debt. So you probably know firsthand that owing money is not a great feeling. It is a constant source of stress that keeps you from feeling your best.

But the most terrible thing about debt is that it festers and grows over time, like a piece of old food gathering mold. The longer it sticks around, the more interest it accrues, and the bigger the problem it becomes. This is especially true if you miss payments.

Watching one of your debts grow out of control while you stand by helplessly and watch your future financial stability go down the drain is indescribably awful. Let’s look at 9 good debt management tricks to ensure that it doesn’t happen to you.

9 Debt Management Tips

Keep a “Debt List”

Get out a piece of paper or open a digital document and write down every debt that you owe. For each one, write the total amount owed, the payment schedule, the interest rate, and the easiest way to make payments.

You can go to to get free credit reports, which will make it easy for you to round up all of the public sector debts you owe. Of course, you’ll be in charge of remembering all of your personal debts.

Having all of your debts in one place is extremely important to debt management. It makes it easy to get a big picture of your finances and prioritize debt repayments efficiently. It also helps ensure you never miss minimum payments.

This is the most important tip on this list for getting out of debt.

Pay off High-Interest Debt

All debt is not created equal. If you have a specific debt with very high interest, it is much more important to pay it off quickly — high interest can be a huge money waster.

Keeping a debt list like the one discussed above will help you keep track of which debts have a higher interest rate and need to be paid off first. Keep in mind that creditors have a habit of changing their interest rates sporadically, so be sure to keep on top of that info and modify your list accordingly.

You might even shuffle around your owed debt in between accounts if you can finagle a situation where you are paying a lower rate. This will usually incur fees, but it’s often worth it.

We do not recommend that you miss minimum payments on any of your loans so you can pay back a higher interest one. At least making minimum payments on all your loans should be a priority.

Utilize Debt Relief Companies

There are lots of debt relief companies that help you repay loans with less interest. Very basically, the way they work is that they repay the loan in full and then collect a slightly larger fee from you with a lower interest rate than you were initially paying.

Note that using these debt management programs is bad for your credit score. They’re good for debt management, though, and credit score management is a different issue.

Don’t Fall for Scams

Although many debt management programs help you get out of debt, many scammers in the debt management world prey on the anxiety-ridden types who find themselves in a lot of debt.

When dealing with a debt management program, be sure to check the company’s legitimacy with the Better Business Bureau.

Make a Payment Calendar

a money roll is put over the calendar | Make a payment calendar | Debt Management: How To Be Free From Debt!

Using the debt list, you developed, create a calendar (physical or digital) of the dates you need to make payments for certain loans. Include the minimum payment (which hopefully you can exceed) and the easiest method of payment so that you minimize the time you spend on each debt.

Create a Weekly Budget

This is a fantastic money management tip in general.

Write a detailed outline of how much money you will spend in each area each week. There should be items for rent, insurance, food, leisure, transportation, medicine, and whatever else you spend money on. Also, there should be an item for each debt you have.

Look at the monthly minimum payment for each loan, divide it by four, add however much you can spare each week (especially in the case of the high-interest debts), and voila!

Motivate Yourself

Most people find it helpful to motivate themselves in their debt management by creating visual representations of their progress.

They might use a site like, which keeps track of your debts and shows you how much of each you’ve paid off and how long it is until you pay off entirely at your current rate.

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Some people even create physical representations like paper chains; they tear one link from every time they repay $100 of their debt (for example).

Create an Emergency Fund

Once you’re finally out of debt, make sure you don’t relapse by creating an emergency fund. Keep at least a few thousand dollars set aside in case of a sudden expense like a medical emergency that would normally put you back into debt.

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Don’t Go Into Debt

This sounds painfully obvious, but the best way to stay debt-free is to never go into debt. If you cannot pay for something with the money you already have, do not buy it. There are a few exceptions to this rule, like buying a home. But if you cannot afford that home improvement you’ve been wanting, then do not buy it — fun fact, home improvements are the leading cause of debt in the US. Exercise patience.

Again, debt can snowball, and you need debt management skills to avoid that situation. Get to work on these tips, and you will become debt-free in time.

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