From credit card bills to medical expenses, debt is a common reality. It’s also a source of stress for many Americans. However, debt settlement is often more manageable than you think, and expert advice can make a big difference.
To help you manage your finances, we asked two financial experts to share their insights on how to tackle debt and manage your money more effectively.
What’s the best way to control spending?
Getting your spending under control requires a clear understanding of how and where you spend your money. “It starts with awareness and cognition,” says Margarita Cheng, Certified Financial Planner and CEO of Blue Ocean Global Wealth. “Sometimes we have habits and routines that we don’t think about, but it’s important to establish money habits so we can practice self-care.”
Matt Latman, vice president of personal loans at Discover®, agrees and stresses the importance of taking proactive steps. “Start by developing a habit that works for you each month, maybe an envelope budgeting system, or finding a time to balance your checkbook, or keeping a spreadsheet,” he explains. “Then list all of your income after taxes, and then list all of your expenses each month. When you’re budgeting, these lists will make it harder to forget about less frequent expenses, like car insurance.”
How can I manage my debt without getting into trouble?
Dealing with debt can often feel overwhelming, but having a clear plan can help you take the pressure off. “Acknowledge that you want to improve your situation and take responsibility,” Cheng says. “This includes recognizing which circumstances led to the debt. It’s helpful to understand those circumstances so you can learn from them and set reasonable goals.”
Both Cheng and Ratterman recommend focusing on what you can do to make yourself more powerful in the future. Keeping a close eye on your account balances and credit scores is an effective way to put yourself in control and limit additional debt in the future.
What solutions can I consider to address debt management issues?
There are several solutions that can help you manage your debt effectively, including balance transfers or personal loans. Depending on your situation, one of these may be a better fit.
“If your debt payments are likely to fluctuate from month to month, or your interest rate is higher than you expected, you may want to apply for a debt consolidation loan,” Ratterman says. “Because personal loans typically have lower interest rates than credit cards, they can help you put more of your money toward paying down your debt, saving you money on interest in the long run.”
With fixed interest rates and regular monthly payments, a Discover personal loan is an affordable solution. You can borrow between $2,500 and $35,000 to pay off your existing balance, and choose a loan repayment term that works for you. You can also save hundreds or even thousands of dollars in interest by consolidating high-interest debt. To estimate your savings, check out Discover’s debt consolidation calculator and enter your outstanding balance.
While tackling debt may seem daunting, having a plan can help you pay down your debts and improve your financial situation. This can have a significant impact on how you manage your money and give you more financial security in the future. As someone who has been advising clients on their finances for many years, Cheng explains that this should be the main goal. “We have to take care of ourselves and our loved ones, both now and in the future.”
