Make a budget
Debt happens when you spend more than you earn. If you can’t earn more, you have to spend less. How can you achieve that? Make a budget.
Your budget can be simple — outlining your total monthly income, expected expenses, and variable expenses. When you subtract your expenses from your income, you’ll know how much you have left over for savings, leisure and repaying debt.
However, budgeting can be challenging, especially when trying to track multiple accounts and daily expenses simultaneously. Monarch Money's expense tracking system simplifies the process.
The platform seamlessly connects all your accounts in one place, giving you a clear view of where you're overspending. It also helps you monitor your expenses and payments in real time. Whether you're looking to save, invest or simply control your spending, Monarch Money offers the tools to help you succeed. Plus, for a limited time, you can get 50% off your first year with the code NEWYEAR2025.
Consolidate your debt
Managing multiple debts can feel like an uphill battle, but debt consolidation can help you streamline your finances and set you on a faster track to becoming debt-free.
By merging your debts into one single personal loan — often with a reduced interest rate — you can save on interest charges while only paying one predictable payment each month.
The process of finding the right loan is fast and easy with online marketplaces like Credible. Credible lets you comparison-shop for the lowest interest rates with just a few clicks.
The process is completely free and won’t impact your credit score. Simply answer a few simple questions, then Credible will automatically display actual rates offered by top lenders like SoFi, Discover, Upstart and more.
Use a transfer balance card
It's evident that many Americans are grappling with financial challenges. While various loan products play a role in this growing problem, credit card debt stands out as particularly tough to manage. The reason? The sky-high interest rates.
The average credit card interest rate in the U.S. is 24.20%. Unlike fixed-rate loans, credit card balances compound, and if only minimum payments are made, they can quickly escalate out of control.
One way to solve this problem and pay down credit card debt quickly is by using a balance transfer credit card. This allows you to transfer your existing debt to a card with 0% APR for a certain period. This helps you save money on interest and pay off your balance faster without the extra cost piling up.
Searching for the right credit card can be overwhelming. But with CardRatings.com, it’s quick, easy and personalized.
Their CardFinder tool lets you easily compare a wide variety of rates and balance transfer offers so you can find the right card that suits your needs and offers the lowest transfer fees.
Imagine you have a $5,000 credit card balance with a 22% interest rate. With monthly payments of $200, it could take years to pay off and cost almost $2,000 in interest. If you transfer that balance to a 0% interest balance transfer card with a 2% fee, you will pay a one-time fee of $100 (2% of $5,000). However, all your $200 payments will go toward the principal, helping you pay off the debt faster and save significantly on interest compared to the original 22% rate.
Consider a HELOC
Millions of Americans are feeling overwhelmed by rising debt and growing financial responsibilities. Total U.S. household debt has hit over $18.4 trillion, with the average household carrying about $105,056 in debt, according to the Federal Reserve.
For Americans aged 66-71, auto loans make up the largest portion of the debt, accounting for 33.3%. Credit card balances follow closely at 31.7%, with student loans at 15.6% and personal loans at 13.0%.
If you have such high-interest debts, you may want to stop that interest from accruing by tapping into your home equity with a reverse mortgage or a home equity line of credit (HELOC) loan.
With home values higher than ever, you can make your home work harder for you by leveraging its equity. The average homeowner sits on roughly $315,000 in equity as of the third quarter of 2024, according to CoreLogic. Year over year, homeowner equity is also up by 8% for a national aggregate of $17.6 trillion.
With a HELOC loan, you can turn all that home equity into tax-free cash, which can be used to pay off high-interest loans. Rates on a home equity loan are typically lower than APRs on credit cards and personal loans, making it an appealing option for homeowners with substantial equity.
You can unlock the lowest possible rates in minutes by shopping around. You can compare real loan rates offered by different lenders side-by-side through LendingTree.
Just answer a few simple questions, and LendingTree will match you with up to 5 lenders with the best possible rates today.
