Managing debt
Financial Fitness

Top Tips for Debt Management

Debt management does not have to be as overwhelming as it sounds. Debt is part of the financial journey for millions of Americans, and learning to manage that debt appropriately can make a big difference in your day-to-day life. Stress and frustration are common emotional responses when considering debt. However, with a solid plan in place, the tension a person feels when handling their debt can be eased rather quickly.

Assess Your Debt. Make a Plan.

When taking action to improve your financial situation by deciding to manage your debt, the first step is to create a plan. Look at your debt2 piece by piece. Use a list or even a spreadsheet, if that’s your jam, to create a visual snapshot of your debt. Make note of your monthly payment minimums as well as the interest rates for each of your debts.

Facing any challenge head on is a great way to increase your success as you work through each step towards success. Take courage and remember you’re not alone. A 2021 study by the Federal Reserve noted that 340 Million Americans are in debt7 totaling $14.6 trillion. If you’ve determined that either significantly reducing debt or even becoming debt free is your goal, you can do it.

Once you have a clear picture of your debt, it’s important to also look at your monthly budget and assess how much wiggle room you have financially. If you find that you are spending money on a monthly basis to purchase items that you could do without for a few months, you are in an ideal situation to pay your debt at an accelerated rate.  

Not seeing a category in your budget that you can cut to free up funds for debt repayment? Perhaps you can earmark part of, or your entire, upcoming bonus or next tax refund9 to make a significant difference in your debt balance. Additionally, you could always pick up a side gig to supplement your income5 and help you reach your financial goals.

What is Debt-to-Income Ratio? Does it affect borrowing?

Choosing to lower your debt can have a significant impact on your ability to continue borrowing when needed, so it’s a good idea to stay on top of your debt and pay things off as soon as possible versus carrying debt long term. You may need to borrow funds in the future and having a high debt-to-income ratio could potentially hinder your ability to borrow the amount needed. If you do not have significant savings to cover an emergency, for example, you could run into issues borrowing. However, Speedy Cash is often more flexible than some lenders in this regard. If you’re facing a tough situation and need to borrow money, the loan options at Speedy Cash could be helpful depending on your situation. What about borrowing money for other purposes? In more traditional borrowing scenarios, such as auto or home lending, your debt-to-income ratio could come into play. Understanding debt-to-income ratio is important as you work to build a debt repayment plan.

You may have run across the term debt-to-income ratio, but what does that mean exactly? Your debt-to-income ratio or DTI is calculated by comparing the amount of money you make monthly, your income, to the amount of debt you have and must make payments on each month. Your DTI determines how much additional debt you’re able to take on each month, if any. When a lender considers your debt-to-income ratio, your best interest is ultimately being considered. Taking on more debt than you are reasonably able to pay each month can create a stressful financial situation. A DTI that is at or under 20%6 is labeled as “low” and above 43% could hinder access to larger credit approvals. A great rule of thumb is to aim for under 30% DTI. Besides improving your ability to borrow, you’ll also have more money to spend on savings and fun!

Budgeting for Debt Repayment

To help you on your road to success you’ll need a budget2 no matter which debt repayment method you choose; we will outline a few good options in the next section. Cash budgets are great for people, like me, who struggle with a bad swiping habit (or worse an Apple/auto pay habit). It’s hard sometimes to keep up with exactly how much is being spent over the course of a month when making purchases is as easy as clicking a button. If you struggle with this issue, using a cash system may be your solution. You can divvy cash into envelopes that you label for your planned purchases such as fuel, groceries, etc. When the envelope is empty, you can’t spend any more money. If you choose to utilize a cash system, keep in mind that Speedy Cash offers check cashing services well as money orders at competitive rates. If you need to pay a bill and want to use cash, a money order is a great option especially if you don’t have checks on hand or available. Using cash and creating that boundary for your spending is a great way to stay on track.

If you can’t commit to using cash, or if you find that it’s stressful since many places do not accept cash any longer, commit to using a budget tracker instead. Look at your daily spending by designating a time that works best with your schedule to review your transactions from the previous day. Take it from me, someone who learned how to budget after a lot of trial and error (error=failure in my case), looking at your budget and evaluating your spending daily is the best way to stay on track. Opening your budgeting app to find dozens of unaccounted for transactions is a little stressful, so stay on top of things in order to hit your goals.

Keep your goals in mind as you work through putting a budget in place. Saving money and paying off debt are both admirable goals that you can absolutely achieve, but without a budget it will be very difficult. You can only direct your money to do what you need it to do if you’re on top of things consistently.

Debt Repayment Methods

There are numerous methods for debt repayment, but there are two that are highly recommended by various financial experts. The debt snowball method and the debt avalanche method are both mentioned frequently by experts when offering advice for an accelerated debt repayment plan. Both methods use a metaphor based on the accumulation of snow. As snow moves, it gathers more snow that sticks to it. When you pay a debt off and use the money allocated for that payment to pay off the next debt on your list, you’re paying more than the minimum amount due and therefore will pay that debt off more quickly. As you continue to pay off your debt, each minimum payment is collected, like snow, and is added to the next debt. You can pay off debt rather quickly when utilizing these methods.

Choosing the debt avalanche method means you will pay off the debt that carries the highest interest1 rate before tackling your other debts. The goal is to lower the amount you’re paying monthly in interest in order to save money over the course of your repayment. This method may be best if you will not have the ability to pay your debts off quickly and will instead work on debt repayment over a longer period of time. Saving money in the long run is possible when utilizing the debt avalanche method.

The debt snowball method is similar in many aspects to the debt avalanche but rather than focusing on the debt that carries the highest interest first, you will focus on the smallest debt first. Paying off a small balance does two things: frees up that payment to throw at the next debt on your list and gives you a quick win. Wins are important when paying off debt,3 and the feeling you get when you make a final payment is exciting. Before you know it, you’ll be hurling snowballs right and left paying off each debt more quickly than the rest as you collect more money to allocate to debt repayment.  When reducing debt, strategies become important and choosing the right one that fits your budget, lifestyle, and goals is the first ingredient in your recipe for success.

Managing Debt Long Term

When managing your debt repayment plan over a longer period, it’s important to be gentle with yourself, celebrate your wins, and to be realistic. Debt that becomes unmanageable typically is a result of ignoring the situation instead of dealing with it, and you’ve resolved to tackle this challenge! Your situation is unique to you, of course, but being in debt is an age-old stress. You are doing a great job! Reading this article was your first step, and now you have a solid plan of action in the works. As you knock out your debt one step at a time, take time to celebrate your wins. Pro tip: you don’t have to spend money8 to have a great time and treat yourself! However, it’s completely reasonable and encouraged to budget money for spending on something you choose that makes you smile every month even when you’re working to pay off debt. You could budget $20 or $200, but no matter what your budget allows it’s your money to spend on you!

Creating a budget that is so restrictive that you feel you are suffering will not be sustainable long term. Of course, some people *cough: my husband* can be this militant with their budgeting. Experts and I agree, however, that creating a budget that allows for a little discretionary spending5 is vital to your success particularly when the debt payoff is going to take an extended period to complete. One little step at a time, you can reach your goal! Your friends at Speedy Cash are always rooting for you to win.


1Bev O’Shea and Sean Pyles (2021, April 23). How to Use Debt Avalanche Retrieved from:

2Federal Trade Commission Consumer Advice (2022, April). How to Get Out of Debt Retrieved from:

3Martin, Emmie (2018, Feb 9). You may be paying off your credit card debt wrong—here's the best way Retrieved from:

4DeMatteo, Megan (2023, Feb 27). 6 steps to kick-start your debt repayment plan in 2023 Retrieved from: 

5Pyles, Sean (2023, Feb 9). How to Pay Off Debt Fast: 7 Tips Retrieved from:

6Gravier, Elizabeth (2023, Jan 19). Debt-to-income ratio explained, plus how to calculate yours Retrieved from:

7Fay, Bill (2022, Feb 23). Demographics of Debt Retrieved from:

8Wren, Brittany (2020, Sept 18). How to be Happy on a Budget: 7 Totally Doable Ways to Refill Your Bucket on a Budget Retrieved from:

9Langham, Dalton (2022, Feb 23). Best Uses for Your Tax Refund Retrieved from:

Jessica Price
Read More from Jessica Price
Jessica Price | Finance Blogger | Personal Loans, Payday Loans, Installment Loans, Line of Credit, Title Loans, Budgeting Tips, Financial Literacy Jessica is hyper-focused on making information about the Personal Loans offered by Speedy Cash including Payday Loans, Installment Loans, Line of Credit, and Title Loans accessible and digestible. The key to responsible borrowing is understanding the loans you’re considering, and it’s Jessica’s mission to help anyone considering a loan make an informed decision. Jessica is passionate about sharing Budgeting Tips and helping readers increase their Financial Literacy. You’ll find great budgeting tips and information that will help you improve your financial wellness sprinkled throughout each of her blogs.

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