3 steps to help you ease debt stress


Take control of what you can and develop a debt payoff plan.

What would your life look like if it was debt-free? For starters, you could have more spending power, reap the benefits of a higher credit score, and possibly even be physically healthier.Disclosure 1

Anyone who has dealt with debt—especially significant amounts and multiple types of it—can tell you how it feels. But you can start taking control by following these steps.

First, know what debt to pay off right away. 

Step 1: Prioritize your repayment plan

When deciding which debt to pay off first, start by listing them from smallest to largest balance. Mark the “good debts”—financially responsible debt like student loans or a mortgage—that allow you to achieve greater long-term happiness, and move these toward the bottom of your list. Repayments on a mortgage or student loan balance can also bring tax benefits, and the interest rates should be lower than most other types of debt. Take note of the interest rates on each type of debt you carry.

One way to start tackling these debts is to mark each that have balances under $1,000, regardless of the monthly payment or interest rate, and move those to the top of your priority list. Not only will paying down smaller balances first create momentum (and hopefully give you a quick win or two), but it can free up cash flow more quickly to help you pay off other debts. Also known as the “debt snowball” method, this strategy can have a great impact on your mental well-being.

Once smaller balances are paid off, consider paying off debts from the highest to lowest interest rate—you can accelerate your debt reduction by making extra payments to the top debt on your list. While focusing on one debt at a time, make sure you’re at least paying the minimum payment on each debt on time every month.

After deciding what debt to pay off first, you should factor debt repayments into your monthly budget. As you make progress, celebrate your wins and know you are getting closer to a debt-free life. This will help raise your credit score, too! 

Step 2: Shift your mindset

You can gain a sense of power and agency once you detach debt from the association of debt being completely negative. Just because you have debt doesn’t mean you’re bad with money—many forms of debt are useful because they bring value to your life. Consider student loans, business loans, or home mortgages. Looking at the positive things certain debts have brought you can help you feel more at ease with your situation.

Even if you have lots of high-interest consumer debt from credit cards or personal loans, it’s important that you aren’t too hard on yourself. Stressing about your debt—as about 60% of Americans do, according to a surveyDisclosure 2 won’t make it go away faster. But staying proactive and taking control of what you can by developing a payoff strategy and sticking to it will. 

Step 3: Remember your why

“Put some thought into how resolving your debt will help you live your real values,” says Bright Dickson, Culture Alignment and Activation Consultant with Truist. “Is it going to help strengthen your relationships, allow you to travel more, or move you toward more control over your choices?”

While you’re paying down debt, remember why you’re doing it—and that standing up to obstacles, financial or otherwise, can strengthen mental fortitude. You might find you’re stronger and more resilient than you thought as you continue working toward your goals.

“Being really clear about your purpose will help you move forward,” Dickson says. “Write it all down and keep it in a place that you can easily access when you’re feeling unmotivated or are tempted to get off track.”

Once you know what debt to pay off first, set goals with specific deadlines, which gives you something to work toward. You can achieve a debt-free life by starting with a plan and a positive outlook—and remembering your goals along the way. 

This content does not constitute legal, tax, accounting, financial, or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial, or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.