39% of Women Plan to Reduce Debt in the Next 12 Months. 6 Tips to Tackle Your Debt

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Getting out of debt is a really smart move.

Key points

  • While debt is a common struggle, ignoring it can have negative consequences.
  • Following a budget, increasing your income, and prioritizing high-interest debt can help you overcome your debt faster.

Many people end up in debt at some point in their lives. Negative debt can affect your credit score and cause stress. However, even if you have accumulated a significant amount of debt, there is a way out of it to improve your financial situation and life.

A recent Investment Loyalty Study examines women’s views on careers, finances, and overall well-being since the pandemic. Although almost half of women report that their views on money and economic issues are worse than last year, that does not stop them from making money that will allow them to achieve their personal financial goals.

Here are two notable findings of the study:

  1. 30% of women plan to start or add to an emergency fund in the next year.
  2. 39% of women plan to pay off debt in the next year.

Saving for future expenses and paying off debt are both smart money flows. If you have a lot of high-interest debt, it may make sense to mainly focus on debt payoff first, so you have more additional income to allocate to your savings goals.

Are you fighting for pay the debt, or feel impossible? The following tips can help.

1. Be honest with yourself

It will be challenging to improve your situation if you are not honest about your financial situation. While it’s not fun to review your finances if things aren’t going well, it’s important. Take the time to figure out how much you owe so you can make a realistic plan.

2. Study the budget

If it feels like you don’t have enough money to put toward debt payoff, you may need to make some changes in your money habits. Setting and following a estimate is a great way to have more control over your finances. If you are new to budgeting, budget application can facilitate the process. You can set spending limits in areas where you need to cut back on unnecessary purchases and free up extra income for your debt.

3. Prioritize high interest debt

Some interest rates are more manageable, while others are sky high. If you have high-interest debt, like credit card debt, it can continue to accumulate very quickly the longer it exists. It is in your best interest to pay down the high-interest debt first to pay less money overall. This is known as debt avalanche method. Consider this when you plan how you will deal with your debt.

4. Get a side hustle or part-time job

If you can commit to a side job or a part-time job, doing so can help you increase your income. With more money, it’s easier to pay off debt faster. While working extra hours may not be ideal, doing it, even for just a few months, can be a win for your finances.

5. Track your progress

If you have a large amount of debt, it can feel like your progress is going slowly. But any progress is a big deal and you’ll be that much closer to reaching your debt payment goals.

Track your total debt and the total debt you’ve paid off so you can celebrate small victories. Doing this can help you stay motivated on your journey.

6. Don’t be afraid to get help

You should never feel embarrassed about asking for help. Many of us are guessing our way through life and doing the best we can with limited resources.

If you are struggling with paying down your debt, it may be time to seek guidance from others. Hire a financial advisor is one of the options. Your advisor can help you develop a detailed plan that fits your situation and goals.

Another option is to take advantage of free online resources that can help you achieve better success. Don’t neglect social media content from money experts and online sources like The Ascent’s others personal finance articles to help guide you through the process.

No matter where you are in your financial journey, don’t let your debt get you down. You are not alone in your financial struggles – and there is always a way out.

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