The 3 Best Tools to Simplify Debt Management

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Managing your finances is one of those unavoidable tasks of adulthood that takes some getting used to.

While the subject of finances is a major stressor for millions of Americans, it’s important to always keep a birds-eye view of your spending to ensure you are making wise decisions for your future. But just like learning to play a sport or a musical instrument, learning to manage debt and finances takes practice. It may take months or years to find a debt management process that works for you.

Ultimately, keeping on top of your finances can mean:

  • Paying off your debt in a timely manner
  • Budgeting the remainder of your money based on priority
  • Making plans for your financial future.

If you are currently carrying debt from different lenders, you may find it difficult to keep track of it all. Luckily, there are plenty of tools to help you simplify your finances. From debt payoff apps and debt management tools to learning how to combine student loans, there are steps you can take to regain control of your spending habits and create a realistic financial plan for the years to come.  

Here are some things you should know about debt management tools and how they can help you get to the bottom of your spending.

What are the most common types of debt?

Most Americans carry at least some form of debt. According to Debt.org, total U.S. consumer debt is around $13.86 trillion. On average, each U.S. household that uses credit cards is carrying around $8,398 in credit card debt.

The most common types of debt that borrowers carry include:

Home loans

Purchasing a home is a goal for many young adults, and many of them achieve this with the help of home loans. Home loans are borrowed from a private bank or other lender and generally come with a fixed rate over a 15 to 30-year period. Mortgage rates will depend on things like your down payment, credit score, and salary.

Auto loans

Auto loans are a major source of debt for many Americans. If you have ever purchased a new or used vehicle, it’s likely that you borrowed funds from a lender and are repaying this loan on a monthly basis.   

Student loan debt

Many students can’t afford the rising costs of college tuition on their own. This often makes student loans and necessity and one of the biggest financial hurdles millennials currently face upon graduation.

Credit card debt

The vast majority of Americans carry at least one form of credit card debt. Credit card debt, however, is not necessarily a bad thing. One of the best ways to build a good credit score is to use credit cards and make payments on time. This proves to lenders that you are a capable and trust-worthy borrower, which opens the door for opportunities in the future.

Why managing your debt is important

Taking control of your finances is absolutely necessary if you’re hoping to pave the way for a bright financial future. Keeping track of your spending with debt management tools is one of the best things you can do to maintain a sensible budget that allows you to pay your bills on time.

From improving your credit score to freeing up discretionary spending, there are a variety of reasons why debt management apps and other debt management tools can be a wise move when seeking to improve your financial health.

Top tools to make managing debt easier

A budget

Creating and sticking to a budget is one way to stay on top of your debt. At the beginning of each month, you can list out your expenses and determine how much money you’ll have left over for discretionary spending like entertainment and savings.

Money tracking apps

It can be difficult to pinpoint exactly where your money goes. Your daily morning coffee may seem like a small expense, but these small expenses can add up to hundreds or even thousands of dollars throughout the course of a year. Luckily, there are a variety of trustworthy money tracking apps to help you determine your spending habits and adjust accordingly. This in-depth view of your finances can prove a valuable tool in shaping the financial future you want.

Debt consolidation

Consolidating your debt can feel like a heavy weight being lifted off your shoulders. You may owe money to a variety of lenders which makes monthly payments difficult to keep track of. If you are tired of paying different lenders, consider consolidating certain types of debt like credit card debt using a personal loan. Instead of several monthly payments, you’ll have just one, and you may be able to secure a lower interest rate.

If you have student loan debt, you can learn how to combine student loans to make them easier to manage while saving money with a lower rate.

How student loan refinancing can simplify your finances

Refinancing your student loans is a great way to simplify your finances and minimize your financial stress. On top of making managing your student debt easier, you may be in for some major savings if you can secure a lower interest rate.

With a lower interest rate and customizable repayment terms, student loan refinancing is an effective strategy for many to save money on their student loan payments.

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Compare student loan refinance options and apply

If you are struggling with making sense of your student loan debt and how to fit it into your monthly expenses, debt payoff apps can help. This and other tools can help you dive deep into your finances and create a plan of action that works for you and your goals.

You can also begin to research student loan refinancing and how it can positively impact your financial future. From Compare Rate tools for student loan refinancing to other debt management tools, putting effort into simplifying your finances will go a long way in improving your overall mental health.

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