Smart Steps to a Debt-Free Future: Practical Strategies to Take Control of Your Finances

So you built your budget, but you’re still struggling to manage your debt. We get it. Debt is like the adult version of the monster hiding under your bed— the best way to defeat it is to face it!

That’s why our EdiFi Experts have come up with a no-frills, easy-to-follow guide to debt reduction. So, buckle up and let's get started!

Debt Management Programs

We know not everyone can spend extra money to pay off debt every month, or may not be eligible for balance transfers— options we get into later. When you’re juggling credit card payments, rising interest, and collection calls, it can feel like there’s no way out. But you don’t have to manage it alone. 

Debt Management Programs (DMPs), through our educational financial wellness partner GreenPath, offer structured, proven ways to reduce financial stress and help you move forward with confidence. Consolidate your debt into one easy monthly payment and become debt-free on a timeline that works for you!

General Debt Reduction Methods

Looking to pay down your debt little by little every month? Not sure which debt reduction strategy is best for you? In this section, we’ll break down two general repayment options that work for any type of debt.

Snowball Method: Great if you want to ease into debt payments, are new to factoring in your debt payments, or have multiple debt payments to juggle. With this method, you pay your smallest balances first— once you’ve zeroed out your debt, take the amount you were paying and add it to the minimum of your next smallest debt payment. Think of the amount you're paying as a snowball; the more you pay, the bigger it gets, and the faster you knock out your debt. 

Avalanche Method: This method focuses on your biggest debt with the highest interest rate first, helping you save money in the long run. But if small wins motivate you, stick to the snowball method!

Paying Off Credit Card Debt

Facing steep minimum payments and high interest rates on your credit cards? Let’s tackle a few ways to eliminate your credit card debt and improve your credit score!

Pay more than your minimums: Did you know that when you only pay your credit card minimum each month, you’re actually paying off interest, not your credit card balance? Try chipping away at more than the minimum payment to get yourself closer to a zero balance. 

Balance Transfers: Transferring high credit card balances to a card with a lower interest rate can help you save money and reduce stress. 

Ways to Pay Off Student Loan Debt

Ready to give the three-count to student loan debt? In this section, we’re giving you the tools to knock out high educational costs.

Note: Some options may not be available to those borrowing after July 1, 2026. 

Standard repayment plan: Standard plans help you pay off your loans fast and avoid high interest as much as possible. The standard repayment plan includes fixed monthly payments for up to 10 years (10-25 after July 1, 2026).

Income-driven repayment (IDR) plans: IDR plans allow you to pay your student loans using a portion of your income, and extend your repayment timeline up to 25 years. Once that timeline is up, your debt gets forgiven. However, keep in mind that you may end up paying more at the end of the day due to interest. 

Graduated repayment and extended repayment plans: This option isn’t for everyone and is only available to those borrowing before July 1, 2026. Professionals who expect their income to rise over the course of their career, like doctors and lawyers, are especially suited for extended payment plans. This option allows repayment terms of up to 25 years and is a good choice for anyone with over $30,000 in student loan debt who needs lower payments than a standard 10-year plan.

Remember, it’s important to choose a debt reduction strategy that works for you and your finances! No financial plan is one-size-fits-all, and the money experts at EdiFi get that. If you’re still struggling to figure out what works best for you, contact our team to get tailored financial advice. 

Because when you know more, you grow more!

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