How Budget Apps Help Manage Debt 

Keeping track of your income and expenses is crucial to staying in control of debt. Use budget apps to help categorize your expenses and get an accurate picture of what you’re spending each month. 

Start with an overview of your total debt and interest rates, then focus on paying off the smallest balance first (while still making minimum payments on other debts). Building an emergency fund is also essential. 

Pay Off High-Interest Debts First 

A significant amount of debt can be very expensive, especially when you have accounts that carry high interest rates. This can be true of credit cards, payday loans or even some auto loan balances. 

The good news is that you can often save a lot of money in the long run by tackling these accounts first. One option is to prioritize your debt payments by the interest rate each one incurs. This approach is sometimes referred to as the “debt avalanche” method and can be helpful for people who want to save money in the long run while repaying what they owe. 

To begin, create a list of your debts and their current balances, minimum monthly payment amounts and interest rates. Begin by paying the minimum on all accounts but put any extra money toward the account with the highest interest rate. When that balance is paid off, roll the money you were putting toward it into the minimum payment on the next-highest rate debt. Repeat this process until all your debts are repaid. 

Make a Budget 

A budget is the best way to know exactly where your money is going. It can help you make a plan for paying off debt or saving for an emergency fund or larger goal like a house or car. 

Figure out how much you spend each month by reviewing your checkbook register, credit card statements and store receipts. This will give you a clear picture of your expenses and show where you can cut back. 

If you are struggling to make ends meet, consider talking to a credit counselor. Many non-profit organizations offer counseling for little to no cost. Some may even be able to help you set up a debt management plan that allows you to combine multiple debts into one monthly payment, often with a lower interest rate than your current loans. However, this is only a short-term solution and you’ll still need to focus on spending less money overall. Make sure to prioritize paying off your debt using strategies such as the debt snowball and avalanche methods. 

Negotiate Your Bills 

One way to cut your debt load may be to negotiate directly with the creditors you owe money to. If you’re behind on payments or struggling to make your payments

because of a loss of income, a health crisis or another financial setback, it’s important to reach out to the creditors early and communicate about your ability to pay. 

Creditors are unlikely to offer you a settlement for less than what you owe, but you can try to negotiate one-time payments or a reduced interest rate. This is more likely to work if you have been able to keep up with your other bills and don’t have a history of missing payments. 

You can also use online services to help you save on your recurring bills. These typically allow you to upload your bills and provide the service with your authorization to access your account information. Then, expert negotiators work on your behalf to get lower rates. 

Make More Money 

If you’re having trouble making ends meet, look for unnecessary expenses that can be cut or eliminated. Removing these expenses from your budget frees up more money to put toward debt repayment, which helps you get out of debt faster. 

Consider picking up a side hustle to help you make extra cash. You can find a variety of ways to earn more income, from freelance writing and tutoring to dog walking, ride sharing or even selling items you no longer use on marketplaces like Facebook Marketplace, Poshmark and Mercari. 

You can also try to pay more than the minimum payment on your bills, and take advantage of any financial windfalls that come your way. Getting out of debt can be a long process, but it’s possible to get there with the right strategy. Using a debt management plan, refinancing your debt at a lower interest rate, adopting the snowball or avalanche method and committing to a budget can all help you get there sooner.

Seek a professional financial advisor or even a Harrisburg bankruptcy lawyer for more information regarding avoiding bankruptcy and reducing your debt.