Take charge of your debt, one step at a time
Long version
If you’re dealing with debt, you’re far from alone. More than 80% of U.S. households carry some form of debt (2025 Federal Reserve report), and since 2019, total household debt for Americans has increased more than 31%, to $18.59 trillion.
While debt can help you achieve important goals, such as buying a home or getting an education, it can also create strain on your life and finances. If you only make minimum payments, for example, you’ll hold debt longer and pay more in interest.
Having a clear debt reduction plan can help you take control, reduce anxiety and even save money.
Know your debt. The first step is understanding what you owe. Make a comprehensive list of all your debts, including credit cards, mortgages, auto loans, student loans and medical bills. For each one, note the total amount owed, the interest rate and your minimum payment requirements.
Next, add it all up to see your total debt load. Then calculate your debt-to-income ratio by dividing your total monthly debt payments by your gross monthly income. A good rule of thumb is to keep this ratio below 35% if you have a mortgage or 20% if you don't.
Manage what you owe. Now that you have the big picture, look for opportunities to reorganize your debt more effectively. Perhaps you can refinance existing loans at lower interest rates, consolidate multiple debts into a single payment or transfer high-interest credit card balances to cards that offer lower or 0% introductory rates for up to 12 months.
These strategies won't reduce the total amount you owe, but they can make your debt more manageable and potentially save you money on interest. Just watch out for fees and make sure you understand new terms before making changes.
Set your payment target. Start by identifying your required minimum payments across all debts. Missing these can trigger fees and penalties and damage your credit score, so treat them as non-negotiable expenses in your budget.
Next, look at your budget to identify any funds available after covering all essential expenses. Consider how much of this surplus to put toward paying down debt versus saving for other goals. Remember that building an emergency fund and saving for retirement are also important priorities that shouldn’t be sidelined.
If you have no surplus, you may need to cut back on things like eating out, clothes shopping, on-line subscriptions, entertainment or expensive vacations while you bring your debt in line. Consider an additional part-time job for extra income to pay off your debt sooner.
Prioritize your debt. Finally, decide which debts to tackle first with any extra payments. One approach is to focus on paying off the debt with the highest interest rate first, which minimizes the total interest you’ll pay over time. Alternately, you can target the smallest balance first to help you build momentum and motivation.
Taking control of your debt doesn't happen overnight, but with a clear strategy, you can make steady progress toward your financial goals.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.
Edward Jones, Member SIPC
Word count: 499
Short version
PSA: Take charge of your debt, one step at a time
TBA: Mar 23, 2026
If you have debt that feels overwhelming, you can regain control.
First, know what you owe. List all balances from mortgages, auto loans, medical bills and credit cards, and divide that total by your gross income. Aim for less than 35% with a mortgage or 20% without.
Second, look to lower or simplify your debt by refinancing at lower rates, consolidating multiple debts or transferring high-interest balances to lower-rate cards.
Third, determine how much extra you can pay to bring down the debt. Calculate how much is left after paying essential expenses and minimum payments. If need be, consider freeing up money by cutting spending, such as dining out or shopping for nonessentials.
Finally, decide which balances to pay off first and which will stay at minimums until their turn. Many people start with the highest interest rate; others choose the smallest balance for quick wins.
By building a clear strategy, you can turn debt repayment into a manageable goal.
This content was provided by Edward Jones for use by (FA’s NAME), your Edward Jones financial advisor at (Branch address or phone#).
Words: 160 (excluding FA’s name, address/phone number)