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Tips for Debt Management | Solve Finance


 2 minute read

Published: Thu Apr 27 2023

By Sean Hundtofte, Ph.D., former Adjunct Assistant Professor at NYU, Financial Economist at the Federal Reserve Bank of New York. Expert in Financial Economics and Mortgage Lending Solutions

Getting Debt Management Right, (and Why Most Online Tips For Debt Management Are Wrong)

Borrowing isn’t an original sin. When we want a new house or car, it makes sense to split the payments up over time. While borrowing allows us to optimize our finances, it can get complicated. Without objective financial advice, there are opportunities for lenders or other middle-men to take advantage of households and their financial resources. Regardless of your financial situation, this article will provide expert tips for debt management that you can rely on.

1. Typical Strategies to Manage Debt

Prioritize Your Debt By Interest Rate: Debt Avalanche

Order your debts based on interest rate from the highest to lowest and focus on paying off debt with the highest interest rate first. This strategy saves you money over the course of your debt repayment journey.

Prioritize Your Debt By Balance: Debt Snowball

Order your debts to make heavier-than-scheduled-payments according to your balances on various debt products. If you choose to pay the smallest balance first, that’s called the snowball method. The snowball method involves paying off debts from smallest to largest balance to create momentum and motivation. This is the opposite approach of the debt avalanche method mentioned above.

2. The Best Way to Manage Debt

There is no one way to manage debt. Before you dive into the complex world of your financial data and available lending solutions, you must consider your financial goals. What do you want to achieve by borrowing?

If it’s to maximize the amount of home you can buy, that leads to one set of recommendations. If it's to feel free and clear of debt emotionally, that leads to another set of actions.

Once you understand your financial goals and current financial capabilities, it’s time to optimize your debts. To optimize your debts, you must a) figure out what they currently are, then b) figure out what you could be doing differently. We’ll explain the first step below. In the second step, you’ll use current market rates to optimize your debts. That means refinancing and shifting old debts into new ones, as well as choosing repayment strategies.

3. Understand Your Debts

Take the time to evaluate and understand your debts. You’ll need the following information, available through your free annual credit report, original loan documents, or monthly statements:

  • The amount you owe (principal balance)
  • Your Minimum payment
  • Interest rate
  • The Term (or how long to pay the debt off)

4. Figure out the Market

Next, examine the market for refinancing and consolidating opportunities. Determine current rates for student loans, credit card balances, home equity lines of credit (HELOCs), or second mortgages (if you own a home). Assess if consolidating balances into a personal loan is beneficial. There are a number of financial products and lending solutions available, and with a little time and effort, you can experience significant savings while paying off your debt efficiently. A common question people ask themselves when searching for tips for debt management is “Can restructuring existing debts save me money?” Even if the answer was yes, it was difficult to navigate and execute lending decisions on your own. Users of our Debt Optimizer, available on, frequently discover just how easy it is to take control of your finances and achieve your financial goals.


There is no universally right or wrong approach to managing your finances. The optimal choice depends on your unique situation and personal preferences. While tips for debt management and debt optimizers can help automate the best financial outcomes, emotional considerations may lead to different decisions. Whatever it is, both depend on you and your very unique situation. For the first part – how best to manage your debt – we can definitely help! Our Debt optimizer quickly shows you how much money you can save by automating the best financial outcomes available. We’ve saved users of our debt optimizer over $150/month, and boosted homebuying power by over 20% on average, all by using data and automated financial smarts to figure out the best possible solution for a user’s goals. [Check it out]

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