Managing debt effectively is key to achieving financial stability and long-term success. If debt is weighing you down, know that you’re not alone — and that there are proven strategies to help you regain control. Whether you need to adjust your spending habits, create a structured repayment plan, or explore consolidation options, taking proactive steps today can set you up for a more secure financial future. Here’s how to get started:

1. Identify the Root Causes of Your Debt

Before tackling your debt, it’s important to understand how you got there. Ask yourself:

• Are you overspending on non-essentials?
• Do you lack a clear financial plan?
• Have unexpected expenses left you struggling to catch up?

Debt is often a symptom of deeper financial habits. Acknowledging the behaviors that led to debt allows you to make meaningful changes. By recognizing these patterns, you can create a plan that pays off what you owe and prevents future debt from piling up.

2. Stop Adding to Your Debt

The first step to getting out of debt is to stop accumulating more. Here’s how:

Stick to a Budget: A well-planned budget helps you manage debt and daily expenses. When you take on debt, you’re using future income to pay for today’s expenses, making it harder to reach your financial goals. Use First Financial’s Home Budget Calculator and our other budgeting tools to take control of your spending.

Build an Emergency Fund: Creating a safety net of 3-6 months’ worth of expenses prevents you from relying on credit cards or loans in times of financial strain.

Get the Right Insurance Coverage: Medical bills, home repairs, or car accidents can derail your finances. Proper insurance — whether health, auto, home, or renter’s insurance, can prevent major unexpected expenses from pushing you further into debt.

3. Develop a Realistic Debt Payoff Plan

Paying off debt requires a sustainable plan tailored to your financial situation. Consider:

• Your Income and Expenses: Determine how much extra you can realistically put toward debt each month.
• Your Financial Priorities: Do you have other obligations – such as rent, childcare, or savings goals?
• Opportunities to Increase Income: Can you take on extra work or reduce expenses to accelerate debt repayment?

Depending on your situation, one of the following common strategies may work to help you pay down debt efficiently:

The Snowball Method: Focus on eliminating smaller debts first for quick wins that keep you motivated.

1. List out your debts from the smallest to the largest balance.
2. Make minimum payments on all your debts except the smallest one.
3. Put all your extra funds toward paying off the smallest debt first.
4. Once the smallest debt is gone, roll that payment into the next smallest debt.

The Avalanche Method: Prioritize high-interest debts to save the most money over time.

1. List your debts from the highest to lowest interest rate.
2. Make the minimum payment on all debts except the one with the highest interest.
3. Apply any extra funds to the debt with the highest interest rate first.
4. Repeat the process until all debts are eliminated.

Choose the method that best aligns with your financial situation and motivation style.

4. Consider Debt Consolidation

For those with multiple high-interest debts, consolidation may be an effective strategy. Debt consolidation involves taking out a new loan to pay off existing debt, allowing you to combine payments into one manageable monthly bill — ideally at a lower interest rate.

Benefits of a First Financial Debt Consolidation Loan:

• Fixed monthly payments
• Flexible terms up to 60 months
• No pre-payment penalties

This option works best if you qualify for a lower interest rate than your current debt has, otherwise – you may only be shifting debt rather than reducing it. Apply for a First Financial Consolidation Loan today and simplify your repayment process while saving money on interest.*

Take Control of Your Debt Today

Managing debt doesn’t have to feel overwhelming. We’re here to help you make steady progress toward financial freedom. For more financial resources, advice, and loan options – call us at 732.312.1500, visit your local branch, or explore our services online. Subscribe to our First Scoop Blog for ongoing tips and insights to keep your finances on track!

*APR = Annual Percentage Rate. Actual rate will vary based on creditworthiness and loan term. Subject to credit approval. Loan repayment terms range from 12 to 60 months, and APRs range from 10.24% APR to 18% APR. Minimum loan amount is $500. A First Financial Federal Credit Union membership is required to obtain a Personal or Consolidation Loan or Line of Credit, and is open to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan.