Dealing with debts

Being deep in debt can be stressful to your health. The worry over how to pay the bills and the struggle to save for the future impacts over 50% of Americans, according to a 2020 study by Capital One. And stress over finances can make it more difficult to save, budget, or even write a shopping list to help keep you on track at the store.

Digging yourself out of debt can boost your mental and physical health. Having more income freed up from debt may mean greater financial confidence, morale, and better opportunities to save for the future.

Financial experts often recommend two ways to tackle debt. The "avalanche" method and the "snowball" method. Both plans may help you focus your approach to paying down debt. An avalanche approach means you pay off your loans or credit cards with the highest interest rates first. You throw as much money as you can at them, and pay only the minimum on all your other loans. The snowball approach has you tackle the lowest amount of debt first, pay it off, and then tackle the next loan.