Getting Financially Fit: Debt Management Strategies for Women
Financial Planning
Date: 24 May 2023

Getting Financially Fit: Debt Management Strategies for Women

In today’s day and age, the world can be a volatile place. There’s one aspect you can control, however: your financial situation. Women often face bigger –and more distinct –  hurdles when it comes to managing their finances, from wage inequality to juggling caregiving responsibilities to lack of financial education. In addition, many women carry debt burdens for years, which can hinder their ability to truly achieve financial freedom. 

Managing debt can be challenging, especially for women who are often faced with systemic financial disadvantages. Let’s face it — it can be a daunting task, especially for women who are already juggling multiple responsibilities. However, by understanding debt and its impact on your finances, you can develop strategies to effectively manage it. Let’s dive into debt management and tailored strategies to overcome, survive, and thrive. 

Understanding Debt

Understanding Different Types of Debt

There are two types of debt: secured and unsecured. Secured debt is backed by collateral such as a home or car, while unsecured debt is not. Examples of unsecured debt include credit cards, student loans, and medical bills.

How Debt Affects Your Credit Score

Your credit score measures your trustworthiness with loans – and debt can have a significant impact. Late payments, high balances, and maxed-out credit cards can all negatively affect your credit score. That’s why it is so critical to make payments on time and keep balances low.

The True Cost of Debt

The cost of debt is the interest rate that you pay on your loans. That’s why you need to understand how your debt works – and how you can make informed decisions about which loans to take on – and which to prioritize paying off. 

Creating a Debt Management Plan

Next, let’s dive into a few strategies you can utilize to create your own debt management plan.

Assessing Your Debt

Assessing your debt involves calculating your debt-to-income ratio, which is the percentage of your income that goes towards debt payments. 

To calculate this number, divide your total debt payments by your monthly income. A debt-to-income ratio of 36% or less is considered healthy, while ratios above 43% can indicate that you may have trouble making monthly payments.

Setting Financial Goals

Setting financial goals is a critical part of creating a strong and successful debt management plan. As a woman, it’s important to identify your short-term and long-term financial goals and develop a realistic and holistic financial plan to achieve them. These financial goals can include building an emergency fund, paying off debt, or saving for retirement.

Identifying the Right Debt Management Strategy

Not every debt management strategy will work for you – and that’s okay. You need to be selective about picking a strategy that fits your needs. Consider your financial goals, credit score, and debt tolerance – among other factors. Strategies can include debt consolidation, snowballing or avalanching your debt payments, or balance transfers.

Developing a Repayment Plan

How do you begin repaying your loans? Developing a repayment plan involves creating a budget, prioritizing debt payments, and negotiating with creditors (if necessary). It’s important to make payments on time and avoid taking on additional debt while working towards paying off your existing debt.

Debt Management Strategies


The first step when building your debt management strategy is to start budgeting. Budgeting is the process of creating a financial plan that aligns your income with your expenses. This involves tracking your income, expenses, and debt obligations and then creating a plan that enables you to manage your debt effectively. Family debt management plans often incorporate a more holistic picture of the entire family – and their expenses. If you struggle to make a budget that you can stick to, consider working with a professional to help build a strong (and realistic!) plan. 

Debt Consolidation

You’ve probably heard of debt consolidation before. Debt consolidation is all about taking out a loan to pay off multiple debts – leaving you with only one loan to repay. This can help simplify your debt management and reduce your monthly payments by getting a single loan with lower interest. However, it’s essential to weigh the pros and cons before consolidating your debt.  And, be careful not to start overspending on the credit you freed up during consolidation.

Negotiating With Creditors

Look, no one wants to jump on the phone and speak with creditors. But negotiating with creditors is an effective way to manage your debt. How do you do this? You need to contact your creditors and negotiate repayment terms that work for both you and the creditor. 

Debt Settlement

Did you know that you can actually negotiate how much debt you pay back? Debt settlement is another option, which involves negotiating with creditors to settle your debt for less than what you owe. You will have to contact your creditors – but it can help you pay much less in the long run.


If it all feels too much – bankruptcy may be an option. People with significant debt and no other way out may consider this option. How does it work? Bankruptcy will discharge your debt or help you restructure your debt repayment plan – but keep in mind it also has significant consequences, including damage to your credit score.

Tips for Successful Debt Management

Building an Emergency Fund

When you’re swimming in debt, building an emergency fund seems like the last possible thing to do. However, an emergency fund is critical – no matter if you have debt, or not. Building an emergency fund can help prepare for unforeseen expenses and emergencies, reducing the need for taking on more debt. An emergency fund can help you be prepared for life’s inevitable bumps so they don’t turn into catastrophes that derail your whole plan.

Tracking Spending Habits

Tracking your spending habits and understanding where your money goes can help you better identify areas where expenses can be reduced and to ensure that money is being used wisely.  Many people are afraid to do this because they think ignoring the problem will magically make it go away! But, having the information will usually make it much easier to solve problems. If you’re not on track with your financial plan, this is usually the first place to start.

Avoiding New Debt

When you’re paying off your debt, the very last thing you should do is avoid taking on new debt. Instead, consider creating a budget to help track monthly expenses and plan for future payments. Practice mindful spending, avoid impulsive purchases, and stick to a budget.  However, just because you avoid taking on new debt doesn’t automatically mean you need to cut up credit cards.  Having good credit can help you in the long term and closing credit accounts can have a negative impact on your score.  If you find it hard not to use the cards, put them away until your spending is under control.

Seeking Professional Help

Seeking professional help from a holistic financial planner can make all the difference in learning to manage your debt effectively.

The Importance of Staying Motivated

Debt can be overwhelming and it’s easy to get discouraged, but by celebrating progress, keeping a positive mindset, and finding support, you can stay on track toward achieving financial freedom.

Celebrating Progress

It’s important to celebrate progress, no matter how small. That’s why you should set achievable goals – and when you reach them, take the time to acknowledge your accomplishments. This can be as simple as treating yourself to a special meal or going on that hike you keep putting off.  This will help you stay motivated on the journey.

Keeping a Positive Mindset

Staying positive may be one of the most challenging tasks on this list. The reality is that debt may take years to pay off – and throughout that process, you’ll need to stay positive and stay focused. Hone in on the progress you’ve already made and adjust the steps you’re taking toward a debt-free future. 

Finding Support

Finding a support system can make all the difference in staying motivated. Think about talking to a professional or connecting with friends who are also working towards financial goals. It’s not just about support – it’s also about encouragement, accountability, and a sense of community.

Key Takeaways

For many women, debt can be an overwhelming thing – especially when they have competing priorities. With debt management strategies like budgeting, consolidation, and more, you can take back control of your financial future and achieve long-term financial stability. Remember: successful debt management requires discipline, patience, and determination – but the rewards far outweigh the effort.

Joanna Amberger

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