Weighed down by debt? Here’s how a Debt Health Score could help

No matter where you are on your financial journey, there's always a path forward to a better situation. By taking an honest look at your finances, you're already taking the first step toward a more secure financial future. 

Let’s look at ways to figure out if debt is holding you back instead of propelling you forward. Here are four questions to ask yourself.

1. How do I currently manage debt?

Do you carefully consider the impact of debt on your budget and future plans before whipping out a credit card? Or do you buy what you want when you want it and figure out the finances later? 

There's no wrong or right here, no good or bad. We all learn at our own pace. No one is born knowing everything there is to know about finances. It's more of a learn-as-you-go experience. 

However, if you have trouble making credit card or loan payments, your debt load may be too heavy. 

2. How's my cash flow throughout the month?

Do you have a fairly steady cash flow throughout the month, or do you find yourself checking your bank account to make sure there's enough to cover your upcoming bills? Does your checking account balance ever drop under $50? Do you find yourself paying overdraft fees? Do you have to put everyday expenses—like groceries—on your credit cards?

If your budget can't carry you through the month, you may have too much debt. 

3. Am I prepared for a financial emergency?

Let's say the brakes on your car need replacing, and you'll never make it through the winter on four bald tires. A mechanic tells you they could get your vehicle road-ready for $2,500. How likely are you to have access to that much money? Is there enough in your emergency savings account, or could you tap funds from an investment account? What about friends and family? How likely are they to loan you the money? 

In other words, could you find money quickly if you needed it? 

If the thought of a financial emergency leaves you in a cold sweat, your current debt load may be holding you back from being better prepared.

4. How am I doing physically and emotionally? 

When was the last time you worried about paying your bills? Do financial concerns keep you up at night or distract you during the day? Debt could impact you physically and emotionally. 

If you find yourself stressing about how bills will be paid, it may be time to take action to reduce your current debt. 

Ways to lighten the burden of debt

Debt doesn't have to be permanent. Even small changes could help you free up more money each month to pay down debt. Here are some examples:

• Track your spending: It's incredible how much we can spend without noticing. Tracking your spending means keeping track of where every dollar goes, noting every extra soft drink you buy to get you through the day and each tank of gas. One way to take the budgeting bull by the horns is by using the Achieve MoLO app. 

• Jettison subscriptions: Many of us have no idea how many subscription services we're signed up for. Go through your bank account and  identify each subscription. Note whether it's a streaming channel, podcast, grooming box, or other service. Now, go back through and cancel any of those you could do without. 

• Stay up-to-date with bills and your checking account: The best way to avoid late fees, penalties, and overdrafts is to make sure bills are paid on time each month and that you're always aware of how much you have in the bank. 

• Enlist friends: Chances are, others you know are focused on getting rid of debt. Talk to those you're close to about planning game nights and movies at home rather than going out. 

• Look into debt consolidation: If you can land a loan with a lower interest rate than you're currently paying, a consolidation loan could help you get ahead. A debt consolidation loan could help you reduce multiple monthly payments down to one. You could free up cash flow, pay off debt faster, or both.  

This list is just the tip of the iceberg. Paying down debt is limited only by imagination—there are many strategies to conquer credit card debt. For example, some people rent out extra space in their basement or garage to those who need it. Others take on a roommate until their debt is paid off. Some people offer online tutoring services. 

If you’d like to know more about where your debt situation stands, take our simple debt health quiz to get your personal Debt Health Score.  It’s 11 easy questions and only takes 2 minutes. You’ll find out whether your debt health is poor, fair, or good, and you’ll get customized recommendations for how to take better care of your debt. 

It’s never too late to improve your debt health. Start today!