This article is a partnership with GreenPath Financial Wellness

Debt can be challenging to manage, even in the best of times and even more so in a climate with pressing news about rates and the rising cost of borrowing daily. With all that is happening, you may be pondering how to manage your debt effectively.

Here are three areas to review and reflect on to determine how well you are positioned to handle debt:

Credit score and history

Knowing this information helps you understand how rising interest rates will impact you. Some research shows that only 33 percent of Americans check their credit score yearly. This is concerning as many factors can affect your score. Regularly monitoring your credit can alert you to errors, protect you from fraud, and provide valuable information to strengthen your credit score. This, in turn, can potentially minimize your risk towards the rising cost of borrowing.

Debt portfolio

Creating a compilation of debt, offers an overview of your current borrowing status. To create a debt portfolio, first, list your current debt, such as credit cards, car loans, student loans, and other debts, to visualize the big picture of your financial situation.

An effective next step is reviewing your balances, terms, and interest rates monthly. By staying on top of this vital information, you can make adjustments and informed decisions about reducing any existing balances.

Realistic payment plan options

Are you able to make consistent payments to pay off your debt? If you earn more than you spend, you may be better positioned to pay off and build personal savings for your future. Maintaining a financial budget is key to managing your spending and avoiding high-interest debt.

Starting with the highest-interest credit cards or loans is ideal as a debt paydown strategy. Additionally, consider paying  balances in full by the due date each month. Then, you can avoid interest charges on what you purchase, which means rising interest rates may not affect your household finances as much. Setting financial goals, preparing a financial plan, sticking to a budget, and setting up an emergency personal savings fund are other ways to ensure your financial well-being does not suffer as interest rates rise.

Trusted resources for support 

There may be times when you need additional help to manage your debt and personal finances. As a community bank in NYC, we provide exceptional personalized customer service to help you at any stage of your debt-managing journey. We also offer the best savings accounts online with flexible options to build secure personal savings to reach your goals. In addition, our partner GreenPath Financial Wellness gives free counseling and free debt management advice. When you connect with a GreenPath financial expert, they’ll walk you through addressing your financial concerns and develop a plan for debt payoff, building savings, and creating a financially solid future.

Contact us to learn more about our personal savings account options and schedule an appointment with GreenPath Financial Wellness today.