If you’re struggling with debt, you’re not alone.  According to U.S. News, 40% of Americans can’t afford to pay basic bills. Whether you’ve fallen on hard times or simply can’t make ends meet, the cloud of excessive debt can feel overwhelming. However, there is light at the end of any debt tunnel. This article explores simple ways to help you dig out of debt at any budget.

When is Debt an Issue?

The average American carries roughly $38k in debt. Auto loans, card charges, and student loan debt make up the bulk of these dollars. Having debt that you are able to responsibly maintain may be a good thing – at least from a credit standpoint.

A mixture of good standing debt can help you build up your scores if you never miss a due date. However, having too much debt or if bills are taking a toll on your emotional health, it’s an issue.

“Debt is considered a problem if you have a high balance and you’re not making more than the minimum payments,” says Michael Marsden, Executive Director of Operations at DebtWave Credit Counseling, Inc.

The sections below reveal some of the largest culprits behind debt issues, backed by solutions to help you get back on track.

Credit Card Debt

For best credit score results, consumers should stay at or under a 30% utilization rate with all card activity.  However, for the 78% of Americans who live paycheck-to-paycheck, this goal may be easier said than done. If a medical emergency or unexpected event occurs, many turn to credit cards to bridge the gap. Pair this with high-interest rates and you’ve got yourself a recipe for a debt disaster.

According to Marsden, the first step in taking control of your credit card debt is to stop charging items if you can’t afford to pay off your balance.

If credit card debt is becoming difficult to maintain, it might be wise to look into a credit counseling service. Nonprofits like the one Marsden works for, DebtWave, provide a variety of assistance programs that may be able to help you more aggressively pay off your credit card debt and better manage your unique financial situation.

Student Loan Debt

Student loan debt now makes up over 1.5 trillion deficit dollars and currently affects over 44 million borrowers nationwide. Gina Sansevero is the Training Manager for a doc-prep company that helps federal student loan borrowers better understand their repayment options.

“More often than not, borrowers struggle with student debt because they typically don’t realize they have options,” explained Sansevero.

Options, she adds, that could help you lower your monthly payments or forgive a portion of your student debt if you qualify. However, not all loans are created equal; and the options for federal loans may vary from private.

Federal Student Loans

The Department of Education offers a variety of repayment programs to help borrowers ease the burden of high monthly payments. Here are a few options that may be able to provide some relief:

  • Student Loan Forgiveness
    It’s probably safe to say that forgiveness is the most ideal route to dig out student loan debt.  But first, you have to qualify. There are several forgiveness options available such as PSLF for qualified borrowers who work in public service.  Or, Teacher Loan Forgiveness for, you guessed it, approved borrowers who work in public education.
  • Income-Based Repayment (IBR)
    If you don’t quite meet the criteria for forgiveness, you may be able to at least lower your monthly payments if you qualify for an income-based repayment plan. An IBR takes your income, family size, and a few other personal factors into account when calculating your monthly payments. Therefore, if your salary is on the low side – or if you are currently unemployed, a lower payment (which could be as low as $0) could be available to you if you qualify.

Private Student Loans

Private student loans are a bit more tricky. With private loans, terms may vary from one financial institution to the next. It’s best to check with your lender regarding any payment or refinancing options they may offer.  If none are available, shop around to see if you can find a lower rate elsewhere.

Personal Debt

If personal loans and excessive bills are coming in from all directions, a debt consolidation loan could be an option. If you qualify, a debt consolidation would allow you to merge debts from various lenders into one lump sum. Depending on the company, you may also be able to negotiate a lower interest rate than perhaps what some of your current loans or cards may carry.

How to Dig Yourself Out of Debt

The best way to prevent or overcome any debt issue is to create a budget and stick to it.

“There are all these assumptions about wealth – that those who have money must either be trust-fund babies or working high-paid jobs,” said Marsden. But in fact, he notes, “Recent surveys have found that most millionaires become wealthy because they don’t live beyond their means.”

To live within your means, set a budget you can afford. Here’s how.  Add up your monthly income and assign each dollar to your bills and necessities before making a new purchase. If your income isn’t enough to cover your expenses, eliminate any non-fixed bills such as cable, gym memberships, and entertainment subscriptions.

If payments are still an issue, it might be wise to research if a consolidation, refinancing option, or debt assistance service – such as the ones listed above, may be right for you.

Disclaimer: this is not a comprehensive list of all repayment, consolidation, and/or debt assistance options that may be available to you. Anytime you change or consolidate payments, additional term lengths and/or interest may be applied. Always be sure to check with your personal financial advisor to determine which options may be best for you.