Getting a handle on debt is one of the smartest moves to make for your financial health in 2026. Outlining how and when you’ll repay what you owe is the best way to spot trouble early and explore options if it feels overwhelming.
"Debt is an important part of understanding your financial reality, what your debt costs you, how it fits into your life, and whether it's helping you move forward or holding you back," said Mandy Kelso, Head of Financial Education at TD Bank.
Debt management means knowing the details of your credit, including interest rates on all credit cards and loans, the true cost of borrowing, and how your repayment schedule aligns with your budget and long-term goals.
"There's good debt and bad debt, and both play a role in financial health," Mandy said. "Sometimes people intentionally carry debt to build credit, improve a FICO score or create future opportunities. The goal doesn’t need to be to eliminate debt at all costs; it's to leverage debt wisely so it supports your life, not undermines it."
Below are some options to help get started.
Start with education
As a first step, ensure you are making informed decisions about debt. TD Bank offers financial education tools covering a variety of important topics, including a helpful module on Saying Goodbye to Debt.
Your employer might also offer helpful resources. Many larger companies provide courses on essential financial topics as well as free or affordable financial counseling services. If you work for a smaller business, are self-employed, or do not work outside the home, local and state websites often have information to help you find financial counseling options in your area. One resource is Find Help, a website featuring localized listings of social services, including financial education and counseling services.
Educational tools can help you understand various debt repayments strategies like:
- Paying off your smaller debts first, gradually working your way up to larger ones. This approach helps you gain confidence and momentum as you see your balances decrease.
- Tackling debts with the highest interest rates first. By prioritizing these accounts, you can reduce the overall amount of interest you pay, saving money in the long run.
Neither approach is right or wrong for everyone, Mandy said. "The right one is one you can stick with."
Debt plays a direct role in your credit score, which also affects your cost of living, from loan rates to utility costs to housing options. Understand how different types of debt are reported, which are secured versus unsecured, and which obligations, such as student loans, must be paid back in all financial circumstances. This knowledge will help you make informed and confident decisions about managing your financial responsibilities.
Credit card and personal loan options
Some credit cards provide balance transfer opportunities, allowing you to move existing debt onto a new card. If you currently have credit card debt with a high interest rate and are seeking to refinance at a lower rate, opening a card similar to the TD Flex Pay Credit Card.
which offers a long introductory promotional period for balance transfers, may be an option to create breathing room on payments, according to Scott Adamo, Head of U.S. Franchise Unsecured Lending.
Additionally, a personal loan such as TD Fit loans may also be a good option, if you carry substantial existing debt or are planning a major purchase.
"People are often not as aware of personal loans as they are credit cards, but personal loans often have lower interest rates and higher limits, making them a great tool for debt management," Scott said. "However, personal loans often come with higher monthly payments than credit cards, which can be a consideration for clients who might appreciate the payment flexibility offered by a credit card.”
Home equity loans
For those who own a home, another option to help improve their debt situation is to take a home equity loan to help pay off higher-interest rate debts. Jon Giles, Head of Residential Lending Strategy & Support at TD Bank, said that homeowners should consider the following:
- Consider the total costs: Too often borrowers focus on the monthly payment amount. While making sure you manage your budget appropriately is necessary, understanding the interest rate, fees and term of the loan is essential to make sure you do not pay too much over time.
- Avoid getting stuck in a cycle of debt: Developing a strategy to pay down or pay off your debt is key. Alongside this, create a long-term financial plan that helps you manage debt effectively. Once your debt is paid off, consider redirecting the funds you used for monthly payments toward savings or investments instead.
- Understand your budget: Take the time to fully understand your monthly budget. Ask yourself, “How much can I afford per month? " and “How quickly do I want to pay off my debts?” Answering these questions will help you make informed decisions and keep you on track financially.
What to do when it feels overwhelming
Managing debt is something we all should think about, according to Mandy. The key is to not stress until your debt stops working for you and starts getting in the way of your goals. Remember: you are in control of your financial journey!
"Debt becomes a problem when it creates constant anxiety, when it interferes with your long-term goals or when it pushes you into negative cash flow — meaning your debt keeps growing while your income stays the same. At that point, it's no longer a tool; it's a burden,” Mandy said.
If prioritizing and planning feels overwhelming, a second set of eyes can help. Certified financial counselors, often available through employers, nonprofit organizations and municipalities, can help you assess your situation without judgement.
One great resource to help find a certified financial counselor is the National Foundation for Credit Counseling (NFCC) which provides education and support in building financial management skills for individuals and small business owners.
Mandy suggested people be very cautious about unsolicited offers to help "fix your debt." Many are marketing schemes or worse.
"Always verify that a debt management or counseling agency is certified and reputable," Mandy said.
Preparing for the unpredictable
Even the most carefully planned budget can be unexpectedly disrupted by events such as a medical crisis, job loss, or unforeseen home repairs like a roof collapse. This is why emergency savings are an important part of managing debt. Setting aside funds for unexpected situations helps safeguard your financial future and provides greater peace of mind should a crisis occur.
"While three months of savings has long been the standard advice, many families need to consider saving a little more than that in today's economy," Mandy said.
If a crisis does hit, creditors may work with you to temporarily waive or adjust fees and payments if you ask. Each creditor has different policies, but it can be worth trying. A financial counselor may be able to help you navigate these conversations before things spiral further.
Debt does not define you
The most important thing to remember is that debt does not define you, and it is not hopeless, according to Mandy.
"With education, support and the right tools, you can take control, even when circumstances feel overwhelming," Mandy said. "Debt management is about options. Financial education helps you understand the different paths available to you, empowering you to choose the direction that best supports your progress. Sometimes, simply knowing you have choices can make all the difference."
You can find more TD Bank services and products at TD.com. We hope you found this helpful. This article is for informational purposes only and is based on information available as of January 2026 and is subject to change. Loans are based on individual financial circumstances and subject to credit approval. This content is not intended to be used or acted upon with respect to any client's specific circumstances. For specific advice about your unique circumstances, consider talking with your qualified professionals.
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©2026, TD Bank, N.A.
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