Six Tips to Help Manage Debt – and Maintain Financial Health

By Key Bank, Special for  USDR

Financial health doesn’t require living debt free. According to the Consumer Financial Protection Bureau, there is nothing wrong with having debt as long as you manage your debt responsibly and are not overwhelmed by the amount of debt you’ve  accrued.

The tipping point varies when it comes to managing debt and having debt manage you. Generally speaking, however, it’s best to have a low debt to income ratio, or DTI. DTI refers to the percentage of debt – your total monthly loan payment – to your monthly income before taxes.  You should aim to keep your DTI at 40 percent or less, particularly if you want to qualify for a loan with low interest rates.

Feel as if you’ve past your personal debt tipping point? KeyBank has some suggestions to help you regain your  balance:

  1. Scrutinize your spending habits, focusing on what you buy because you want it, and not because you need it. Consider how often you use credit to buy those extras, and whether you should reserve credit cards for major, significant purchases you can pay off promptly.
  2. Create a budget, and stick to it. Consider tapping online and mobile banking  tools that make it easy to check account balances and transactions.
  3. Regain control of credit card debt with a debt elimination plan so you make steady progress toward reducing card debt. Tackle your high interest cards or your low balance cards and pay as much as you can on those cards while making minimum payments on other, lower interest or higher balance cards.
  4. Consider debt consolidation and talk to your banker about your specific situation; consolidation might increase the amount of time and money spent to eliminate debt. Once you’re comfortable with your credit card account balances, pick one card to cover unexpected necessary expenses and pay cash or use your debit card for the rest.
  5. Build an emergency fund so you can choose between tapping credit or your emergency fund for unexpected major expenses. Allocate extra income – a bonus or pay increase – toward eliminating debt or boosting your emergency fund.
  6. Be patient.  Regaining control over debt takes time. But the wait is worth it.

This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal  advice.

About KeyCorp

Key traces its history back more than 160 years and is headquartered in Cleveland, Ohio. One of the nation’s largest bank-based financial services companies, Key has assets of approximately $93 billion. Key (NYSE: KEY) provides deposit, lending, cash management and investment services to individuals, small and medium-sized business under the name KeyBank National Association. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade  name.

For more information about Key, visit, or follow Key on Twitter at @KeyBank_News and @KeyBank_Thrive.

Banking products and services are offered by KeyBank National Association. is a federally registered service mark of KeyCorp. ©2015 KeyCorp. KeyBank is Member FDIC


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