InvestmentNews reports financial anxiety looms, with 90 percent of Americans expressing concern about excessive financial burdens and insufficient resources to address them. Key barriers include high expenses (38 percent) and excessive debt (30 percent).

According to the CFP Board's "Debt and New Year's Resolutions Report," 97 percent of Americans plan to begin 2025 with financial goals. The top priorities include reducing debt (32 percent), saving for major purchases (21 percent), and retirement planning (14 percent).

Effective debt management begins with budgeting. InvestmentNews reports that some advisors recommend that clients keep housing debt under 28 percent of gross income, total monthly debt below 36 percent, and consumer debt under 20 percent of net income. 

Credit card debt poses a significant challenge due to its high interest rates. Jim Dickson, CEO of Elevation Point, describes it as "a bad carousel" that keeps people stuck. With rates as high as 25 percent, he advises paying off credit card debt first.

While not all debt is harmful — mortgages and car loans can boost net worth and credit scores — managing harmful debt remains critical. Dickson advocates for using technology, such as budget trackers, to analyze spending and build actionable financial plans.

The CFP Board report highlights that half of Americans with debt struggle to manage at least one type. Medical debt and high credit card debt are particularly difficult, with 70 percent and 60 percent of affected individuals, respectively, reporting challenges.

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