How to create a debt management strategy during major life transitions

By Willa Tellekson-Flash | Published on November 21, 2025

)

Major life transitions can have a significant impact on your finances—especially when it comes to managing debt. Whether you're getting married, changing careers, navigating a divorce, or experiencing another significant life shift, it’s easy for financial stress to creep in. The key to staying on track is a proactive and adaptable debt management strategy.

Here’s a simple framework for creating a debt management plan that can be tailored to any major life event:

Assess your current financial situation

Before adjusting your debt strategy, take stock of your overall financial health. This includes reviewing your debts, income, and expenses.

• List out all existing debts: Write out the balances for any credit card debt, student loans, car loans, and other financial obligations.

• Review your income: Consider how any life transitions will affect your income. Whether it’s a promotion, career shift, or reduced hours for you or a partner, understanding this change is key to adjusting your repayment strategy.

• Understand your expenses: Look at both fixed and variable expenses to understand how much room you have for debt repayment.

If you’re getting married, this is an important step to complete with your partner. While debts brought into a marriage are considered separate, having a clear picture of both of your finances will help you align on financial priorities moving forward.

)

Prioritize your debts

Once you have a clear understanding of your financial situation, choose a repayment strategy that works for you. The two most popular debt repayment strategies are the debt snowball method and the debt avalanche method:

• Debt snowball method: Prioritize the debts with the smallest balances first, while continuing to make the minimum payments on all other debts. This method aims to eliminate smaller debts quickly, creating a sense of momentum to help you pay off larger ones.

• Debt avalanche method: Prioritize your debts with the highest interest rates to minimize the amount of time that interest is compounding, while consistently making the minimum payments on other debts. This method typically will save you the most money over time, but may not deliver the same psychological satisfaction.

Adjust your repayment strategy

Your next step is to adjust your repayment tactics based on the changes to your financial situation. Here are a few strategies that may benefit you across multiple scenarios:

• Set a budget: Carve out the funds necessary to make your monthly payments by creating a budget. This may be particularly valuable if you’re navigating a change in income, and need to be especially mindful of spending.

• Consolidate debt: Consolidating multiple debts into one can simplify repayments and reduce financial stress.

• Refinance loans: Not all student loans qualify for consolidation, but you can still consider refinancing to help lower interest rates and monthly payments. If you’re going through a divorce, refinancing loans may be your best option to remove yourself as a cosigner for your former spouse’s debts.

• Negotiate payments: If you’re facing a financial strain, you may be able to ask for more manageable repayment terms. Negotiating medical bills, applying to defer loan payments, or asking for relief from credit card debt may all be available options to you.

• Set up auto pay: Setting up automatic payments ensures that your bills are paid on time, which can give you one less thing to think about during stressful life transitions and help you avoid late fees. Some lenders, like Earnest, even offer a discount on interest for borrowers with auto pay enabled.

Leverage available tools

Managing debt during life transitions can be overwhelming, but there are tools available to help make the process easier. Earnest’s debt management tool, for example, helps you create a personalized repayment plan and manage your debts in one place, making it easier to stay on track.

Revisit your plan regularly

Life events can change your financial situation at any time, so it’s important to revisit your debt management strategy regularly. Any time that you experience a sudden change in income, new expenses, or significant changes to your life situation, you may want to adjust your repayment plan.

Life transitions are a natural part of life, but they don’t have to derail your financial plans. No matter what life event you’re going through, Earnest’s debt management tool can help you work towards financial freedom. Whether it’s student loans, credit card debt, or medical bills, this tool empowers you to stay on track and pay off your debts faster.

)

About the Author

Willa Tellekson-Flash

Willa Tellekson-Flash is a freelance writer and product marketer specializing in finance and technology. With 10 years of experience, she focuses on making complex personal finance topics accessible and empowering for all audiences. When she’s not writing, you'll likely find her training for her next marathon.

Disclaimer

This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.