Debt Management Strategies for Parents: How to Pay Off Debt While Supporting Your Family

Key Takeaways

• Consider updating your family budget to prioritize debt with the highest interest rate.
• If they’re old enough, get your children’s input to help you find expenses you can cut.
• Consolidating debt may help reduce your monthly payments and/or interest charges.
• An NFCC-certified credit counselor can give you personalized tips for paying off debt. 

Being a parent can make paying off debt really difficult. Between covering child care, groceries, and all the unexpected expenses that come with raising kids, paying off debt might even feel impossible. 

That’s one reason why, in 2025, 77% of parents reported being in debt, and 48% said their debt was unmanageable. 

Does that mean it’s impossible to pay off debt when you’re a parent? Absolutely not. While it may take some effort, a combination of spending cuts, earning more income, and/or some new debt management strategies, can help you start decreasing your debt.

Create a budget that makes room for debt payments

It’s easy for financial experts to say that you should pay off your debt faster. But doing it can be a difficult task. Where will the money come from? What expenses will you cut back on so you can pay off the debt?

While many people hate the idea of budgeting, creating a budget can help you answer these questions and reduce your debt. How? By letting you see all of your expenses in one place so you can make changes that are sustainable for you and your family. 

Here’s the process we recommend for creating a new budget and paying off debt:

1. Use a budgeting template or a spreadsheet that lets you compare your total monthly income to all of your monthly expenses. 
2. Calculate your monthly take-home pay and add it to the budget.
3. Review your financial statements (from your bank, credit cards and payment apps) to make a list of your average monthly expenses and make sure you don’t miss anything.
4. Look for expenses you can reduce, eliminate or put on pause while you’re paying off debt. For the biggest impact, start by examining your largest expenses first. You can also find tips for covering child care costs in our guide to making child care more affordable.
5. For any money you free up, note in your budget that it will go toward extra debt payments. 

Prioritize paying off high-interest debt

Many parents are unsure how to approach paying off debt. Sure, you can simply cover your minimum monthly payments, but with that approach you might not ever see your balances come down, especially if you have high-interest debt.

What is high-interest debt? It’s any account with an annual percentage rate (APR) above 7%. If you have credit cards, you likely have high-interest debt, since the average APR on credit cards is now over 22%. 

To better manage your debt, we highly recommend using this process to pay off your high-interest accounts first:

1. Make a list of all your debt accounts.
2. Place your debts in order from highest APR to lowest. 
3. Cover the minimum payments due on all of your accounts, but allocate your extra cash to the debt with the highest APR.
4. Once the highest-APR account is paid off, roll your extra cash over to the next account on your list.

This approach is also known as the debt avalanche method. By using it, you can potentially save thousands of dollars on interest charges and get out of debt faster. 

For example, if you have a credit card with a $7,000 balance, 22% APR, and a $160 monthly payment, and you cover just the minimum payment, it will take you more than seven years to pay off and cost you $7,267 in interest charges. But if you pay $300 a month on that card, you’ll pay it off in about 2.5 years and only pay $2,218 in interest. 

Get the whole family involved 

Don’t wait until you’re in the checkout line to let your children know your spending has changed. If they’re old enough, let them know you’re trying something new and ask for their input upfront. If they have a say in what’s happening, your children may be less likely to pressure you into impulse buys, like candy or toys.

Here are some ways to get your family’s support for cutting expenses and eliminating debt:

• Review your nonessential family expenses, such as dining out or entertainment, and ask for input on what can be cut or put on pause.
• Ask your children to brainstorm ideas for free or low-cost family activities. For example, you might have a weekly movie night at home instead of going to the movie theater.
• Teach your children to save money for some of the purchases they want to make for themselves. 
• Make a plan together for how you’ll skip expensive purchases. For example, you might batch-cook meals together on Sunday evenings so you can avoid buying fast food during the week.

Consider debt consolidation

Another way to make debt more manageable is through debt consolidation. Debt consolidation is the act of rolling multiple debt accounts into one new payment, ideally with lower interest rates, a lower monthly payment or both. 

Here are a couple of ways you can go about consolidating debt:

• Debt consolidation loan: Take out a personal loan and use it to pay off debt. This approach can be particularly helpful if you have good enough credit to qualify for a loan with a lower interest rate than your current debt. 
• Balance-transfer credit card: Balance-transfer credit cards often have introductory periods with 0% interest on the debt you pay off with the card. These cards can give you a temporary break from interest charges, but they can also be risky to use. Be sure you have a plan for paying off the debt before the 0% period ends, since your interest rate can skyrocket after that.
• Debt management plan (DMP): A debt management plan (DMP) lets you roll your credit cards and some other debts into one monthly payment that you send to a nonprofit credit counseling agency. Often, creditors will reduce your interest rates to 10% or less if you go on a DMP, and they may reduce your payments, too. One downside is that you typically have to close all of the accounts you enroll in your DMP, although you can request to keep one account open for emergencies.

If these options aren’t enough to help you manage your debt, you may want to carefully consider filing for bankruptcy. An NFCC-certified credit counselor can help you review all of your options and suggest the strategy that fits your situation the best.

Get debt support from a credit counselor

Still not sure how to tackle your debt? An NFCC-certified nonprofit credit counselor can help. When you meet with one of our counselors, you can get a full review of your finances and ask all of your questions about paying off debt.

Your counselor can help you create or update your budget, review your debt and suggest new payment strategies that fit your situation. In other words, you can get guidance from a financial professional instead of having to figure it all out on your own!

You can go online to schedule your appointment with an NFCC-certified credit counselor, or call 800-388-2227.