When people say money causes them stress, most of the time they're more concerned about their debt. Debt is a stressful topic because people feel like it is out of their control. It can be easy to look away or ignore financial situations, but money is a tool that can and should be used to create opportunities.

Building a debt management plan is one effective way to manage money stress and improve financial and personal well-being.  While there are some helpful tools to help manage and pay off debt, there’s not a one-size-fits-all solution. There are so many considerations that should go into debt management plans—where a client lives, their family life, their hobbies—which means working with someone that understands circumstances, lifestyle, values, and priorities can be extremely beneficial.

Getting set up with a debt management plan won't suddenly open the floodgates of income, but having a clear understanding of where one’s standing and the caliber of professional support makes the process less daunting and more efficient.

When trust comes in

We’ve all become more cautious and more doubtful of what we see and what we hear, and not just because of the internet. The banking industry, notably, saw a sharp decline in consumer confidence after the Great Recession in the first decade of this century. In the decade that followed, consumers continued to lose confidence in the banking sector, both before and after the pandemic. Overall, less than one in five consumers feels confident in big business.

Studies show consumers crave a personal connection with the brands they trust, and that certainly applies to something as personal as finances. Where do customers who need a trustworthy financial partner look if they don't trust big businesses? The answer is closer than you think: bank locally.

Community banks and credit unions have earned their reputation for their personalized service. This includes sitting down with individuals, sorting through their obligations, and helping them make the best choices so they can take control of their finances. They understand contexts in a way a tool or even larger bank may not, because they know when local supermarkets have raised their prices and know the schools clients’ kids go to. They know how expensive it is to live where customers live.

Understanding finances

Finances are complicated and getting out of debt is way harder if we don’t understand our personal circumstances.  Feeling overwhelmed and not having enough information is the number one reason people put off dealing with their debt.

From day-to-day expenses to long-term budget forecasting, financial literacy is crucial for managing these factors, to not only get out of debt but prevent falling back into it.  Rather than a basic skill, fostering a growth mindset and embarking on a lifelong journey of financial literacy helps clients ensure they’re prepared for each stage of life. There is no “arriving,” as the financial landscape is consistently changing. Imagine someone thought they had a firm grasp in the 90s or early 2000s, so they stopped expanding their knowledge base. Today’s financial world would be completely baffling.  

Ultimately, the trusted customer services available at community banks empower consumers to take back financial control through knowledge.

Whether paying off student loans or credit card debt, helping clients know they can and will one day have no debt can be a freeing feeling. Working with someone that knows you while having a clear understanding of your personal circumstances are key in achieving that freedom.