7 smarter debt steps to start the New Year

The New Year often comes with familiar money advice: cut more spending, build a stricter budget and stick to it.

But for many households, that advice does not reflect reality.

One-in-three consumers (33%) have more debt than they can manage and nearly half (48%) say they cannot realistically reduce spending on expenses like bills and utilities, according to a recent survey by the Achieve Center for Consumer Insights think tank. When there is little left to cut, extreme budgeting is neither realistic nor sustainable.

A financial reset is not about perfection. It is about clarity, structure and making progress easier to maintain. With that in mind, Achieve has seven practical tips to reset your finances in the New Year without resorting to extreme budgeting.

1. Take a quick financial snapshot

Skip the full budget for now. Start with a clear picture of where you are today.

Write down:

• Your monthly take-home pay

• Your required expenses

• Each debt balance, interest rate and minimum payment

Why it matters: Debt feels heavier when it’s unclear. Seeing everything in one place replaces uncertainty with facts you can work with.

2. Separate expensive debt from more predictable debt

Not all debt behaves the same.

High-interest, revolving balances tend to grow quickly. Fixed, structured debt is often more stable month to month. First, focus on the debts that cost you the most each month, not the debt that feels most frustrating.

Why it matters: Reducing interest costs often creates more progress than cutting spending alone.

3. Build a baseline spending plan you can live with

Many budgets fail because they demand too much change at once.

Instead:

• Lock in non-negotiables like housing, utilities and groceries

• Choose one flexible category to adjust

• Leave room for real life

This approach reflects how stretched many households already are. Achieve’s research found that 27% of consumers reduced spending on basic needs such as food, clothing or housing in the past three months because they couldn’t afford their debt obligations.

Why it matters: A plan you can maintain is far more effective than one you abandon by February.

4. Lower the cost of your debt before trying to out-budget it

When debt feels hard to make progress on, cutting small expenses often is not enough.

A reset means looking at whether the structure of your debt is working against you. That can include:

• Consolidating multiple balances into a single payment (for example, through a personal loan or a structured debt program)

• Refinancing certain balances when credit and income allow

• Creating a clearer payoff path with support from a reputable expert

The right approach depends on your financial picture. The goal is not finding a perfect answer. It is reducing unnecessary financial drag.

Why it matters: When debt costs less and feels simpler, progress becomes easier to see and sustain.

5. Address behaviors that signal financial pressure, not failure

When money is tight, people make tradeoffs to get through the month. That is not a character flaw.

According to the Achieve Center for Consumer Insights, in the past three months:

• 16% of consumers increased their credit card balances

• 12% pulled funds from emergency or short-term savings

• 11% delayed or did not receive medical treatment

• 10% skipped monthly payments

Consumers said these behaviors were a result of not being able to meet certain debt obligations.

Reset move: Identify one pressure point, such as a due date that causes cash-flow issues, and address that first.

6. Automate one small win

Automation removes decision-making from moments of stress.

Choose one:

• Automatic minimum payments

• Automatic transfers to savings

• Automatic extra payments toward one targeted debt

Why it matters: Automation protects progress when motivation dips or life gets busy. Even small amounts count.

7. Redefine progress and set a 30-day check-in

Progress does not have to mean being debt-free. Choose one measurable goal:

• Reduce a revolving balance

• Pay off one account

• Avoid adding new debt

• Stay current on all payments

Set a check-in for 30 days and reassess again at 60 days.

Why it matters: Momentum is built through small, repeatable wins, not all-or-nothing resolutions.

A final thought

If traditional budgeting has never worked for you, the data suggests you are not alone. Many households are already operating with limited flexibility.

A financial reset is not about cutting harder. It is about making your financial life simpler, more predictable and easier to sustain over time.