In financial planning, what does the term "debt management" entail?

Debt management refers to the strategies and practices that individuals undertake to effectively reduce, control, and manage their personal debt. This involves various approaches such as budgeting, negotiating with creditors, consolidating debt, and creating payment plans that prioritize paying down high-interest debt. The focus of debt management is to help individuals achieve financial stability by reducing their overall debt burden and minimizing interest payments.

The correct answer emphasizes the importance of these strategies in achieving financial wellness. Using effective debt management can lead individuals to a stronger financial position, allowing them to allocate resources toward savings, investments, or other financial goals instead of being overwhelmed by debt obligations. It is a proactive and practical approach to handling personal finances, aimed at fostering long-term financial health.