Strategies to reduce your debt and save money | News

(Gray News) — Debt is something many Americans live with and for some it can be overwhelming. According to new research from Nerdwallet, the average American is about $155,000 in debt, an increase of more than 6% from last year.

That same study found that revolving credit card debt is actually down nearly 14% for most families, which means you’re probably paying about $100 less in interest payments throughout the year.

Sara Rathner, personal finance expert at Nerdwallet, says any amount of savings is a good thing. The problem is that we are paying more in other areas of our lives right now.

“Over the past two years, median incomes have fallen by 3%, but the cost of living has increased by 7%, so many people are struggling to make ends meet, especially as housing and medical costs are rising, these are necessary costs that everyone faces,” Rathner explained.

Rathner said to combat all of this, start small and set aside some money to replenish your emergency savings, especially if you’ve dipped in the last year and a half, bring it up to $50 She said pull out your credit cards and see what the limits are, because that’s not ideal, but your credit limit can serve as a source of emergency funding if you’ve already exhausted your emergency savings.

“…And if you have student loans, for example, those are still outstanding so you still have a few months to apply the money you would normally have invested in your student loans to other financial goals” , Rathner added.

If you’ve budgeted as much as you can and cut expenses to the bone, Rathner said now is actually a great time to look for a job. She said increasing your income helps you pay off debt and reach your financial goals faster.

Copyright 2022. Western Mass News (WGGB/WSHM). All rights reserved.

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