If you find yourself with higher credit card balances or more bills, you’re not alone. Total household debt in the U.S. has risen for the 19th straight quarter according to the Center for Microeconomic Data at the Federal Reserve Bank of New York. To get perspective, consider that consumer debt in the first quarter of 2019 was nearly a trillion dollars higher than its previous peak in the third quarter of 2008 – in the throes of the Great Recession.
But there’s good news, too.
With the unemployment rate dipping to 3.6% in April and other positive economic indicators, it’s a great time to review your debt and spending. And doing so can help protect you when personal and national economic shifts occur. There’s no downside to limiting debt or eliminating it entirely. And it can be done.
Consider viewing your financial picture in a different light:
- Working to improve your current and future financial situation doesn’t have to be a complicated process full of self-scolding and deprivation. In fact, the kinder and simpler, the better.
- Take some time to review your own situation: Has your personal debt gone up over the last few years? Have new or large expenditures been made by choice or necessity?
- Is there any service, subscription or other expense that you can dial back – or live without? Look for recurring charges – however small – and cancel everything you don’t need.
- Call credit card companies you do business with and ask them if they will reduce your interest rate.
Look at your non-housing debt and find out if you can roll any of it over, using a low or zero-interest offer. But be careful and deliberate; those offers are limited to specific time periods after which interest (often high) will be charged if the balance isn’t paid off.
Stop debt from running rampant in your personal finances. Drop waste wherever possible and roll back the tide of compound interest by seeking lower rates. Taking a proactive approach to what you spend – and why – will keep your financial future from going up in flames!
Center for Microeconomic Data – Federal Reserve Bank of New York, U.S. Bureau of Labor Statistics