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Strategies to lower your debt and save money

According to a new study by Nerdwallet, the average American has around $155,000 in debt - an increase of more than six percent from last year.
Published: Feb. 25, 2022 at 2:20 PM EST
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InvestigateTV - Debt is something many Americans live with and for some it can be overwhelming. According to a new study by Nerdwallet, the average American has around $155,000 in debt - an increase of more than six percent from last year.

This same study found that revolving credit card debt is actually down almost 14-percent for most families which means you are likely paying about $100 less in interest payments throughout the year.

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

“Over the past two years, median incomes are down three percent, but the cost of living is up seven percent, so a lot of people are struggling to make ends meet especially as housing and medical expenses are up. These are necessary costs that everyone is facing,” Rathner explained.

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

“…And if you have student loans for example, those are still in forbearance and so you still have a few months where you can apply the money you normally would have put toward your student loans into other money goals,” Rathner added.

If you’ve budgeted as much as you can and you’ve cut expenses down to the bone, Rathner said it’s actually a great time to job hunt. She said increasing your income helps you pay down debt and reach those money goals faster.