TAMPA, Fla. — Millions of Americans are more in debt after the holidays.
“We’re at record levels of debt in America and credit card debt hit a record high of a trillion dollars,” said George Kamel, personal finance expert and Ramsey personality.
About 25% of people are still paying off holiday debt from Christmas of 2022, that’s according to a recent WalletHub survey.
“They’re still trying to pay those bills. We know with inflation and groceries and everything else we got going on the last thing we need is to look backwards,” said Kamel.
That’s why financial experts believe it’s crucial people take charge of their finances and make a plan to get ahead.
“Start to think about what you spend. Take a look at your credit cards,” said Leslie Tayne, financial attorney and credit and debt expert.
“If you continue to just make minimum payments, that’s not going to get you out of debt anytime soon. In fact, if you just make the payments, you could be making those payments for 20-30 years,” she added.
Sit down and look at your income. After you take inventory of your bills, make a budget to see how much money you actually have, track you spending, and figure out where you can cut back.
After that, experts suggest building up an emergency fund.
“Getting $1,000 in a savings account is the first step to kind of start to get ahead with money,” said Kamel.
Once you’ve done that, it’s time to really commit to paying off consumer debt.
“There are so many different methods to get out of debt and they all work but they have to work for your particular circ*mstances,” said Tayne.
One of those tactics is using the debt snowball method.
“That means listing out all of your debts, regardless of what kind it is, smallest to largest, and attacking the little one with a vengeance and making minimum payments on the rest,” said Kamel.
Some experts also suggest looking into ways to add extra income to your household.
“So that you can use extra income to pay down debt. Side gigs, other types of jobs are opportunities to do that,” said Tayne.
And lastly, they recommend committing to stop using credit and mindlessly swiping your card.
“The key to all of this is we’ve got to stop the overspending. If it’s not in the budget, which means if we can’t afford it today with our own money, we’re not going to buy it,” said Kamel.
“You are a rat in the maze when you swipe that card and the best way is to opt out and go 'I’m not doing it.' That’s why I wrote my book, 'Breaking Free From Broke,' I have whole chapter on credit cards to help people unpack the reasons they use them and help them live without them,” he added.
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