Aggregate American household debt rose to $266 billion in the first quarter of this year, according to a Federal Reserve Bank analysis. This imposing amount represents a 1.7% rise on 2021 final quarter figures and provides an alarming snapshot into the nation’s financial security. It also reveals why discussions around debt and the risk it imposes on American households have become so widespread. Covid-19 has left a stain on the economy.
Massive disruptions to health systems, the manufacture and supply of goods, and the devastation of large sectors of the employment industry have placed undue stress on many families. As the result, there is a pandemic of growing debt in America, that can have as devastating an effect as the health crisis from which we are recovering.
In Good Company – Debt Consultants
If you find your household debt to be overwhelming, visiting a debt consultancy company, such at www.freedomdebtrelief.com, is a great place to initiate your call for assistance. Freedom Debt Relief is a certified debt consultancy firm that provides debt consolidation programs.
Its consultants can have you regaining your economic freedom in as little as 24 months. As a proud founding member of the American Fair Credit Council (AFCC), the company is dedicated to ensuring the regulation of best practice across the credit advocacy industry.
Dialling Down Your DTI
Just prior to the pandemic, an overwhelming 71% of Americans were considered financially unhealthy or ill prepared for unexpected economic disturbances to their tight household budgets. A recent study revealed that the average American has around $29,800 in personal debt excluding mortgage debt, and that 34% of Americans’ monthly income is paid towards servicing debt.
The proportion of income directed towards debt repayment is also known as a debt-to-income ratio (DTI). In general terms, the lower your DTI the better. A certified debt consultant can carefully consider the extent and nature of your debt and plan to help you reduce your DTI. Options they may suggest include a debt consolidation loan, which can help transform high-interest debt, such as that incurred through credit cards, to lower interest debt, saving you money over time.
Symptoms Of Debt
Unsecured household debt can adversely affect a person’s health, with commonly associated symptoms including stress, anxiety, depression, and high blood pressure. These conditions may be acerbated where debtors are the victim of unfair lending practices, such as exorbitant interest rates and fees that haven’t been disclosed with full transparency.
Improving a household’s financial health, particularly the extent and structure of its debt, can have positive outcomes for physical and mental health. When you enroll in a debt relief program you are given an expected timeframe for when you could be debt-free, reducing stress by assisting you to envisage a debt-free future.
Trim Your Budget
Trimming your household expenses in one way to save some money that can be reapportioned towards debt repayments or your debt consolidation plan. One tip is to examine any insurance policies you hold, ensure you aren’t paying for unnecessary extras, and see if you can switch to a policy with lower premiums.
You can also take a careful look at your weekly grocery spend, you may be able to shave off some savings by switching to home brand items, buying in bulk, or taking advantage of any special offers. The more conscious you are in your daily spending, the easier it is to apply this same financial frugality towards debt repayments.
Managing a household budget will always be challenging, with pandemic-related stressors, new additions to the family, unexpected illness, employment changes, and other fluctuations in life circumstances, often causing you to slip further into debt. By encouraging more people to seek the professional assistance of a debt consultancy company, we can reduce the nation’s overall debt and the risk it imposes on American households.
