The Rising Tide of Consumer Debt

Written by Honor CU Guest – Greg Hildebrand, Honor Financial Group Financial Representative

We’ve talked a lot the last couple of weeks about ways to save money this time of year from back to school expenses to cutting costs in the kitchen.  The fact of the matter is, though, that this time of the year can be an expensive one for many families.  Consumers are borrowing again, making a big economic splash.  Spending does help the economy, but too much debt can harm you!  Here are four common areas of debt and some tips to manage them:

1.     Mortgage Debt: $8.05 TRILLION in debt nationwide!  Owning your own home is a huge accomplishment and is something you should be proud of.  Keep an eye on interest rates and consider refinancing at lower rates.

2.     Student Loan Debt: Over $1.08 TRILLION! As of a study completed by the Federal Reserve Bank of New York, this area of debt was the biggest percentage increase with over a 5% increase in the year prior.  If you have student loans try making payments sooner than your loans become due and try to pay more than the minimum amount to save on some interest.

3.     Auto Loan Debt: $863 BILLION!  Spending on items like a new vehicle helps you get from A to B and also helps the economy rise.  As you incur this debt, though, determine if you can make additional payments towards your principal amount to pay off your loan faster.

4.     Credit Card Debt: $683 BILLION!  Consumers are spending again using credit cards, but the good news is they are doing it more mindfully.  Make sure you are mindful of the debt you accumulate on your credit card and try to pay off higher interest rate cards first.  Consider consolidating credit card debt if you have more than one credit card to make your payments more manageable.     

 

If you have questions and would like to meet with a financial advisor, Honor Financial Group is a great first step.  Give us a call to set up an appointment today.  And, don’t forget to follow Honor on Twitter @honorcu!  Tweet us and let us know what you want to hear us talk about on Mason Jar Monday next week using #askhonorcu!

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