A big part of the problem is that most Americans now have way more personal debt than ever – in large part due to society and the government encouraging people to spend more and more and take on tons of cheap credit while interest rates were low. But now that interest rates and the cost of living are rising, without any increase in salaries, average Americans are being squeezed more than ever. If not properly addressed, this could lead to a cascade of personal bankruptcies, repossessions, and home foreclosures – all of which have a massive knock-on effect throughout the economy. It’s easy to feel helpless watching this all unfold, as we have no control over government policy or the wider economy, so what can be done to ensure your family’s financial well-being is protected?

The most important thing that anyone can do when the economy flashes warning signs the way it is right now, is to reduce your debt as soon as possible. As things get worse, paying down debt will become increasingly more difficult, and as hard as it may seem today, tomorrow maybe even worse so it is urgent to act quickly. This means paying off high-interest debts such as credit cards, payday loans, and overdue bills. For those with high incomes or the ability to cut back on living expenses, this can be done with some budget adjustments. For others, the solution may lie in a different approach.

Many people don’t know that many types of debt can be negotiated in situations where you are facing financial hardship. Even in cases where that is not possible, you can often replace multiple high-interest debts with a single lower or no-interest loan to help break the cycle of being stuck endlessly paying interest rates and unable to meet your basic needs. Everyone’s situation is different, so we recommend speaking to an expert advisor about your options to determine the best plan for your family’s financial future.