U.S. household debt just hit a staggering $18.39 trillion — an all-time high, after climbing by $185 billion in the last three months alone, according to the Federal Reserve Bank of New York. That’s a 1% increase from the previous quarter, with the biggest spikes coming from mortgages, auto loans, and credit cards.
Most of this increase came from housing-related debt, which jumped by $149 billion. But non-housing debt — like student loans, credit cards, and auto loans—also saw a $45 billion surge. Middle-aged Americans (ages 40–49) are carrying the heaviest burden, now owing over $4.8 trillion, while younger adults (ages 18–29) are least indebted at $1.1 trillion.
So what can you do to keep your head above water in this rising tide?
- Make a Budget (and Stick to It): Start by tracking every dollar coming in and going out. Use free tools like Mint or You Need A Budget to visualize your spending habits.
- Prioritize High-Interest Debt: Credit cards can have interest rates north of 20%. Focus on paying these off first, using strategies like the avalanche or snowball method.
- Refinance When Possible: If you’ve got a mortgage, auto loan, or student debt, explore refinancing options. Even a small rate drop can save thousands over time.
- Build an Emergency Fund: Life happens. A stash of 3–6 months’ worth of expenses can prevent you from turning to high-interest debt in a crisis.
- Avoid “Buy Now, Pay Later” Traps: These often sound helpful, but can lead to a cycle of unmanageable debt.
With U.S. debt levels climbing quarter after quarter, smart financial habits aren’t optional — they’re essential.
