YULEE, Fla. – The holiday season is a time of giving, but for many Americans, it’s also a time of spending—and that can lead to a heavy financial burden.
A new study found that 47% of Americans are still paying off debt from last year’s holiday season. That’s double the number from previous years.
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Many people are crediting inflation for their debts with 68% saying inflation is why Santa will be less generous this year.
Elizabeth Aciego from Yulee recently paid off $40,000 in debt. This holiday season, she said she’s learned from her mistakes.
“Unfortunately for us, it was a huge amount right off the bat, it wasn’t even small purchases,” Aciego said. “I do like to buy for all my people, so I would say that I probably buy more than I should, but I think we’ve been pretty smart since then.”
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Elizabeth turned to a local nonprofit for help with her debts. They worked with her creditors to slash her interest rates and better manage her money.
“It went from like a 19.9% interest to one of them was 1.9 and the other one was 0%,” Aciego said.
Thomas Nitzche with Money Management International (MMI) said their counseling services have seen a 63% increase in demand this year, as more Floridians struggle to get their finances back on track.
The best thing people like Elizabeth can do, he said, is reach out for help. The path to being debt-free starts with creating a spending plan.
“We don’t like the word budget, right, because that turns some people off, but we really want to understand what’s coming in, what’s going out, and what your priorities are, what your long-term goals are,” Nitzche said. “We look at income, assets, creditors, monthly housing and living expenses, and then put together a workable spending plan.”
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Once consumers have a plan for paying down debt, MMI counselors can work with creditors to reduce interest rates, on average, down to around 7%. Some can go as low as 0% to put you on a track to being debt-free within on average, four years.
If you need help, Money Management International offers free online debt counseling. Experts recommend budgeting ahead and avoiding unnecessary purchases this holiday season to stay financially healthy in the new year.