PHOENIX — Right now, Americans now owe a collective staggering $1.13 trillion dollars in credit card debt alone, according to the Federal Reserve Bank of New York.
And the unfortunate truth is that it’s only getting worse with time.
But by making some changes, one Valley woman was able to reverse her spending habits.
Arizonans might be struggling with rising interest rates and leaning on their credit cards more these days, but as one East Valley mom found out, eliminating debt is possible with the right mindset.
“It’s just kind of an eye opener to step back and realize where you’re overspending,” said Angelica Baeza, a mom of five from Mesa.
She knows all too well how fast expenses can add up.
“Oh absolutely, when you really start to dial in on what you’re doing and where you’re spending money, it adds up quickly,” she said.
That daily coffee can get costly.
“Close to maybe $200 a month,” said Baeza. “When you tally that up over the year, it’s at least two grand.”
And every time you eat out, that’s more money you’re not putting into your savings.
According to US Foods research, half of Americans spend less than $20 per person when dining out.
Over the course of the month, US Foods found Americans spend an average of $166 per person going out to eat.
“It’s self-sabotage, the idea of treat yourself… you have a hard day at work and you’re like oh I’m going to go do this, I’ll treat myself,” said Baeza. “…but realistically what are you doing at the end of all of that… the treating yourself, it kind of gets out of hand.”
She said in that case, what you’re really doing is hurting yourself from what your goals are.
“People are realizing that because we didn’t have financial education and help in our younger years, we’re struggling even more with debt now,” said Rachel Caballero, who has been with TruWest Credit Union for almost 18 years.
In Caballero’s line of work, eliminating debt is something that comes up often.
“Understand how to recognize their triggers,” she said. “…recognize their financial stressors and recognize how they can identify the spending leaks that they have so that they can plug them.”
Caballero said understanding your debt, creating a budget, choosing a strategy, and increasing your income while reducing debt are all key to staying motivated.
In Angelica’s case, when student loans were due earlier this year, she had a conversation with her husband and they asked themselves a question:
“What if one of us got laid off,” she said. “What would that look like?”
She said it was then they got serious about eliminating debt. They started eating out less and being more disciplined when it comes to splurging.
“…really just trying to stay focused on what that goal is and writing it down if you need to,” said Baeza. “…and I’ve been listening to podcasts to try to just keep me in the right frame of thinking.”
Since the beginning of the year, they’ve saved a lot.
“It’s thousands of dollars truthfully,” she said.
So, if you’re intentional about it, she said it is possible to eliminate debt.
“Absolutely, if there’s a will there’s a way,” said Baeza.
When it comes to saving more as parents, she said they try to buy things second-hand and they have been reselling baby gear, the car seats and play pens as much as possible – the items you only need for a short period of time in the grand scheme of things.
For more ideas on how to manage credit card debt, go to this website.