Spring cleaning up your debt - how you can get your payments down and tackle it head-on
Now is the time to get your credit cards in order, check those interest rates, and possibly consolidate your debt to tackle it head on.
Non-profit credit counselors say they're seeing a 35 percent increase in demand from people needing help doing just that.
We met with one millennial mom of three who said her recent debt consolidation is life-changing.
With three little boys all under the age of four, Valerie Harper could use some caffeine, but she also needed help with her credit cards.
"It was the perfect timing for me, at least in my life at that point, because at the time I was already pregnant and couldn't work to help out my husband," said Harper.
She moved from Southern California to Hampton Township and said the bills quickly started piling up.
"My husband moved out here for a job opportunity, and at first it was great but then just life things that happened, our car needed new tires or our catalytic converter. Just big expenses you don't account for that end up putting you in debt!"
Her bank, Bank of America, suggested she reach out to Money Management International for a free consultation. Harper's just one of many in Pennsylvania reaching out for help.
"Pennsylvania is right behind the national average as far as year-over-year the number of people that we're seeing. It's up. Last year it was up about 30 percent over the year before, and they're coming to us with higher levels of debt. It's up about 6 percent year over year as far as the level of debt that they're coming to us with," said Thomas Nitzsche, financial educator, Money Management International.
Nitzsche says Harper's situation looks like so many others.
"So about one in three clients that we counsel engages with this long term in what's called a debt management program, like the client you met with, where we work with their creditors to reduce the interest rates on average, down to around 7 percent to get them on a path to being debt free on average, within 4 years," said Nitzsche.
Millennials like Harper now represent 43 percent of all new debt counseling clients at MMI, leading all other generations.
The average debt balance among millennials climbed to 30 thousand dollars in 2024.
Harper secured a plan to pay off her 17 thousand dollars of debt in four years, but she hopes to tackle it in two.
"So they consolidated all for me and I only pay 1 payment of 370, and they contribute it to all of the companies, and then if I have extra, I'm able to dwindle that large number in the end quicker," said Harper.
She now focuses on thrifting for her kids, shopping for off-brands at the grocery store, and finding free fun to keep the little ones entertained.
"There's nothing to be embarrassed about, just call and find out," said Harper. "There's definitely help out there, just do your research to make sure it's legit since I know there's a lot of scamming out there."
Money Management International is a nonprofit and it does take a small fee from its clients once it gets people on a debt management plan. That initial call and budgeting session is free.
