5 Steps for the Middle Class To Take Now To Get Ahead of the ‘Debt Bomb’

Younger Americans are facing a steep financial hill and are beginning their careers more in debt than ever. With record-high home and auto prices, hefty price tags on daily goods and huge student loans around their necks, it’s a tough time to get started.

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According to a recent GOBankingRates survey , nearly 25% of respondents believe it would take $75,000 for a middle-class family to live comfortably. Almost 33% of respondents said it would take $100,000, and another 15% believed it would take at least $150,000.

A big reason for these inflated numbers is that so many people have debt to pay off. If you feel like a “debt bomb” is controlling your life, here are some steps you can take to get ahead .

Money mistakes the super wealthy never make - that you might be doing now.

Make a Realistic Budget

You can’t escape your debt hole without understanding exactly how you got there. A realistic budget may be hard at first, but it provides you with an accurate accounting of all your income and expenses, exactly where you should start.

Massively overspending monthly rapidly sinks you into the depths of unmanageable debt, making chipping away at it impossible.

Getting your budget under control first and foremost should be your priority, painting a clear picture of whether you need to trim your expenses or if you need to boost your income — or both.

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Don’t Dig a Bigger Hole

You’ll never get out of debt if you keep adding to it. As the physician’s creed says, “First, do no harm.” All the financial planning in the world won’t help you if you continue to add to your outstanding balance every month.

Don’t buy something if you can’t afford it in cash. It’s a hard transition for some, but crucial nonetheless.

Don’t Bite Off More Than You Can Chew

Most Americans dream of owning their own home and car, along with a pricey dream wedding to boot. While having dreams and goals is great, each can be astoundingly expensive. Per Fox Business, the average American home is now $426,900, the typical car costs $48,644 and the average wedding comes in at $30,000 or more.

Those are some pretty hefty expenses. If you want to stay out of debt, be practical about what’s affordable. Consider a starter home for example, instead of your dream mansion. If you play your cards right, you can always upgrade when in a better financial situation.

The same is true with your car. You can save a bundle if you buy used, as you’ll avoid most of the new car depreciation.

For weddings, there are plenty of ways to trim expenses, from the time and location of your reception to the size of your guest list to the amount of work you can do yourself instead of hiring others.

Cut Back and/or Earn More

When it comes to debt, there are really only two ways out — cut back on your spending and/or earn more money.

You may simply be overspending your way into debt and a few simple trims can get you back on track. But in most cases, you’ll want to both boost your income and cut down on your unnecessary spending.

On the income side of the equation, you can ask for a raise, put in overtime, pick up a side gig or even change jobs for a larger paycheck. On the expense side, start with discretionary items like streaming subscriptions or eating out, then move on to more strategic efforts, like shopping at a different grocery store or using coupons.

Research Smart Debt Moves

One way to better manage your debt is by lowering costs as much as possible. See if you can snag a 0% balance transfer offer that can give you 18 or more months of no interest to help you tackle your debt.

If that’s not possible, see if you can refinance your debt to a lower rate, or negotiate with your lender to trim your rate.

Any way that you can reduce the cost of your debt is a help in terms of getting out of the hole faster.

This article originally appeared on GOBankingRates.com : 5 Steps for the Middle Class To Take Now To Get Ahead of the ‘Debt Bomb’