Americans are feeling the squeeze. Credit card balances have climbed past the $1 trillion mark in recent years, mortgage rates rose above 6 percent for much of the past two years, and personal saving rates have retreated from pandemic-era highs toward historically low levels. With federal student loan repayments restarted and price pressures still above pre-pandemic norms in many sectors, an increasing share of households report mounting financial stress — a dynamic that has implications for both family budgets and the broader economy.

A CBS News expert laid out a handful of pragmatic steps for households trying to stabilize finances. First, establish a clear, short-term cash plan that separates non-negotiable monthly obligations — rent or mortgage, utilities, insurance and minimum debt payments — from discretionary spending. Even modest reductions in variable expenses can free cash for higher priorities when margins are thin. Second, target high-interest debt. Revolving consumer credit typically carries double-digit rates, so accelerating payments on credit cards or arranging a lower-rate consolidation loan can reduce interest outlays and shorten the repayment timeline.

The expert emphasized building or preserving an emergency buffer. While pandemic savings rates were an outlier, most households today hold only a few weeks of living expenses in liquid form. Restoring even a small emergency fund reduces the chance families must resort to high-cost borrowing after a job loss, medical bill or major repair. Where possible, tap employer-offered benefits such as short-term disability, employee assistance programs, or retirement-plan matching before dipping into retirement accounts, which can erode long-term retirement security and carry tax costs.

For homeowners and potential buyers, the cost of borrowing matters. Rising mortgage rates have wiped out a portion of the purchasing power many had expected, increasing monthly payments and stretching budgets. The expert recommended exploring refinancing or modification options only when math favors the household after fees and remaining term are considered, and to shop multiple lenders for the best terms.

These household-level adjustments matter for markets and policy. When a growing fraction of income services debt rather than funds consumption, consumer spending — the engine of U.S. GDP — can slow, contributing to weaker retail sales and a drag on growth. That, in turn, influences monetary policy calculations; the Federal Reserve monitors labor-market tightness and inflation but also watches indicators of household balance-sheet stress as potential amplifiers of economic cycles.

From a policy perspective, the current mix of high household leverage and low buffers raises questions about the sufficiency of existing safety nets and the role of targeted relief programs in stabilizing consumer demand. Longer-term trends — elevated housing costs in many metros, stagnating wage growth for middle-income workers, and the resumption of loan payments paused during the pandemic — suggest the vulnerability is structural rather than temporary.

Households can blunt that vulnerability with disciplined budgeting, prioritizing high-cost debt, preserving liquid savings, and using employer and community resources. Small, sustained changes to cash management can reduce immediate stress and improve resilience against the next shock, with spillover benefits for the wider economy.