3 debt relief moves to make this July

As June comes to a close and July draws near, you may be considering ways to improve your finances. That's especially true if you're dealing with high interest debts like credit cards and personal loans. 

After all, the federal funds rate has remained at a 23-year high since late July 2023. And that means those with variable-rate debts may have been dealing with elevated minimum payments for almost a full year. 

But, this July, it may be time to act. If you're trying to pay off high interest balances and need relief, there are some timely debt relief moves you should make in the month ahead.

Get in touch with a debt relief expert for help with your debt now. 

3 debt relief moves to make this July

There are several things you can do to realize relief from mounting debt this July:

Stop spending

Every time you swipe your credit card to make a purchase, you're adding to the balance on that card - a balance that may accrue significant interest. 

"This summer is a great time to start a budget to help with debt relief or avoid future debt," explains Michael Broughton, founder and CEO of the credit building app, ALTRO. "The first question to ask when starting a budget is what money do you have coming in?"

Once you have the answer to that question, you should make adjustments to your spending to ensure that it doesn't exceed your income. Here are a few simple ways to cut unnecessary spending: 

• Make your meals at home: Meals prepared by restaurants typically cost far more than meals prepared at home. And, if you only save $5 per day on food, you're saving about $150 per month. 
• Make coffee at home: Coffee has a significant markup in coffee shops. In fact, making a cup of coffee at home will typically cost well under $1. But, buying a cup of coffee at your local coffee shop could easily cost $5 or more. So, brew your coffee at home for meaningful savings. 
• Cut the cord: Stop paying excessive monthly fees for cable television. Instead, take advantage of select subscription services that can give you access to the shows you enjoy at a fraction of the cost.  

Find out how quickly you may be able to pay your debt off with expert help now. 

Look to consolidation

The interest rate environment is expected to change soon. With inflation cooling, the Federal Reserve could reduce the federal funds rate. And if it does, interest rates on consumer financial products could fall. In fact, some financial institutions have already begun bringing consumer rates down. 

As a result, you may have access to loans you can use to consolidate your current high interest rate debts at a lower rate. And, doing so could lead to a meaningful reduction in the cost of your debts. Consider looking into the following borrowing options to consolidate your debt this July: 

• Debt consolidation loans: Debt consolidation loans can help consolidate your existing debts into one loan, often at a lower interest rate than popular alternatives. 
• Home equity loans: Home equity loans usually offer fixed interest rates and are backed by your home. And, since the home is collateral, their rates are usually competitive. 
• Home equity lines of credit (HELOCs): If you're going to take the home equity approach, a HELOC may be a strong option. These are lines of credit that are backed by your home. But, unlike home equity loans, they typically come with variable interest rates. And, with expectations that rate cuts may be ahead, a variable interest rate could reduce your future borrowing costs.   
• Balance transfer credit cards: "Take advantage of a balance transfer offered by credit card companies," says Jordan Mangaliman, founder and CEO of Goldline Financial Services, a financial planning and insurance firm. "This would allow you to take advantage of 0% interest for up to a certain number of months (typically 12-months)."
  

Pay attention to the market

It's also smart to keep an eye on financial markets. The next inflation report will be released on July 11. Continued cooling of inflation could result in lower interest rates ahead. If that happens, you may have more debt relief options to consider. And the Federal Reserve will meet at the end of the month. Any announcement that comes out of that meeting can affect what you owe - and how you pay it back. But you'll need to be proactive to quickly capitalize on any positive rate changes. 

The bottom line

If debt has you down, there are a few timely things you can do this July to work toward relief. First, stop any excessive spending that may be adding to your debt. Try to focus your spending on necessities rather than luxuries. Also, consider debt consolidation. As the interest rate climate continues to evolve, you may be able to find more affordable options. And, pay attention to the market. Even more opportunities to realize relief may be ahead. Get in touch with a debt relief professional to discuss your options now.