From increased credit card debt stressing Americans out to the Federal Reserve possibly nearing an interest rate cut, here is some news that could impact your wallet this week, and how you can prepare your finances for the week ahead.
Americans Are More Concerned About Their Debt
Several reports this week show more Americans are struggling with their debt. Many continue to add debt, yet they have become overwhelmed with balancing a volatile economy and high interest rates which make borrowing more expensive.
About six in 10 parents surveyed by National Debt Relief have gone into debt to pay for their child’s expenses, such as medical costs, back-to-school supplies, and holiday gifts. Many of these parents are stressed about their debt, which causes them to neglect their physical and mental wellness.
Another survey from Debt.com found the most common financial regret for Americans was creating too much credit card debt. Almost a quarter of adults said overspending on credit cards was their top regret; that number is up from last year’s survey.
What To Do Next
If you have more debt than you can manage, experts say you have several options for getting back on track.
Two of the most common are the “avalanche” method, which involves paying off debt starting at the loan with the highest interest rate, and the “snowball” method, which involves paying off the smallest loan first to gain momentum.
“Both strategies work. Don’t overthink it—simply pick the one that appeals most to you and get started,” CFP Benjamin Daniel told Investopedia.
Fed Chair Indicates An Interest Rate Cut Could Be On The Way
Federal Reserve Chair Jerome Powell delivered a speech Friday morning at the central bank’s annual Jackson Hole economic policy summit, indicating that an interest rate cut could be on the way.
Fed officials kept rates flat in July in their last meeting because of concerns that tariffs could spur inflation. However, a weaker jobs report could spur central bankers to cut rates at their next meeting in September.
What To Do Next
A potential cut in the Fed’s influential federal funds rate will likely bring down borrowing costs on all kinds of loans.
The indicated rate cut also means banks will begin to lower interest rates. That means yields on their offered investments, such as Certificates of Deposits and high-yield savings accounts, could be reduced soon, making now a prime time to lock in high interest rates on investments before a Fed interest rate reduction.
Your Chance To Comment On The White House’s Changes To Student Loan Forgiveness
The White House is now taking comments for its proposed rule, which could restrict who can qualify for the Public Service Loan Forgiveness program.
Under the rule, the Secretary of Education would be allowed to exclude employers who “engage in activities that have a substantial illegal purpose” from the student loan forgiveness program for public service workers, such as teachers, firefighters, and some nonprofit organization workers.
The proposal bans programs such as those that provide puberty blockers for transgender youth, which violate Federal immigration laws and constitute illegal discrimination. However, some advocates say the rule would allow the Department of Education to police the program based on the Secretary of Education’s subjective opinions of their work.
What To Do Next
If you have any comments about the proposed rule, you have less than a month to make them. The Department of Education will accept online submissions at regulations.gov until September 19, 2025.