Aug 12, 2025
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It’s no secret that America’s household debt has been climbing — but the latest data on student loans is still startling.
According to the New York Fed’s latest Quarterly Report on Household Debt and Credit, student loan balances rose by $7 billion in the second quarter to $1.64 trillion. More concerningly, the share of loans entering serious delinquency — defined as 90 or more days past due — jumped to 12.88%, the highest level in 21 years of data.
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As the chart shows, the surge was sharp. Delinquencies have been rising since the start of the year, when the government ended a years-long payment pause for student loans and missed payments began hitting borrowers’ credit reports again.
Still, student loans represent only a portion of the financial pressure facing American households. In Q2, total household debt rose by $185 billion to reach $18.39 trillion. Mortgage balances surged $131 billion to $12.94 trillion, credit card balances climbed $27 billion to $1.21 trillion and auto loan balances rose by $13 billion to $1.66 trillion.
All of this is unfolding against the backdrop of high interest rates and a cooling job market. The Bureau of Labor Statistics recently revised its data, cutting U.S. employment figures for May and June by a combined 258,000 jobs — a sign that households may be more financially fragile than they appear.
With debt levels climbing and financial stress mounting, it’s more important than ever to keep a close eye on your spending. Even small savings on everyday essentials can add up — and help free up cash for paying down debt or building a financial cushion.
Cut waste from your spending
If you want to improve your finances, the first step is understanding where your money goes each month. But trimming waste isn’t just about skipping lattes or takeout. Even in essential categories, you may be spending more than necessary. The good news? With a bit of research, those costs can often be significantly reduced.
For instance, car insurance is a major recurring expense and many people overpay without realizing it. According to Forbes, the average cost of full-coverage car insurance is $2,149 per year (that’s $179 per month).
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However, rates can vary widely depending on your state, driving history and vehicle type and you could be paying more than necessary.
By using OfficialCarInsurance.com, you can easily compare quotes from multiple insurers, such as Progressive, Allstate and GEICO, to ensure you’re getting the best deal.
In just two minutes, you could find rates as low as $29 per month.
Meanwhile, home insurance is another major expense where smart shoppers can save big.
With OfficialHomeInsurance, comparing home insurance rates is fast and hassle-free. Just enter a few basic details and the platform will instantly sort through over 200 insurers to find you the best deals available in your area.
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You’ll be able to review all your offers in one place and quickly find the coverage you need for the lowest possible cost, saving an average of $482 a year.
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Put your spare change to work
One of the easiest ways to cut financial waste is by putting your spare change to work instead of letting it idle. That’s where micro-investing apps like Acorns come in.
When you make a purchase on your credit or debit card, Acorns automatically rounds up the price to the nearest dollar and invests the difference. The coins that would wind up in your pocket if you were paying cash are automatically invested in a diversified portfolio of ETFs.
Buying a coffee for $3.40? The app rounds it up to $4 and invests the extra $0.60. Over time, those small amounts can add up — especially if you’re consistently spending and saving.
It’s a simple, set-it-and-forget-it way to build wealth from money you might not even miss — and, if you sign up today, Acorns will add a $20 bonus to help you begin your investment journey.
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Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.
