Does inflation get you down? 3 tips to control anxiety

3. Be strategic with your credit card debt.

During periods of high inflation, don’t rely too much on credit cards. The average American has more than four credits (opens in a new tab)and the United States just hit an all-time high of $930 billion (opens in a new tab) in credit card debt.

Depending on your credit score and how responsibly you use your cards, I recommend having no more than three to five credit cards. Anything more than that can be hard to follow and makes it easier for you to sink into a hole. If you’re only making the minimum payment, it could take months or years to pay off your debt and get out of that hole.

When tackling your debt, there are two popular methods: the avalanche method and the snowball method. With the avalanche method, you are encouraged to tackle the debt with the highest interest rate first. This helps eliminate the debt that is costing you the most money. This is a great method for those with high interest debt such as credit cards.

The snowball method encourages you to pay off the debt with the smallest balance first. Once the first debt is paid off, he takes the money he was putting down and starts paying off the next smaller debt. Like a snowball rolling downhill, this method helps you build momentum until all debts are paid off. Regardless of the method you choose, he continues to pay his other debts while he works to pay them all off. Another strategy to deal with debt is debt consolidation. (opens in a new tab). This is where you transfer all of your debt in one payment. Having just one monthly payment for all your debts can help you get a lower interest rate and pay off those debts faster.

Do not panic

Now more than ever, it’s important to plan ahead for your golden years. No matter how close you are to retirement, being prepared for unforeseen circumstances like inflation will help you live the retirement you’ve always wanted.

A financial professional can help you create a comprehensive retirement plan that meets your specific goals and needs.

This article was written by and presents the views of our contributing advisor, not the Kiplinger editorial team. You can check the advisors’ records with the SEC (opens in a new tab) or with FINRA (opens in a new tab).