Financial stress among consumers will soon be at an all-time high, according to the National Foundation for Credit Counseling’s Q1 2026 Financial Stress Forecast. That’s due to high levels of consumer debt — the Federal Reserve recently reported that total household debt climbed to $18.8 trillion — and increasing cash-flow issues that are making it difficult to settle repayment. (See some of the best savings account rates you can get herefrom our ad partner Bankrate.)
“We are seeing a disturbing shift from discretionary debt to survival debt. When the financial buffer runs out, the climb in stress isn’t gradual. It’s vertical,” Mike Croxson, CEO of the NFCC, said in a statement. And the NFCC report simply states: “The consumer safety valve has finally broken.”
What’s the financial stress level in your home? McClary says you can look at it like this: “Financial stress isn’t about your income, it’s about your spend-ability. How much room you have in your budget to manage your financial obligations?”
If you’re facing bills you might not be able to afford, or climbing debt levels, here’s what to do now, according to experts.
Get help early, says NFCC’s McClary.
“When it looks like you might not make that next payment, [if] you’re having to let one bill slide in order to pay another — that’s the time you might consider the fact that trying to solve the problem on your own isn’t working and you need to get help from someone else.”
“Get on a consistent payment plan,” says Eric Mangold, FA, certified wealth strategist and founder of Argosy Wealth Management.
“Get on a consistent payment plan and try to send a little extra each month too. You can start by paying off the highest interest rate debt first. Some prefer paying the lower balances off first to psychologically give you a little boost. Paying off debt can feel like a mountain that is tough to climb but for most of us, it is one that we can summit, if we have the right plan.”
Create a personal financial statement and net worth statement, says Daniel Forbes, CFP and owner of Forbes Financial Planning.
“The No. 1 thing to do when facing a heavy debt burden is create a personal financial profile with a net worth statement and a budget. The net worth statement will list all assets and liabilities. Are there assets that can be liquidated or borrowed against to pay off high interest debt? The budget lists all income sources and expenses. Are there areas where expenses can be reduced and that extra income contributed towards outstanding liabilities?”
“Identify which debt poses the biggest risk to your immediate financial wellbeing,” says Alonso Munoz, financial adviser, CIO and founding partner at Hamilton Capital Partners.
“Not all debt is the same, and for folks in a ‘lot’ of debt, one of the first steps is to identify which debt poses the biggest risk to your immediate financial wellbeing. For example, missing mortgage or auto payments may have very different consequences than missing credit card payments, or student loans.
Debt always feels very overwhelming, and when unpaid, the interest rate can compound into an even worse situation. We find that folks stay motivated about paying down debt when it’s manageable, and consistent. This can include paying down or closing small balances, even if it’s a small portion of the overall debts.”
“Stop the bleeding and get clarity,” says David Adams, financial adviser, CPA, CFP, founder and CEO of Adams Wealth Partners.
“If someone is overwhelmed by debt, the No. 1 thing they should do immediately is stop the bleeding and get clarity. That means listing every debt — balance, interest rate and minimum payment — and building a simple, realistic monthly cash-flow plan. Most financial stress comes from uncertainty. When you can see the full picture, you can start making strategic decisions instead of emotional ones.
From there, I advise clients to focus on three priorities: 1. Protect stability first. 2. Lower the cost of debt. 3. Create a focused payoff plan.”
“This is a good time for a budget reset,” says Richard Barrington, independent financial analyst.
“This is a good time for a budget reset. If you’re relying on continuous borrowing to make ends meet, that’s not sustainable. Prioritize your debt. Make all the minimum required payments, but put any extra money towards the debt with the highest interest rate. That will give you the biggest bang for your buck because it will do the most to reduce future interest payments.
Keep your credit in shape. Make every effort to keep balances low and meet payment deadlines. Lenders have already started tightening credit standards. If the economy continues to worsen, they will only become more cautious. A good credit score can earn you lower interest rates when you borrow. It can also help you maintain financial flexibility by allowing you to continue to qualify for new credit.”
“Gradually build more sustainable habits to tackle your debt,” says Amy Powell, chartered financial analyst and founder of AimWell Financial.
“The hardest part of paying down debt often isn’t about math, it’s sustaining behavior change long enough for the numbers to work. When you have large amounts of debt, it can feel like the best move is to try and get rid of it as soon as possible. Unfortunately, doing so is a lot like going on a crash diet — effective at first, but then the rebound effect when you finally break can be worse than if you never started at all.
The better approach is to gradually build more sustainable habits to tackle your debt. Change just a few things at a time. When you cut one bill, for example, set up a system that automatically directs that towards your credit card or loan balances. As you get used to your new baseline, give it some time — andthenthink about where else you can make improvements.”
Develop “a clear understanding of your overall financial picture,” says Robby J. Graham, CPA, CFP and wealth strategist at Waddell & Associates.
“Developing a clear understanding of your overall financial picture allows you to assess whether each asset and liability is truly contributing value to your financial well-being. If certain assets are no longer serving a meaningful purpose, consider liquidating them and using the proceeds to reduce outstanding debt. Doing so can strengthen cash flow and create greater flexibility to accelerate your overall debt repayment strategy.
Approaching debt repayment with a thoughtful, big-picture strategy can provide clarity, restore a sense of control and help you move closer to achieving long-term financial independence.”