Is it an income problem, a spending problem, or both?

I read a Forbes article today, “U.S. Average Credit Card Debt in 2026,” reporting that Americans owed $1.26 trillion in credit card debt at the end of the second quarter.

That gets your attention. But it doesn’t explain the full picture.

How much comes from job losses, living costs outpacing income, overspending, or a lack of financial knowledge? How much comes from keeping up with the Joneses? Or is it a little of everything? Those are different problems, and they don’t all have the same solution.

As a Realtor for several decades, I’ve seen many financial situations. A good income doesn’t always mean someone has savings. A beautiful home doesn’t tell you whether the owner can afford to replace the roof.

The spending changes, too. Years ago, the conversation was about daily Starbucks runs. Today, it might be Uber Eats, lavish vacations, destination weddings, or expensive events. Enjoying those things isn’t automatically irresponsible. The question is whether they fit your budget or leave you paying long after the experience is over. Sometimes there’s nothing lavish involved. Someone is working, paying rent, buying groceries, and keeping the car running. There simply isn’t enough left. Before judging the spending, understand the numbers. How much money actually comes home each month? How much do you owe? What does your life cost? What’s left?

Then ask: Is this an income problem, a spending problem, or both? Start with a written budget based on what you actually spend. Include monthly bills and expenses that arrive less often: insurance renewals, repairs, maintenance, and gifts. Look in both directions. Where can you cut? Where can you bring more money in? An extra shift, a side job once a week, or selling unused items might help. But selling things once won’t fix a shortfall that happens every month.

For credit card debt, paying the highest-interest balance first generally saves the most interest. Dave Ramsey’s debt snowball method starts with the smallest balance while making minimum payments on the others. Once it’s paid off, roll that payment into the next debt. Sometimes an early win helps you keep going.

Build a financial cushion, too, so the next flat tire doesn’t put you right back on the card you just paid off. Sometimes the bigger conversation is about housing costs, location, or the lifestyle your income can support.

Financial literacy starts with knowing your numbers and deciding what needs to change. The goal is breathing room.

I’m not a financial planner or a CPA. I’m a Realtor who has spent over three decades helping people buy homes, navigate decisions, and plan their next chapter. I’ve learned that the right home should fit your life and your finances. If you’re thinking about a move, I’m happy to help you look at both.

Adriene Pessel, Century 21 New Millennium
adriene.pessel@c21nm.com

Inspired by Forbes, “U.S. Average Credit Card Debt in 2026.” This article reflects my personal perspective and is for general information only, not financial or tax advice. Consult a qualified professional about your individual situation.