USBG Foundation Offers Tips on How To Tackle Debt

The USBG National Charity Foundation started off its first Instagram Live update of the New Year on Thursday, January 7 with tips for how to manage and reduce debt in 2021.

Two Ways to Reduce Debt

Volunteer board member Kim Haasarud explained that there are two philosophical approaches to reducing debt: Avalanche and Snowball.

reduce debt 2021


The Avalanche approach requires you to take a look at your entire debt portfolio and then attack the debt you pay the highest interest rate on first. You can do this by paying a little bit more than the minimum payment each month on this particular bill. Continue to pay the minimum balance on the rest of your debt. In the long term, you will save the most money. On the flip side, this isn’t the most gratifying method of paying down debt as you’re not eliminating entire balances.


This approach dictates that you attack the smallest balances first. You are able to completely pay off these smaller debts and get them off your record, which is gratifying. However, you won’t save as much money in the long term with this approach.

Little to No Income? Here’s What to Do.

Haasarud says there are still ways to save even if you don’t have a lot of money coming in. First, reduce unnecessary expenses by looking at your daily, weekly, monthly, and even annual costs.

Small, innocuous costs can quickly add up. Haasarud gave the example of picking up a coffee and breakfast every morning. It may only be $10 a day, but over a year, that $10 balloons to $3,650 a year.

Haasarud also recommended looking at weekly/monthly subscriptions you may have signed up for. Make sure you’re aware of every subscription you’re paying for and cancel any you don’t need.

If you’re looking to start saving a nest egg in case of unemployment or other obstacles, the rule of thumb is to save 20% of your post-tax pay. For example, if you make $35,000 after taxes, you should save about $7,000.

If that’s too much, remember that every little bit of savings helps. Start by trying to save $25 or $50 a month—you’ll find the total really adds up over the course of a few years.

Explore Your Options

It’s also important to look ahead to the future—especially if you’re unemployed or may be looking to make a job change. One thing to do is to work on expanding your skill set. Consider taking classes in photography, graphic design, or any other interests you have.

Employers will be looking for many different skills after COVID-19, and you make yourself more marketable when you learn an additional skill set. Haasarud herself says she’s currently taking the time to learn Spanish.

Tap Into Your Network

Pursuing new opportunities or jobs? Look for partnerships, ask around, and lean on your network to find new prospects.

By Ashley Bray