Buried in debt? Here's how to dig yourself out

Americans' debt load has risen nearly 23% since 2013 despite record stock gains and low unemployment.

Household debt totaled almost $13.7 trillion in the first quarter, with credit cards, auto loans and home-equity loans accounting for 18% of that figure, according to the New York Federal Reserve's Quarterly Report on Household Debt and Credit. One could argue mortgage debt (68% of all debt) and student loans (11%) are relatively innocuous because they are leveraged to rising real estate prices and higher salaries over time, but the drag created by everyday spending on cards and cars hurts futures in several ways.

For families who barely make enough income to pay basic needs, it completely crowds out their ability to save.

Even families who have the capacity to manage debt and savings at the same time often don't do it, experts said, because significant debt is a psychological barrier to long-term savings.

Meanwhile, the problem appears to be getting worse. The percentage of seriously delinquent credit card balances has increased steadily since 2016.

If your own debt levels are threatening to ruin retirement, it's time to act:

• Mind the first rule of holes. As the old saying goes, when you are in one, stop digging. Yes, this means putting an end to card use, at least until the highest-interest cards are paid off or your debt-to-income ratio is under control. To calculate your ratio, divide take-home pay by your total nonmortgage debt. Eventually you want this percentage to be zero, but aim for 10% to 12% for now.

• Beware of certain "helpers." Last month, the Consumer Financial Protection Bureau filed a federal complaint against a handful of credit-repair companies, including CreditRepair.com, alleging the firms required upfront payments for services, contrary to laws requiring that repair companies document success before requesting payment. Regardless of how this case evolves, be skeptical of any for-profit credit-repair or debt-management service. Many communities have free or low-cost services through nonprofit agencies. Check out the National Foundation for Credit Counseling at nfcc.org, and don't fall promises to make your debt disappear. It won't.

• Set a new budget. In a perfect world, we are all saving 15% of gross pay for retirement and another 10% or so for shorter-term goals. This isn't realistic for people with substantial debt, but setting out some kind of overall plan is important. Divide your gross pay into four equal buckets ­— housing, taxes, savings and everything else. Include, for now, debt payments in your savings bucket. Over time, more and more of that bucket will go toward your future.

• Get the match. Most experts suggest contributing enough to an employer savings plans to at least get the full company match. If your employer doesn't match any contributions, aim for a few percentage points of pay. Next time you get a raise, put half of it toward retirement and the other half toward the highest-interest card debt. Pretty soon, you'll have two money "snowballs" gathering speed.