Strategies for Debt Reduction: Comparing Financial Tips and Financial Counseling

U.S. households hold increasingly more debt, with almost 80% of adults holding debt of some form. While ownership of debt is widespread, debt burdens can be particularly challenging for low-income households; debt-to-income ratios can be three times higher for these households compared to those with high-incomes. Debt reduction has thus become an aim of initiatives to help lower-income Americans increase their financial well-being. This brief examines two different mechanisms for delivering debt management advice and describes the success of each method in helping individuals reduce their debt.