The coronavirus pandemic hasn’t kept a lid on household debt.

An August report by the Federal Reserve Bank of New York indicates that total household debt increased by $313 billion in the second quarter of this year to reach $14.96 trillion. That total debt balance is $812 billion higher than at the end of 2019.

“We live in a debt world, with student loans, debt associated with purchasing homes and other debt — things are too expensive to pay for upfront,” said Tony Viertel, community outreach and education representative for Dupaco Community Credit Union.

Viertel works with people to create plans to reduce their debt, often meeting with residents referred to him by local nonprofit organizations.

“We work with many nonprofits in Dubuque,” he said. “People with Fountain of Youth are required to meet with us, we work with Resources Unite, The Salvation Army and their Pathway of Hope program and a lot of shelters.”

Although many individuals received stimulus payments related to COVID-19 relief, such payments haven’t cleared the debt worries for many people, according to Bruce McClary, senior vice president of communications with the National Foundation for Credit Counseling.

“There were two categories of people in the pandemic,” McClary said. “For some, it was a financial nightmare. They might have lost their job, saw their income drop or may have had COVID-19 and been hospitalized. They may be facing foreclosure or eviction. For those folks, if they received stimulus funding, they used it trying to keep afloat. On the flip side, there was a subset of the population that were able to continue to maintain full employment, and saw their personal expenses reduced by things like not going on big vacations.”

McClary’s organization has been working with increasing numbers of people in the first category he mentioned, particularly as forbearances offered by lenders begin to lapse.

The National Foundation for Credit Counseling is a nonprofit organization that supports a nationwide network of nonprofit agencies across the country that provide free, basic financial guidance and low-cost debt counseling that can help individuals reduce their debt by negotiating affordable payment terms.

“For people experiencing difficulty managing credit-card payments, we have structured programs that can result in a reduced payment, all within the person’s existing budget,” McClary said. “When you are working on a debt-management plan with a counseling agency, the terms of those plans are already worked out. The agency works with creditors, which is different than someone going about it on their own trying to negotiate with creditors.”

Here are eight tips to reducing debt.

BE REALISTIC “People want to run before they walk,” Viertel said. “They see their debt and they’re thinking ‘I want to pay that off right now. But that is just not going to happen.”

Viertel said budgeting should serve as a foundation for debt reduction — and can help people reach for attainable goals.

“Lay all of your debt out and see what your monthly payments really are,” he said.

Viertel also said to consider changes to buying and other habits.

“Often, when you go into these debt reduction strategies, it can mean a lifestyle change,” he said. “Again, your budget has to be your foundation. We tell people to minimize their variable expenses.”

That could mean reducing meals at restaurants, ordering groceries online to limit impulse purchases and other cost-saving steps.

DON’T GET DISCOURAGED “Know that you’re not alone,” Viertel said. “Look at the amount of debt that’s in our country.”

McClary said people often become discouraged from tackling their debt because there seems to be too much of it.

His advice? Take a measured approach to paying off bills.

“If you look at the sum of all the parts, debt can seem overwhelming, but if you have a strategy to pay off the balance that you owe in a structured and methodical way, (reducing debt) appears more realistic because you’re taking things one step at a time,” he said.

CONSIDER THE OPTIONSA common debt reduction strategy is to focus on paying off the smallest debt first, while making minimum payments on the others. As a person finishes paying off one debt, they can apply that payment amount to the next-largest debt.

“For somebody just starting out, that’s a great way to get a few small wins first,” Viertel said.

Another common approach is to pay off the debt with the highest interest rate first, while making minimum payments on the others. This approach could save more money during the course of a person’s debt-reduction plan.

“Ultimately, the method that is the best for you is the one you’re most comfortable with,” McClary said. “Most experts agree that you can save more money in the long run by paying off the highest interest rate first, but that might not give you the quickest results.”

PICK the right STRATEGY for you“Do whatever it is that makes you the most motivated (to continue),” McClary said. “If you’re picking a (debt-reduction) path that is not in your comfort zone, you won’t make it to the finish line. Pick a path that makes you stay on track.”

Mull changing YOUR APPROACHMcClary said a person’s financial situation could change during the course of paying off debt — either improving or worsening. He said people should not hesitate to make adjustments to a debt-reduction plan.

“Whenever you enter into a plan you should expect that plan to change,” he said. “Be prepared to pivot if necessary.”

“If you start to pay down on those debts, in six months or a year, check your credit score,” Viertel said.

Paying down debt could improve a credit score enough to lead to lower interest rates.

CONSIDER WORKING WITH CREDITORS“Creditors want those debts paid off and they are going to work with you,” Viertel said. “It’s a two-way street.”

McClary said to keep lines of communication open with creditors.

“It’s important first of all for people to prioritize communication with their creditors,” he said. “That way, you can make sure you are keeping your credit-card issuers and lenders aware of your circumstances. Don’t wait for them to contact you — you reach out to them and don’t wait for the account to fall behind.”

McClary said creditors want debt-reduction efforts to succeed.

“They are just as interested in keeping your account on track as you are, and they should be understanding if you reach out — especially if they know you have a (debt-reduction) plan. You can even ask them what programs they have to keep your account on track.”

BE CAREFUL MAKING PROMISES“I used to be a debt collector, and we were always appreciative when someone reached out,” McClary said. “However, don’t commit to anything that you know you cannot do.”

McClary said to work with debt-collection agencies to provide realistic payment arrangements.

“Promising a payment that you cannot make may end the phone call (from a debt-collection agency), but it creates a bigger problem down the road,” he said.

NOT ALL CLAIMS ARE EQUALMcClary recommends seeking assistance from debt-reduction agencies that are accredited by an independent party, that charge affordable fees and that don’t promise unrealistic results.

“If something sounds too good to be true, it probably is,” he said.