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Chipping away at household debt amid highest inflation on record

As prices for just about everything continue to rise, it can be easy to take on debt just to make ends meet.

INDIANAPOLIS — Consumers are facing the highest inflation rates in more than 40 years.

It can be easy to take on debt just to make ends meet.

Experts say you can chip away at your debt in this current climate and work toward financial freedom.

Here's how to start: 

  • Create an open dialogue with your spouse or partner about finances. Tackle that debt together.
  • Use budgeting apps to help you see the broad picture.
  • Work with a financial advisor to determine ways to prioritize spending.

RELATED: Website bridges gap for Hoosier farmers hurt by inflation

Financial advisors say it's better to pay down bad debt. For example, pay credit card debt over car loans.

The decision on what to pay off first is all dependent on interest rates. Experts say those tackling debt should approach it like a diet.

"Going from being wildly excessive to complete deprivation is really not a great strategy," said financial advisor Kristin Merrick. "You have to organize your debt. The focus needs to be on the bad debt, which you know already is the credit card debt."

RELATED: Tips on budgeting with high inflation

Another piece of advice is to set up specific accounts for specific needs, so funds in one account go strictly to emergency expenses, like medical bills or home repairs, and other accounts are set up to save for travel or other fun activities.

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