America has a debt problem. Nerdwallet found that the average American household has around $132,000 in debt. Research also shows that over 38.1% of all households carry credit card debt. Additionally, when the housing crisis hit, the equity people had leveraged from their homes quickly disappeared making current lifestyle choices instantly outside their means. And of course the one everyone has heard about lately is the student debt crisis. The Institute for College Access and Success found that the average student loan debt is $30,100, and that number is projected to grow as time passes.

While debt is a problem, paying it down quickly reduces its impact. Unfortunately, American consumers rarely pay off debt quickly, which inevitably has an impact on their savings. In fact, studies show that 56% of Americans have less than $1,000 in their bank accounts, leaving little room to save for the long term. With more and more American families burdened with debt, the need for financial innovation has never been so high. The good news is that a number of entrepreneurs and financial leaders are providing solutions that consumers are adopting at rapid rates.

Cashback for Savings

Consumerism is as big as ever in the U.S., and many people cite that as part of the reason why Americans fail to save as much as they should. While critics argue that the answer is spending less, a few innovative startups are taking a different approach, leaning on spending habits instead of discouraging them.

Eugeny Prudchyenko, CEO and founder of EvoShare, a company that provides cash back rewards for retirement, explains how his company is tapping into purchasing behavior to help people save. "Twelve trillion dollars are expected in consumer spending for 2017. EvoShare sees this as a massive opportunity to generate additional retirement savings or student loan repayments. Our platform is a tool that recaptures a portion of this spending in the form of cash-back earnings, which users are not allowed to cash-out. These earnings can only be deposited towards an individual's retirement or student loan account."

Cash back programs like these have been found to benefit retailers as well. Prudchyenko shares, "People favor partner businesses that offer cash back over competitors because every purchase is more than a transaction; it is a step closer to their financial goals. Our solution gives businesses that competitive edge while creating customer loyalty." These kinds of solutions may be the perfect nudge toward educating consumers on the importance of saving.

Millennial Housing Hesitation

Millennials are naturally wary of the housing market. Many of them have seen their parents undergo significant financial troubles due to the housing crisis in 2008. As a result, they have been buying at a much later age. A survey from the National Association of Realtors found that most millennials make their first home purchase at 30 and up. While some are arguing that this may be a serious problem for the housing industry, it may also be a real solution for avoiding debt.

Home purchases are significant and often represent a 30-year financial commitment. Millennials thus far have demonstrated a penchant for travel, and as such are less likely to settle down in one place for that long. They also fluctuate jobs more frequently than previous generations, meaning long-term financial burdens pose a threat to financial freedom. By avoiding home purchases, millennials may spend a bit more on rent, but they also maintain the flexibility that may lend itself to better career and financial success in the long run.

Debit and Prepaid Solutions

There are also a number of financial solutions coming from larger institutions that are enabling people to transact online without worrying about cumbersome credit card debt. American Express rolled out its Serve prepaid debit cards to help credit averse consumers without banking accounts have a better way to pay for things online and in participating retail locations.

Prepaid and debit options encourage smarter spending which frees up money for saving. They also enable an underserved segment of the market, those without traditional banking or savings accounts, to better manage their money. Companies like Simple are also helping by creating account management tools that function outside of the traditional financial system.

While debt is a problem, it is important to remember that not all debt is bad debt. Credit debt often enables people to start businesses or transact freely without having to worry about the timing of their purchase. Student loan debt comes from educational efforts that help achieve higher salaries, which allows for long-term financial success.

The important thing is to infuse any debt repayment with a long-term savings strategy. With the number of savings options on the market, it is becoming easier for Americans to develop better savings habits and plan for more successful retirements. For consumers looking to find ways to save, do the research and find the solution that meets your needs the best, every strategy has to fit well with your existing habits.