Posted on 05/01/2017 4:28:05 PM PDT by Lorianne
Americans are struggling to get out of the red.
Some 40% of Americans with debt are spending up to half of their monthly income paying it back. And that may not even be enough to cover how much they owe. That’s according to a study on debt Thursday released by Northwestern Mutual, a life insurance and financial services company. The polling company Harris Poll surveyed more than 2,000 U.S. adults in February 2017 on behalf of Northwestern Mutual.
The survey found that nearly half of Americans are carrying at least $25,000 in debt, with an average debt of $37,000, excluding mortgage payments. About one in 10 surveyed said their debt was more than $100,000. “It becomes an ongoing cycle and really hard to get out of, given that people are not prioritizing debt and saving for their future as the first part of their budget,” Rebekah Barsch, the vice-president of planning at Northwestern Mutual, said.
Debts that are investments in the future, including mortgages and student loans, can be beneficial in consumers’ long-term financial plans, Barsch added. But many consumers in the survey also said they’re spending up to 40% of their income on discretionary purchases such as entertainment, leisure, hobbies and travel. And a quarter said they are prone to “excessive” and “frivolous” spending.
(Excerpt) Read more at marketwatch.com ...
What percentage is college debt, I wonder?
Becoming 100% debt free a few years ago was better than being retired.
I spend 80% of my money trying to keep the wife happy. Talk about a BLACK HOLE!
“...many consumers in the survey also said they’re spending up to 40% of their income on discretionary purchases such as entertainment, leisure, hobbies and travel. And a quarter said they are prone to “excessive” and “frivolous” spending.”
Well, you can’t fix stupid!
How much of that is car loans? 25K isn't that much for a car nowadays, and Americans have been conditioned to think financing car purchases is normal. My dad made better than average money when I was a kid but never bought a new car until he was well into his 40s, and never financed one in his life. Meanwhile friends of mine whose dads made less had a new car every few years. As soon as the loan was paid off they would trade it in on a new one. And that was in CA where car bodies last just about forever.
If they spend NONE of their income servicing debt, they are part of the 40%, aren't they?
Who writes these things?
And who calculates them? $37,000 must be less than the average price of the average SUV.
As long as the gov gets theirs, that is all that matters.
>>Becoming 100% debt free a few years ago was better than being retired.<<
Just did it for the second time and yeah, it feels fantastic. It also makes retirement MUCH closer.
The reason for the second time is when I moved I could have paid cash for the new place, but with Mortgages at 3% it was damn near free money. But after 5 years I tired even of the small monthly so paid it off when the company I own distributed the profit from last year.
It astounds me how many Americans are in debt. I am willing to wager for ONE reason only: the inability to say “no.” To the kids, to the spouse and to themSELVES. Go to a State College. Live with Formica. Keep the old car in good shape and drive it until the wheels fall off.
My car is a 2001 and running great. It was paid off in 2004.
If people need help, they need only look up Dave Ramsey and follow his advice to the T.
Paid off a mortgage 3 years ago and immediately used that sum that had gone to the mortgage to paying off the vehicles (thank you, Dave Ramsey!)...became totally debt-free for just short of one year until a vehicle needed to be replaced.
Only have $2600.00 to go on the buggy. I could pay it off now but the loan is paid through a painless payroll deduction.
Don’t anyone tell me we don’t have indentured servitude in the USA!
Debt free are we! Interest is the devil in our home.
We save to buy a car and then pay cash. We paid off our home in 6 years by putting every available dollar towards paying it down.
We don’t get bills in the mail except for the incidental stuff like home utilities and the internet..and taxes.
If you are in debt, listen to Dave Ramsey show.
https://www.daveramsey.com/baby-steps/?ectid=gaw.daveramsey-babysteps1
Between taxes, state college fees for the wife and my insurance...I’m out $49,000 before I even get to property taxes, car insurance, homeowners and earthquake insurance.
The cost of the healthcare side is the thing mostly dragging us down IMO.
We did the same as you. Except we only pay cash for our cars. We have an account set up where we put what would be a car payment.
Too many people don’t think about saving money, or doing without things they really can’t afford.
Instead they thoughtlessly put impulse purchases on Visa. Then when they hit the credit limit on Visa, they put it on MasterCard. I’ve seen a number of people family and friends who behave this way. It’s very sad when it comes crashing down on them.
The incredible life lesson I learned: if you cannot realistically pay back the debt within seven years, don’t borrow it in the first place.
I do the same thing...but never manage to accumulate enough to pay cash. It certainly reduces the amount of financing needed.
If 40% of Americans have ANY debt, and ONE of them is spending half his income on debt service, the headline is accurate.
Being debt free takes toil, sweat and planning. All that is well worth it as the payoff lasts a lifetime and is very comforting.
We have been debt free for going on 6 years, allowed us to retire 2 years early. Got a $16k raise coming this month with Social Security.
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