Percentage Of People In Debt

Percentage Of People In Debt – When it comes to classifying certain four-letter words, it’s safe to say that most people think debt is one of them. While some argue that certain types of debt are good, such as mortgages, many Americans would rather have their money invested elsewhere. They’d rather spend their hard-earned dollars on fun things like vacations, or put the money toward savings and vacations instead of paying off their debt. But really, if we want to have a house to live in or a car to drive, it’s not surprising how many people have clothes in America. Inevitably or not, going into debt is borrowing from the future, and many of them are feeling the pain of their past decisions today. In fact, about 13% of Americans expect to be in debt in their lifetime. Unfortunately, debt is common in America.

How much debt do Americans have? Financial experts estimate that the percentage of Americans in debt is 80%. 8 in 10 Americans have some form of consumer debt, and the average debt in the US is $38,000, not including mortgage debt. Just taking money seems like a way of life for Americans, because we have a combined $14 trillion. These costs are increasing exponentially. Consumer debt can be broken down into 4 main categories: mortgage debt, car loans, student loans, and credit card debt. Unpaid health care costs and high health care costs contribute to the debt burden Americans have.

Percentage Of People In Debt

Percentage Of People In Debt

The largest amount of debt in the United States is mortgage debt with the average American home loan amounting to $189,586 out of $9.44 billion. The next largest debt is student loans, which average $46,822 for the American family. The average car loan is $27,804 and the average home equity loan is $5,135.

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A budget survey by the Bureau of Labor Statistics shows that mortgages and housing are our biggest spenders. The latest figures from their research show that 33% of our monthly income goes towards housing – which includes mortgage payments, utilities and bills, repairs and appliances.

Percentage Of People In Debt

However, the amount of debt you have can vary depending on your age and lifestyle. For example, people over the age of 35 have, on average, debts of about 67,400. Most of their debt consists of credit card debt and student loans. But looking at the age groups and their standard of living, it makes sense that mortgages would be the main source of debt for households aged 35-44, as more people buy homes and start families.

The most common reasons Americans go into debt are medical expenses, home improvements, and childbirth. Of course, there is a cost to reproduction. In fact, about 37% delay having children and starting a family until they have invested and paid off a lot of debt. They fear the additional debt that a baby can add up to – including losing money from vacations and paying for childcare until the child reaches school. The average cost of raising a child from birth to age 18 in the United States is $250,000, or $13,889/year, including housing, food, and education. Adding children to the family also includes health care costs, which rise faster than our incomes.

Percentage Of People In Debt

One In Four Americans Are Debt Free

Unpaid medical bills and debt collection are a growing trend among Americans. Some Americans pay for insurance AND their out-of-pocket costs until their deductibles are met. This is also true for people who have insurance, as some plans are highly discounted. 62% of people who have trouble paying medical bills say they had health insurance when they started treatment.

Medical expenses can be very expensive and add up quickly, especially if it is the result of an emergency or accident. 40% of Americans say they can’t afford a $400 emergency bill. And in fact, 15% of Americans have medical debt of at least $10,000.

Percentage Of People In Debt

Increases in health care costs outpace increases in income. An analysis of the past 10 years has shown that medical expenses have increased by 33% while income has only increased by 30%. Despite efforts to reform healthcare, many families feel the burden of unpaid medical bills. The average health care cost per capita in the US is $5,000/year, which has doubled since 1984 (after adjusting for inflation).

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The cost of higher education is also on the rise. The average salary for an undergraduate or graduate student is $49,000. 40 million Americans have student loan debt, and 14% of them have more than $50,000. The percentage of Americans with student loans is at least 28%.

Percentage Of People In Debt

In our personal finance statistics article, we were able to see that when looking at income by race, Asians have higher incomes, on average, than other races. The median income in Asia is $81,331 per year. When we look at student debt by race, we see that Asians are right in the middle when it comes to what they should study.

While men tend to earn more money than women, women have less student debt than their male counterparts. Regardless of age, job type, industry or experience, men tend to earn an average of $11,791 more than women.

Percentage Of People In Debt

What About The National Debt?

Currently, the amount of debt is positively related to the level of income. This means that the amount of debt increases as the income increases. With a higher income, you may be eligible for a mortgage or car loan. You have a greater ability to get into debt because you have a greater ability to pay.

However, $11,200 is 7% of $160,000, while $3,000 is 12% of $25,000. So while the dollar amount of debt is higher when income increases, the percentage of debt relative to their income decreases. Those with low incomes are more sensitive than those with high incomes.

Percentage Of People In Debt

Income level is only one piece of the puzzle. Depending on where you live, your income may be far reaching or you may be strapped for cash due to the cost of living. There are some states where the average debt per capita is higher than the income. We’ve all heard that it’s expensive to live in California and Hawaii – and we can see that the average debt in Hawaii is more than $18,025 compared to the average income. The average debt in Hawaii is $72,590 while the median income is $54,565.

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Here are some other examples of where your average debt exceeds your income. On average, they have to pay more than they do.

Percentage Of People In Debt

The percentage of households with debt in the US region is listed below. On average, only 75.4% of households have debt in the Northeast, compared to 77.8% of households in the West.

In fact, going into debt is borrowing from the future. Some debts can be considered “good”. Loans or student loans can be used to build a credit score and build a credit history. However, the bills can pile up quickly and you may find yourself stuck in a spiral where the mountain is steep and difficult to climb.

Percentage Of People In Debt

The Burden Of Medical Debt In The United States

In fact, there are some people who have so much debt that they use at least half of their income to pay it off. In fact, 20% of Americans use at least 50% of their income to pay off their debt.

The more debt you have, the less money you have to pay for other things or save for emergencies. There’s a reason why it’s important to do your research and plan before you go into deep debt. Will your college degree lead you to a career that will be worth what you paid for it? Will you be “house poor” after buying a home you thought you could afford, only to find out too late that all the extra home ownership costs have left you strapped for cash? Will a lack of cash cause you to use a credit card or take out a personal loan, and go further into debt? Debt leaves us with less income and more responsibilities.

Percentage Of People In Debt

It’s easy to get into the money cycle and borrow. With nearly half of Americans saying they live paycheck to paycheck and 40% of Americans saying they wouldn’t be able to afford an unexpected $400 bill, we realize that we need to take a hard look at our finances and get them back on track. process.

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We can’t talk debt without talking budget. When we see how much money we have to grow and grow, we have to ask ourselves – where does our money go? Most Americans can’t answer that question – only 1 in 3 people keep a family budget. Even more troubling is that nearly half of American households say they live paycheck to paycheck.

Percentage Of People In Debt

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