The Typical American Family is Broke!

February 21st, 2007 • Related • Filed Under • by admin

It’s time to face the facts. Most Americans are absolutely horrible with handling money. Over time there has been a consistent rise in the amount of debt that people have, a decrease in the amount of investments that people have, and it’s only getting worse. Americans have a negative savings rate, and the vast Americans are going to be dependent upon the government to pay for their retirement.

Let’s take a look at some of these frightening statistics:

Our credit card debt is increasing. The average American Family has $8,000 in credit card debt. In 1990, the average credit card debt per family was a mere $3000. (CardWeb) At least Visa and MasterCard are happy!

We have way too many credit cards! There are 1.3 billion credit and debit cards in the United States. (CardWeb) The average household has 13 credit, debit, and store credit cards. (CardWeb). Seriously, does anyone need more than one or two credit or debit cards?

Americans depend on the government to pay for their retirement! 96% of Americans will be financially dependent on the government when they retire (DoHHS). We have Roth IRA’s, Traditional IRA’s, 401K’s, 403B’s, Thrift Savings Plans, and the like for a reason!

We owe a lot of money! The total consumer debt for American citizens is $2,170,000,000,000. (Federal Reserve). Yes, that’s trillion with a T! Together we owe a lot of money! That’s about $6,000 in debt for every person in the United States!

Mortgage balances are higher than ever before. The average family with a mortgage owes $223,200 on their home (Federal Housing Finance Board). Let’s face it, homes are just more expensive than they used to be.

America: Now With More Bankruptcies! In 2004, there were nearly 465,000 chapter 11 and chapter 13 bankruptcies (Administrative Office of US Courts). There was also a recent survey that stated one out of every one-hundred Americans will file bankruptcy in their life time. Is it really so unreasonable to ask people to pay for the debts they agreed to pay?

Statistically Americans will spend more than they make. The average savings rate is currently about -1%, statistically we are spending more money than we make. The last time this happened was the great depression! This has to be one of the most frightening statistics around. If we’re not saving money, then we’re not planning for retirement, saving money for emergencies, planning for purchases, or putting money away for our kid’s college.

We need to step it up!

When you find yourself in over your head, Debt Consolidation might be worth exploring. Debt Consolidation simply means combining multiple debts into one monthly Personal Loan payment. Often Debt Consolidation can offer lowery monthly expenses and longer repayment terms. Debt consolidation only works if you also change your spending patterns and end the behaviors which got you into your financial mess in the first place.