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The economy is slowly hobbling back to health but for many Americans the rainy day fund is still looking a little dry, the credit card bill is still looking a little scary [Unfortunately, the liklihood is that,] as the economy strengthens further, many Americans will…spend their new found extra cash rather than save it. Words: 474
So writes Allison Linn (http://lifeinc.today.com) in edited excerpts from her original article* entitled 1 in 4 Americans have more credit card debt than savings.
This article is presented compliments of www.munKNEE.com (Your Key to Making Money!) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.
Linn goes on to say in further edited excerpts:
The Present
According to an annual survey…conducted in early February by the personal finance website Bankrate.com, of a representative sample of about 1,000 adults:
- 24% of Americans have more credit card debt than emergency savings,
- 55% have more emergency savings than credit card debt,
- 16 % had neither credit card debt nor savings and
- 5% either didn’t know or wouldn’t answer.
The Past
The results are little changed from the same survey Bankrate.com did in 2011 and 2012 and suggests that, in general, [while] people’s ability to save up for a rainy day and keep a handle on credit card debt hasn’t gotten much worse in recent years, it hasn’t improved, either.
Greg McBride, senior financial analyst with Bankrate.com, said a big problem is that people’s wages have been pretty stagnant in recent years, even as expenses for things like food and health care have edged up.
Americans appeared to have been sobered by the Great Recession, [though, as] the total amount of revolving debt, which is made up mostly of credit card debt, fell between 2008 and 2010, according to the Federal Reserve….This doesn’t’ tell the whole story, said Lucia Dunn, economics professor at The Ohio State University.
Dunn’s research has shown that some people were able to pay off their credit card debt around the time of the Great Recession but “For those who were not able to pay off (their credit cards) and were still carrying a balance, that balance is still growing,” said Dunn, who was not involved in the Bankrate.com survey….
The Bankrate.com data also showed that…:
- nearly 25% of respondents said they were feeling less comfortable about their savings levels than a year ago,
- nearly 50% were feeling about the same and
- only 14% said they were feeling better about their savings levels.
Future Expectations
McBride…said many Americans may have the goal of increasing their savings but find that they have little left over after the bills are paid. McBride said he wasn’t sure that many Americans would improve their financial habits once the economy improves [because recent] thriftiness has been forced on them because their credit lines have been cut, they’ve suffered a job loss or they’ve hit another financial brick wall [and that,] as the economy starts to strengthen further, many Americans will be more likely to spend their extra cash rather than save it.
Editor’s Note: The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
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16 point 7 trillion dollars. That is our current national debt. 12 point 8 trillion dollars. That is the amount households carry in mortgage and consumer debt. We are now addicted to debt to lubricate the wheels of our financial system. There is nothing wrong with debt per se, but it is safe to say that too much debt relative to how much revenue is being produced is a sign of economic problems. At the core of our current financial mess is how we use debt as a parachute for any problem. [Unfortunately,] addictions are never easily cured and we have yet to come to terms with our insatiable appetite for debt. Words: 850
2. Consumer Indebtedness Leading to Currency Devaluation & Beggar-Thy-Neighbor Economic Policies
The current move up over the past 4 years is being driven by the Fed’s loose monetary policies (just as other global markets have been driven by their Central Banks). Most bulls believe the loose polices will stimulate enough consumer demand to lead to a significant U.S. economic recovery. We, however, continue to believe the debt – laden consumer, along with the still other unresolved debt burdens, will be a major drag on the U.S. economy, (we are convinced that the market will turn down and make a triple top at levels below the peaks made in 2000 and 2007 while we resume the secular bear market that started in 2000) and that will have negative affects on the global economy.
3. A Practical Assessment of the U.S. Debt Problem Shows It to Be Absolutely Absurd
The U.S. debt situation when broken down to one of family statistics really seems absurd. Yet it’s true. It’s a slow motion train wreck that can be seen coming miles away but which, like deer paralyzed in the headlights, everyone is unwilling to face up to and to take any meaningful corrective action – and it will be the downfall of them all. Words: 550
4. New Consumer Earnings & Spending Data Show U.S. & E.U. Citizens Living Way Beyond Their Means
The west is living far beyond its means and is struggling with pitifully anemic growth. This is a long-term trend, and one that is only going to accelerate. Nevertheless, as obvious as the indicators may be, few people will actually do anything about it. A lifetime of propaganda will plant many heads in the sand, ignoring the dangers and opportunities all around. [Let’s take a close look at just what these indicators are.] Words: 311
5. Addiction to Credit Card Debt Remains Excessive Albeit Declining – Here are the Facts
Households with credit card debt carry $16,000 at an average rate of 15% and, given that some households have little credit card debt, you can imagine how high the debt is for others.. Imagine, $16,000, but that is actually down by 17% as the grand American household deleveraging continues. [Be that as it may, credit card debt is still excessive with all ages and all income groups. Here are the facts.] Words: 760
6. 75% of Americans are in Deep _ _ _t!
Rising education and medical costs, on-going credit card interest payments, well used personal lines of credit and large mortgage debt and home equity loans – most a penchant for living beyond their means – is keeping 75% of American households in some degree of debt. Take a look and then pass it on to your friends, neighbors and co-workers.
7. And You Wonder Where Your Money Goes! Here’re the Costs of Living in the USA
The median household income in the U.S. is $51,914, according to U.S. Census Bureau data. To find out just where that cash is going, we’ve trolled through the latest data in employment, transportation, and common consumer expenditures. [Here it is.]
8. How the Poor, Middle Class and Rich Spend Their Money
How do Americans spend their money and how do budgets change across the income spectrum? The graph below answers these questions. Words: 240
9. The True Cost of Car Ownership is….OUCH!
We all know that the true cost of a car doesn’t end at it’s purchase price but most people don’t really know what the annual cost will actually amount to. The next time you are shopping for a car consider these additional costs.
10. How Much Do Americans Earn?
How much does the typical American family make? This question is probably one of the most central in figuring out how we can go about fixing our current economic malaise. In this article we break down the U.S. household income numbers. Words: 464
11. Which U.S. Universities & Fields of Study Generate the Highest ROI?
Recent research by PayScale has revealed that the average ROI for U.S. university graduates (693 schools surveyed) is $387,501 over a 30-year period. 6 of the universities generated a return on investment for its graduates in excess of $1.6 million.
12. American Grads: Here’s a Great Guide to Personal Finance
Graduating from college can be an exciting and stressful time. Suddenly you need to find a job, replay loans and make solid financial decisions. Fortunately, you don’t need to be unprepared. Below are some budgeting basics to keep your spending under control, some suggestions on how to set financial goals and a list of the top 10 American cities for starting out.
13. Secure Your Golden Years – Now! Here’s How
Americans spend more time planning their vacations than their retirement and this is the reason why 1 out 7 baby boomers are going bankrupt. With people living longer and spending as much as 30 years in retirement, if you want to maintain a moderate standard of living, it is essential to plan your retirement well in advance to secure your golden years.This article outlines 6 ways to do just that. Words: 665
14. 2 Ways to Reduce Your Debts Using the “Snowball” Method
What is the best way to reduce debt? The most-efficient means is probably the snowball method. There are two main variations of the snowball method, but you must consider your personality to determine which of the two is right for you. [Let me explain.] Words: 1251
15. In Debt? Here are 10 Ways Out
When people talk about getting their personal finances in order, they usually try to find relatively pain-free and low-cost ways to reduce debt and increase savings but this is a long-term approach which some people just cannot “afford”. [For them] …it may be worthwhile to consider taking the hard way out of debt. [Let me explain.] Words: 1370
16. 10 Money Ideas That WILL Change Your Life
Personal finance isn’t nuclear physics – just spend less than you earn, save and invest the rest – but knowing what should be done and actually doing it, however, are two different things. Here are 10 money lessons I wish I had known when I was 20 which have the power to change your life if you are willing to embrace them. Words: 1340
17. Is $1,000,000 Enough to Provide for a Successful 30-year Retirement?
Withdrawing from a $1,000,000 nest egg upon retirement using the familiar 4% rule to generate a successful 30-year inflation-adjusted (3% per annum) retirement proved to be totally inadequate as per the retirement withdrawal strategy that I put forth in a previous article (1). In fact, it crashed and burned in year 25 of the 30-year plan! In fact, as I show in this article, it will only succeed if your portfolio outperforms the S&P 500 by 5% every year for 30 straight years – and what is the likelihood of that? Words: 1533
18. Are You a Millionaire? 10 Reasons You May Not Be and What to do About It
The reason you are not a millionaire (or even on your way to becoming one) is really quite simple. You probably assume it’s because you aren’t earning enough money but the truth is that, for most people, it does not matter how much money you make… [but, rather,] the way you treat money in your daily life. [Let me explain.] Words: 866
19. More Reasons You May Not be a Millionaire – Yet
Many people assume they aren’t rich because they don’t earn enough money. If I only earned a little more, I could save and invest better, they say. The problem with that theory is they were probably making exactly the same argument before their last several raises. Becoming a millionaire has less to do with how much you make, it’s how you treat money in your daily life. The list of reasons you may not be rich doesn’t end at 10. [Here are 10 more.] Words: 842
20. AARP Survey: Golden Years Appear Grim to Aspiring Retirees
An AARP survey of over 5,000 American workers aged 50 or older has confirmed…that the Great Recession has radically changed the financial situation for many aspiring retirees and that the outlook for their golden years now looks grim. It seems that counting on their home equity to finance a life of leisure didn’t exactly work out as planned. [Let’s review the survey’s findings.] Words: 400
21. In Debt? Kick it to the Curb, Get Rich, and Start Living Life to the Fullest! Here’s How
If you’re among those struggling with debt and just want to be rid of it and move on with your life, it can be helpful to find some information and inspiration from others who are financial experts or people working to pay off substantial amounts of debt. You’ll find all of that, and more, in these inspirational personal finance blogs that can offer you advice, motivation, and guidance in paying down your debts so you can start putting that money to other uses. Words: 1010
22. Profitable Gold Parties Capitalizing on Growing Interest in Gold – Here’s How to Have Your Own!
Innovative and rewarding gold parties are popping up all over northern Colorado these days. [Could they be coming your way in the near future? Better yet, why don’t you make arrangements to have your very own! Here’s how.] Words: 460
23. American Grads: Here’s a Great Guide to Personal Finance
Graduating from college can be an exciting and stressful time. Suddenly you need to find a job, replay loans and make solid financial decisions. Fortunately, you don’t need to be unprepared. Below are some budgeting basics to keep your spending under control, some suggestions on how to set financial goals and a list of the top 10 American cities for starting out.
24. Think Differently and Become More Successful in Business, Life and Making Money! Here’s How
Objective and independent thinking is increasingly important to investing and trading success, particularly in the current and prospective economic and financial market times. How do you score yourself against the 15 ‘successful people traits’ outlined below? Words: 855
25. Do You Have What It Takes to Become Filthy Rich?
Saving money isn’t all about whether or not you know how to score screaming bargains. It has more to do with your attitude toward money. Many millionaires, in fact, have frugal ways and understanding how personal traits can influence your finances is an essential ingredient for building wealth. Do you have the 10 key traits to become rich let alone very, very rich? Words: 815
26. Don’t be Cheap, be Frugal! Here are 10 Ways to Get More for Your Money
Frugality often gets a bad rap. Many people misunderstand frugality and assume that it’s nothing more than being “cheap” when, in reality, frugality is making sure that you get the most from the money and resources you have, even if they are limited. [Here are 10 ways to do just that.] Words: 1132
More than 25% of American workers (33% of those in their 40s) with 401(k) and other retirement savings accounts use them to pay current expenses, new data show, [which is] undermining already shaky retirement security for millions of Americans. With federal policymakers eyeing cuts to Social Security benefits and Medicare to rein in soaring federal deficits, and traditional pensions in a long decline, retirement savings experts say the drain from the accounts has dire implications for future retirees. Words: 890
28. Don’t Even Think About It – Touching Your 401(k) That Is!
Look, if you’re absolutely stuck right now, then you’ve got to do what’s necessary but, in my opinion, you should avoid 401(k) hardship withdrawals at all costs … and think long and hard before you consider borrowing against your future retirement. With so many people nearing retirement already grossly underfunded [such actions are] going to prove catastrophic down the line. Words: 1043
29. Life Insurance: a Pot of Gold or Ready Cash?
A life insurance policy is intended to provide your family with a sizable amount of money should you meet an untimely death and, as such, can be said to be a something of a an ultimate bonanza – a pot of gold, if you will. Most people, however, think the only way to get money from a life insurance policy is to die but there is another way should your circumstances change and that is called a life settlement. In this article I provide you with some insider insights on how to go about negotiating the maximize payout on such a settlement. Words: 851
30. Is Your Household One of the 51% Projected to be at Risk in Retirement?
Many Americans are reacting to the economic downturn not by resolving to save more but by no longer actively planning for retirement. “That’s exactly the opposite of what they should be doing,’’ said Paul Ballew, senior vice president at Nationwide Insurance. Words: 369
Visit wsj.com – HERE – to find their calculator which shows where your household income stands compared to others in the U.S.. $506,000 puts you in the top 1%; the much talked about $250,00 in the top 6%; $200,000 in the top 10% while an annual salary of $43,000 puts you in the top/bottom 50%. Where do you stand?
32. Home “Owners”: Here Are 10 Advantages to Paying Off Your Mortgage Early
Paying off the mortgage early is an idea with obvious appeal, but not one that many middle-class home “owners” pursue. If your interest rate is so good that the bank just made a bad bet in giving you that low rate, you might want to continue enjoying the benefits as long as possible. In many other circumstances, however, paying off the mortgage can be a fine money management move indeed. [Below are 10 sound reasons to do so.] Words: 1588
33. What You Need to Know About Your Mortgage & Payment Options
For some people, a mortgage is just another payment they make every month but understanding where your money goes can help you better understand the status of your mortgage as well as the options you have. The infographic below gives homeowners everywhere a clearer picture of a mortgage payment breakdown. Please have a look and feel free to share.
34. 3 Ways to Improve Your Credit (FICO) Score
Anyone who has bad credit will want to find some tips to improve credit score problems so they can get approved for loans, get good insurance rates. This article provides some simple but effective tips that can help you repair your credit yourself. Words: 442
35. “Put More Cash in Your Wallet: Turn What You Know into Dough” – A Book by Loral Langemeier
You too can live comfortably and buy the things you want without worrying about how to stretch your income even further — you can even pay off your old bills in the process! Get out there and start making money! Words: 911
Handling credit card debt is becoming an eye opening problem for people for everyone. The main reason is because of the lack of financial management education. Obviously, people can approach debt consolidation companies, but the responsibility really falls on the person in debt. To alleviate the lack of proper money management education I decided to create a few credit card management tools, like a credit card balance transfer calculator. Check it out! Please drop by my site when you have the chance and let me know your opinion!