Debt? Debt. Debt!
The average American household has $90,460 in debt, according to a 2021 CNBC report. That number includes consumer debt from credit cards, personal loans, mortgages, and student debt. That looks like a big number but if that includes car loans and mortgage, then it’s not really that much.
Our family, for example, primary mortgage loan is around $161,000, rental property mortgage is around $55,800, and the car loan is around $8,000 for a grand total of $224,800 of debt. That number does not even include the monthly credit card debt of between $3,000 to $4,000 in expenses (which fortunately we pay off and don’t pay interests every month).
One of the worst possible debts a person can have is revolving credit card debt. At the APY of between 14%-30%, it’s almost impossible for someone to pay that off long term. To give context, 10-15% return in the stock In any given year is considered very good and there’s no guarantee that happens every year. The APY on the credit card is guaranteed to make one much poorer very quickly.
Our family tries to minimize costs on things we don’t need, but even just the basic needs in life will cost quite a bit, so it requires that we take on some debt to meet our basic needs. Fortunately for us, all the debt that we have is manageable with our current income so our financial situation is rather stable at the moment.
On another note, we have just received the Child Tax Credit payment from IRS in our direct deposit. If you filed your taxes and did so with direct deposit, chances are you should see one (or at least very soon) too if you have children.
Today was not a good day for the market so we took a decent-sized hit with our investment, down $2,655.
Share: How are you managing your debt? How do you cut down on it?
You can also Follow Us On Facebook, and Twitter for the latest updates, giveaways and more!
The average American household has…