Debt and gross disposable income Average household debt was $261,492 in 2021-22, while average household gross disposable income grew 3.7 per cent to $139,064. When compared to the average of all households, the highest income quintile held 1.98 times the debt, and 2.07 times the gross disposable income.
The total personal debt in the U.S. is at an all-time high of $14.96 trillion. The average American debt (per U.S. adult) is $58,604 and 77% of American households have at least some type of debt. Let's pause a second to define debt. Plain and simple, debt is owing any money to anybody for any reason.
According to Experian, average total consumer debt in 2022 was $101,915. That's up nearly 10% from 2020, when average total consumer debt was $92,727.
Most Americans have some credit card debt. A recent GOBankingRates survey found that 30% of Americans have between $1,001 and $5,000 in credit card debt, 15% have $5,001 or more in credit card debt and about 6% have more than $10,000 in credit card debt.
With average consumer debt in America on the rise, it's no surprise that debt delinquency – missed payments of 30 days or more – has increased for nearly all debt types. Even with that $16.9 trillion shared by about 340 million people, consumer debt statistics show that Americans are feeling the pain.
Debt-to-income ratio is your monthly debt obligations compared to your gross monthly income (before taxes), expressed as a percentage. A good debt-to-income ratio is less than or equal to 36%.
Less than a third (30%) of U.S. consumers are debt free. 19% of Americans say their top financial goal for 2023 is to pay down debt.
Between mortgage loans, credit cards, student loans, and car loans, it's not uncommon for the typical American to have one or more types of debt. The ones who are living debt-free may seem like a rarity, but they aren't special or superhuman, nor are they necessarily wealthy.
Paying off debt significantly improves happiness
And over half (58%) of those who still have debts to pay off think paying them off would make them happier. However, of those who have not paid off their debts, 40% think that paying them off would have no impact on their happiness.
Being debt-free is a financial milestone we often hear about people striving for. Without debt, you can focus on building more savings, investing those extra funds and just simply having more peace of mind about your finances.
Here's the average debt balances by age group: Gen Z (ages 18 to 23): $9,593. Millennials (ages 24 to 39): $78,396. Gen X (ages 40 to 55): $135,841.
Realize that debt is often a part of life
Don't assume that just because you have debt, you're bad with money. If that was the case, most everyone would be considered financially irresponsible at one time or another.
Debt is part of the average American's life, and you can start to accumulate it as young as your 20s. New findings from Experian's 2020 State of Credit report show that the average Gen Z consumer (ages 24 and younger) has about $10,942 worth of debt, not including mortgages.
According to that same Experian study, less than 25% of American households are debt-free.
Norway is the country with the highest level of household debt based on OECD data followed by Denmark and the Netherlands.
He doesn't always lose money. But when he does, he loses more than $6 billion. He is ... the most indebted man in the world. Jérôme Kerviel is learning one of life's harsher lessons: It stinks to be $6.3 billion in debt.
Debt might also be considered good if it helps you build credit. But remember: Part of what separates good debt from bad debt is how it's managed. This means using credit responsibly, like making monthly payments on time. Loans and credit cards can help open new doors and opportunities, but there are no guarantees.
While the debt-to-equity ratio is a better measure of opportunity cost than the basic debt ratio, this principle still holds true: There is some risk associated with having too little debt. That's because debt is a cheaper form of financing than equity financing.
Those between the ages of 40 and 49 hold an average of about $7,600 in credit card debt — the highest of any age bracket, per TransUnion data provided to CNBC Make It.
While the specifics vary somewhat among the different chapters, the most common examples of non-dischargeable debts are: Alimony and child support. Certain unpaid taxes, such as tax liens. However, some federal, state, and local taxes may be eligible for discharge if they date back several years.
Less financial risk
If you are in debt without an emergency fund to fall back on, things can get dicey quite quickly if you suffer financial hardship or job loss. A life without debt gives your budget some wiggle room so that if things go awry, you have a safety net to fall back on that is not tied to debt payments.
Is $2,000 too much credit card debt? $2,000 in credit card debt is manageable if you can make the minimum payments each month, or ideally more than that. But if it's hard to keep up with your payments, it's not manageable, and that debt can grow quickly due to interest charges.