That’s nothing if you have a mortgage, a car and student loans. I thought it was much more than that.
I think because the number of people with a mortgage is smaller than those without one, the average skews lower. Mortgages are the first loan they mention at 1800+ a month.
They should include average rent per month to get a better picture of how much people are earning just to spend immediately.
True. But I know a lot of people that have paid off their house and or car. This is an average.
I really wish that journalists would learn how to write a headline. “Typical” can mean either mean or median, either for the whole population or just for the population that would reasonably take on debt (similar to how unemployment is counted). [or sometimes mode] but I think they’re saying average.
Well they definitely aren’t going to start writing about the “mean American’s” debt 😉
Hooray for being above average at something!
… active debt such as mortgages, auto loans, credit cards, personal loans, student loans and other categories.
Then that amount seems extremely low. Yay, I guess?
A huge gap in this article is not defining what they mean by credit card debt. Sure, there’s an afterthought about high balances but the article is mostly focussed on monthly payments. With the death of cash, my monthly credit card bill has never been higher, but I’m also in a place where I’m paying it off every month and am in good financial shape. Credit card payments to cover pretty much all of my operating expenses is different from credit card debt. Until they better define that, I have to assume that a lot of us no longer use cash or checks, so the credit card payments going up is an unsupported claim
My credit card bills have gone up because they cover daily expenses, and inflation, never use cash, never use checks. For whatever portion of people are similar, I’m not convinced of the credit card portion.
Of course, I recently got a car loan after no payments for 5 years, so my personal debt also went way up
It does appear shockingly low indeed.
Oy. I wish my mortgage was that low.
I mean… that’s a mortgage. So if that counts, then yeah. Sad part is most of those paying that much on top of rent (which is also that much.)
Mortgage and student loans were included, which makes these numbers generally meaningless since those two have been nearly non-discretionary for decades (just stating the fact not endorsing the structure of it).
Just the interest, or including principal? Because there’s a work of difference between the two.
$1600 in rent? Fuck, I’d be elated to pay that.
As someone in poverty but who generally doesn’t owe any debts other than some relatively small/cheap student loans…
The thing is, much of that debt may be counterintuitively what accumulates wealth.
For example…Paying $2,000 a month for a mortgage in a hot real estate market will include principal and interest, but the principal will be recouped when the property is sold, and the increase in the house value over time can significantly offset or even exceed the interest value.
On the other hand, rent paid to a landlord just goes into a black hole with no longer term benefit. It’s not considered debt, but it leaves the renter worse off (often).
I guess what I’m saying is, it feels good to not have debt, but refusing to incur debt when it helps long-term can actually make you poorer.
Now, when you’re poor, you don’t have a choice to live on rent and paycheck-to-paycheck, which is why this is another terrible “rich get richer” problem.
It would have been interesting to see that as a percentage of household income instead of just an average dollar value.
Some people probably pay twice that on just their mortgage, or half. It depends on where they live for the most part.
These numbers are interesting, but they don’t paint a clear picture. (They don’t paint any picture, actually?)
I am having trouble understanding what counts as debt. As someone that makes all purchases on a credit card, does that count as debt if I pay it off every month? My initial gut reaction is that the number is low and that means people aren’t buying homes or cars or higher education. Also not sure if this also means older boomers and genx are carrying more debt into later stages of life than they used to. They mention that in the article, but would be curious to see more demographic breakdowns.
TIL I’m above average.
Congratulations 🎉
Hoooraaaaay! Question mark
Now you need to make sure to go tell everyone you know you are above average. (Just don’t tell them why)
How else are you supposed to buy a house?
According to Dave Ramsey, just pull yourself up by your bootstraps, save, and pay the entire amount in cash.
It’s tough, but buying a house is debt which factors into this debt analysis.
If they’re including mortgages that’s crazy low. Lots of Boomers lowering the number I’m sure.
googles.
https://www.rocketmortgage.com/learn/average-mortgage-payment
According to the National Association of REALTORS® (NAR) in 2022 the average monthly mortgage payment was $2,317. In comparison, the median mortgage payment for Q2 of 2023 was $2,051 for a mortgage on a single-family home.
Yeah, that has to have either people who rent or have a paid-off house pulling things down, since the typical mortgage payment alone is more than that, absent any other forms of debt.
I am (very thankfully) debt free – if I don’t include my rent.
I keep hearing how going into debt is “essential”, especially from older people, and I think it’s the most ridiculous bullshit I’ve ever heard. I have excellent credit, mostly because I used to have debt. But the fact that we’ve now built this whole system around using money one doesn’t have is maddening.
I mean, they’re right. I also have lived well within my means. Total commitmentphobe for finances.
But if I had gone into debt, invested the money in real estate or even stock market, I would be in a much better place. In hind sight, of course.
Those are the rules of this economy. It sucks ass, but there’s no denying it.
I agree to a point. I don’t think it’s true that going into debt is always a good idea. Yes, the system is fucked up, but part of that fuckedupedness is inconsistency.
No one is saying it’s always a good idea. But good financial planning for life requires planning to take on debt based on what you need near term, but can plan to afford long term.
For example, if you buy a house and take out a mortgage you will have a monthly payment that might be equivalent to rent. But unlike rent, you can sell the place you live and recoup the value of the house you own because you took on debt. But on the flip side you can plan that wrong and be house poor where you can afford your mortgage but have no money for the rest of things you need to do in life.
I mean, of course I’m not advocating maxing your credit on meebos or whatever frivolous spending floats your boat. The way you phrased it, it’s obvious that your elders meant going into debt to invest in your future.
The way you phrased it, it’s obvious that your elders meant going into debt to invest in your future.
Frankly, I’d argue my “elders” have nary a clue at this point. I’ve yet to see how spending money one doesn’t have helps anyone but corporations.
I mean, you can continue to rent for the rest of your life, paying money to a corporation every month, if that’s your prerogative. Isn’t very smart, though.
So you can use and enrich corporations for smart phones, buying groceries, paying for transportation, your electronic payments, insurance, etc. But draw a line in the sand for loans to better your life whether it’s education, home ownership, or car ownership?
If you have to go into debt to afford something, then by definition, you can’t actually afford it. If I need to buy a car, I buy one with the cash I have available to purchase a car. I don’t rely on a bank to give me money I don’t have to make a purchase that I couldn’t otherwise afford.
The only thing you should realistically go into debt for is a house. The other stuff should really only be a last resort.
If one intends to use education as an investment (as in, for the realistic purpose of increasing the market value of your labour), it might be the case that taking debt for that is a good economic decision as well.
I mean, that really depends on a lot of variables whether it’s worth it or not. You should definitely explore any opportunity where you avoid taking on debt (community college, learn a trade, getting the debt forgiven with volunteering programs, studying abroad, studying in your own state,…).
You’re kinds muddling three related but distinct concepts here: “what do I want to do with my life?”, “What can be done to minimize the cost of education”, and"does it make sense to go into debt to obtain the thing".
Someone could (and should) brainstorm all kinds of options, but at the end of the day, (for most of us working class), we’re still faced with the proposition of either taking on some amount of debt, or deferring to save money to pay outright for the thing.
It’s not my place to tell people what they should do with their lives, but given the general question of “should I borrow money to do X”, it just comes down to “does the value over the time of ownership exceed the cost of servicing the debt”.
Why is her watch upside down though?
deleted by creator
Some people like their watch face on the underside of their wrist. It can be more comfortable. It just isn’t as common cause it doesn’t show off the watch to others as well.
Maybe she’s a sniper in the military
