How Much Debt Are Americans Really In?

The debt of the American people has grown significantly over the years, in thanks to credit being given to lenders so easily. Every major purchase seems to have it’s own debt bubble that gets bigger and bigger until one day it will pop and do a lot of damage to our already frail economy. We all saw the Housing market crash 10 years ago, they predict the next bubble that pops to be either student loan debt or from auto loans. Student loan debt is so high due to the constantly rising costs of college, it’s hard to find a non-state school that charges less than $40,000 per year. The auto loan bubble isn’t quite as obvious as student loans. The major issue with auto loans is that Americans are buying cars that they can’t actually afford, but think they can by agreeing to 6 or 7 year loans to pay it back. At the end of which they’ll end up paying far more than the vehicle was originally worth. That is just one example of the trouble that all this increasing debt is causing Americans. It has caused the millennial generation to put a pause on things like having children, getting married, and even buying a house. But just how are in debt are Americans really?

Let’s take a look at a breakdown of the median debt of Americans based on different demographics.

The median household income for the United States is around $59,000, yet the median household debt is just above that at $59,800. How can we pay off debt that costs more than we make in a year? This is the new American way, we shop with more money than we have, all thanks to a simple piece of plastic or signing our name on the dotted line. Now let’s take a look at how the median debt differs based on different demographics.

Debt by age shows that those between the ages of 35 and 54 have the most amount of debt, most likely from recently purchasing a house. It’s interesting to see that even if you work to pay off your debt your entire life, 40 years later it will only be 50% of what it was when you were 35. The large amounts still owed by those over the age of 65 prove why we still see so many senior citizens in the work force instead of enjoying their retirement.

The debt by education demographic is more straight forward as student loans make up a huge chunk of Americans debt. It is unfortunate that we send young Americans out into the world with such a significant amount of debt immediately hanging over their heads, and with a lack of well-paying jobs there is not much hope of getting them paid off quickly.

Debt by family structure is an interesting demographic to look at when it comes to median debt. Couples with children are clearly the ones with the most debt, which makes sense seeing as childcare costs are sky rocketing and families may find it more affordable to own a home than to rent one big enough for their entire family. Couples with no children have only 36% less debt than those with children, which I assumed would be a bigger difference. Surprisingly single parents have similar amounts of debt as single people with no children. Is that because they aren’t able to afford to buy a house on just one parent’s income?

There is so much more to look at when it comes to breaking down debt by demographic, but these were the one of most interest to me. You can find the rest of this infographic here to compare your own debt to others in your demographic.