Americans have grown up with the saying “Keeping up with the Jones” and they have come to accept it. Americans want to have everything that their neighbors have, and if they don't have the money to buy it, they put it on credit. They believe that they need to live the same type of lifestyle as those around them but that lifestyle can quickly spiral out of control. Americans and the government fail to live within their means. Instead of cutting back on expenses and saving some money for the future or even retirement, many live in the moment. And unfortunately, that’s difficult to to come back from.

The combined amount of personal debt in the US is $2 trillion which is about the GDP of England. That means Americans are in debt more than a country earns in a year.  And that $2 trillion debt boils down to $117,951 per household.  The statistics don’t get much better from there. Even though Americans are a hard-working and industrious people they undertake too much debt and save too little. In the 1960s the average American saved 11 percent of their paycheck and in the 1990s it had decreased to 5 percent and then in 2003 it fell to 2.3 percent. However, because of the shaky economy, savings among Americans have risen to between 5 and 7 percent of their disposable income.

But despite the savings, many are failing to save for retirement Medicare and Social Security are going bankrupt, so individuals can’t rely on those programs or the government when they retire or can no longer work. They need to save up their money and prepare for their future. Currently, only 18 percent of Americans are confident about having enough money for retirement. And only 60 percent of Americans are saving for their retirement. So what about all those that aren’t saving? Hopefully they have some children that will take care of them in their old age or some backup plan.

Finances are tricky especially in today’s world, but it’s important to cut costs where you can and get a savings plan. As prices continue to rise and incomes (well don’t) it’s important to keep debt to a minimum and look out for yourselves and your family. Remember, you don’t have to have everything brand new and it takes time to accumulate things. When people get married today they think they need a house and everything in it. In the past newly married couples would start out with furnishings they got from a family member, at a yard sale, or just do without. But today the expectations Americans have can sometimes get out of control.

Average Debt and Savings
Infographic by Thomas PetersView Larger Image

One comment on “Average American Debt and Savings

  • does this include holding a mortgage?? My mortgage is $150K on a house that appraised at $205K last month. Does this mean I am $32K more in debt (150-118) than the average American??

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