By Jamie Wagner, Ph.D.

Spooky Tales of Debt

Every October my husband and I begin our Halloween tradition—scary movie month. Colin loves scary movies, and I think I do except that I’m a huge baby and get scared so easily that I have to watch something “happy” before I go to bed. In the spirit of Halloween, here are some scary facts about American debt and spending that might just keep you up at night.

Debt By the Numbers

1. The 2015 National Financial Capabilities Study finds that 56 percent of respondents spend equal to or more than their income.

This means that more than half of Americans are spending so much of their income that they do not have savings. Of the 56 percent, 18 percent spend more than they make in income. This is not sustainable and frightful. A household cannot continue this pattern for too long because eventually an emergency is going to happen where they need to use some of their savings.

2. The average student loan balance is $39,400 for 2017 college graduates.

College graduates are leaving with a lot of debt (an all-time high) and up 6 percent from last year. While Money reported that the average salary for this graduating class was just shy of $50,000, there is a wide discrepancy and range of salary among the most popular majors according to another article by Indeed. Those who graduated in 2017 could be leaving school with around $39,400 in student loan debt while making $30,000; this is the start to a money horror film.

3. Almost half (48 percent) of respondents of the National Financial Capabilities Study with student loan debt report that they are concerned they may not be able to pay off their debt.

If the previous spooky fact didn’t concern you in regards to the shear amount of debt, this scary fact shows that people are seriously concerned that they may not be able to pay back their debt. Failure to make payments on time can lead to additional fees and fines. This can also lower a person’s credit score which can have lasting negative and costly effects for years to come. Besides the negative impact monetarily, being concerned about paying back debt can lead to stress which can have so many impacts on a person’s mental health.

4. In 2017 credit card debt surpassed $1 trillion.

People are continuing to spend with money they do not have. Credit card debt is increasing and has reached a new (and scary) milestone. To continue the scary story, average credit card APR is almost 15 percent, which means this $1 trillion in debt will snowball into a horror story soon.

5. Credit card balances average $6,354.

While it might not shock you that average credit card balances are up to $6,354, it should make you want to pull up the covers and hide thinking about how much money people have in outstanding balances on their cards.

Tricks to Reduce Debt

While ghosts and goblins might not frighten you like they did when you were a kid, these scary money facts should be enough to give any adult a reason to sleep with the lights on. To avoid being part of these haunting facts, be mindful with your spending.

  • Ask yourself if you really need a certain item now and if you could avoid using your credit card and save money and purchase it in a couple months.
  • If you have future college bound kids, help them begin planning and saving now.
  • It is also wise to make sure you’re only borrowing for what you need to avoid over borrowing and having to pay for it later.

Additionally, you may want to consider seeking help from a professional to get you back on track. You can always speak with one of Centris’ service representatives, and they can help you navigate the scary financial world.

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