Comparing Household Income to Household Debt

Household income

What exactly is the picture?

According to economists after one has made the necessary adjustments for inflation then one comes to the conclusion that household debt has grown 15% faster than comparative household income since the early 2000’s. This is not good news for a consumer but apparently things have improved slightly from the position where it was in 2009 during the recession when there was a staggering difference between income and household debt of over 40%. The one benefit that came out of the recession was the fact that it left US citizens with no other choice but to adapt financially. This was definitely not easy for people with certain spending habits but it was still necessary to keep the growth of consumer debt under control. Many people still had no other choice but to make use of professional services such as these The first step on the road to financial freedom will always be to cut expenses as much as possible. In principle this sounds very simple but actually committing to it is not only necessary, it is crucial. A consumer needs to pay attention to their income and they have to know how much of that income could be spent. In order to practice excellent financial management it is important to determine whether expenses could be decreased. Consumers have to find a way to save at least a portion of their income.

It is important to be proactive

You need to analyze all of your current expenses and you will have to make some serious decisions about whether all of them is really essential. In this age of smartphone technologies is a landline phone still essential? Do you really need to maintain two motor vehicles when only one may be sufficient for your needs? There is always some way in which to reduce expenditure which will leave the consumer with more leeway as far as their finances are concerned. The money saved on unnecessary expenses can be used to repay unnecessary debt more quickly. The process of financial management may be significantly more difficult for some people but these people should not lose hope. Although the employment market may not be what it was a decade ago, it might be sensible to consider alternative employment options. Every consumer has to make at least some attempt to increase their income potential while at the same time they should learn to spend less and by doing so they will make it easier for themselves to deal with unnecessary debt.

Are the people ashamed of credit card debt?

There is no other explanation for why people lie about their credit card debt. In fact, the difference between the credit card debt which is claimed by consumers and the numbers which is released by lending companies shows a difference of over $400 billion in 2013. It should be adequately clear that US citizens is actually claiming to be having less debt while in reality these to statistics clearly show those claims to be false. This may be because some people still feel that there is a certain amount of stigma associated with credit card debt and therefore they would rather downplay their credit card debt rather than to admit the real figures for which they are actually responsible.

Speak Your Mind