Bad news, Americans are stuck in debt. In fact, 33% of Americans hold delinquent debt that is currently in collections, according to the Washington Post. And they don’t exactly have a plan to pay it off, either. In fact, it is estimated that by the end of 2018, consumer debt will have reached $4 trillion.
The growth of consumer debt is outpacing repayment – which means we’re only digging ourselves into a deeper hole. In fact, many Americans owe nearly one-third of their annual income in debt by spending on things they cannot afford.
According to NerdWallet, there are two main ways Americans are accumulating debt:
Americans are swiping their credit cards faster than the Road Runner – well, not quite that fast, but still very frequently. And many of the things they are buying are for unnecessary items. Anything from extra electronics, to furniture, to clothes. Americans are also spending on unplanned non-medical emergencies – evidence that most Americans aren’t saving.
Apparently, Americans like cars, too – because they’re spending a pretty penny on them and digging a deep hole of debt as a result. Cars are rarely seen as investments unless they are a classic, so one may want to reconsider sinking their hard-earned money into new vehicles.
The good news is, there is a way for Americans to climb themselves out of debt. NerdWallet suggests paying off your credit card bill in full each month or at least paying more than the minimum required payment. They also suggest you dedicate a certain amount of money each month to paying off other debt. With small tips like these, you won’t need a “lifeguard” to jump in and save you. In fact, you can be your own hero, riding a wave of debt until you make it safely to shore.