Image source: Quozio.

Let's face it: Debt makes you fragile. This seems obvious in a financial sense, but it goes much deeper. High levels of debt can affect your physical and emotional health via your body's natural stress responses. And when debt must be paid off, professional options are limited to those that can help you make your payments -- not necessarily those that are intrinsically satisfying.

Of course, some forms of debt have traditionally been considered "good." Primarily, that has come in the form of a mortgage or student loan -- largely because these two either create equity in a home, or open doors of professional opportunity. That being said, either can be taken to extremes and become "bad," too.

So, how in debt are you, and how does that compare to the average American?

Every quarter, the Federal Reserve Bank of New York releases a report on indebtedness in America. The organization offers data on per capita debt based on the total population of those with a credit score. According to the Fed's data, the average American is $46,150 in debt.

Digging deeper into our debt
This figure alone might not tell the whole story. As I said, there are lots of different types of debt -- and levels of debt can vary widely based on where one lives in America. The Fed breaks down these different types of debt into six categories, and across 11 different states.

Go ahead and figure out your own household's level of debt right now. Remember to divide that figure by the number of individuals with a credit score living in your house. Then look below to see how you compare to the "average" American. (Hover over the chart to get exact figures.)

Sage advice from Buffett
The Oracle of Omaha has hundreds of memorable quips. One of my favorites is, "Price is what you pay, value is what you get." While Buffett was referring to stocks, you can apply the same concept to virtually every area of your life.

For instance, when it comes to our material possessions, study after study has shown that although something new and shiny provides a momentary bump in happiness, it disappears very quickly. The stress of long-term debt, on the other hand, can stay with you for decades. The key to long-term happiness has more to do with meaning, purpose, and relationships.

Of course, all creatures need access to certain material possessions. But sometimes, we take it to the extremes. The quote that started the article comes from Armando Fuentes, dubbed "The Wise Man," in Mexico. He explains why people in certain pockets of Mexico routinely show up as having the highest levels of happiness in the Western Hemisphere -- despite the fact that many outsiders consider the country to be poverty-stricken and over-run by drug cartels and, therefore, home to many unhappy people.

Though we don't need to adopt the same lifestyle as those in other countries, there are a few simple steps that can help reduce our debt -- and leave more space for life satisfaction to creep in:

  • Mortgage: Instead of trying to "buy all the house you can," focus only on buying what you need. Further, only make the leap to home ownership when you're relatively certain you've found a community you want to be a part of for the long haul.
  • Autos: Many used cars will run just as well as new ones, and at a significant reduction in price. If you can live near work and school, you might not need a car at all.
  • Credit Cards: Unless it's an emergency payment, never pay for something on your credit card that you can't pay off at the end of the month.
  • Student loans: Getting a degree is important, but there are many paths to arrive at the same place. Make sure you explore all of them -- especially starting at a community college before transferring to your state's four-year university.

Hopefully, these steps can help just about anyone lower their levels of debt, and focus on saving up for a comfortable retirement.