Published in: Credit Cards | Oct. 27, 2019

The 5 Spookiest Facts About American Finances

By:  Kailey Hagen

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These statistics are scarier than any ghost story.

Happy Halloween!

Telling scary stories is a popular pastime on this spooktacular holiday, so I thought I'd tell one of my own. Usually, these stories are filled with ghosts, urban legends, or crazy ax murderers, but sometimes the truth is scarier than fiction.

two young boys in Halloween costumes making scary faces.

Image source: Getty Images

I dug deep into The Ascent's research vault and found some of the most disturbing facts about Americans' finances -- the kind that can (and probably already do) keep even the bravest among us up at night.

Read on if you dare.

1. Americans now carry a collective $868 billion in credit card debt

Student loan debt gets a lot of attention, and rightfully so, but credit card debt is almost as big of an issue. A recent Ascent investigation of the state of credit card debt in America found that credit card debt topped $868 billion as of the second quarter of 2019. That's an increase of 4.7% from the year before. The same data indicates that delinquencies are also on the rise.

There's no quick way to resolve this issue. Reducing spending on discretionary items, seeking out ways to increase your income, or transferring your balance to a card with a 0% introductory APR can all help, but even this can still take months or years to pay off. If you want to pay the lowest amount overall, make the minimum payment on all cards and put all of your extra cash toward the card with the highest interest rate first.

2. 2017 graduates who took out student loans left college with an average balance of $28,650

A college education comes at a high cost. The Ascent's research on student loan debt statistics found that among the 2017 graduates who carried student loans, the average student debt burden was close to $30,000 at graduation. For many recent grads, that's about a year's salary. Starting a career with a mountain of debt makes saving for the future -- or paying off other types of debt -- much more challenging.

Private student loan lenders may not offer you much choice in terms of how you repay your loans, but the good news for federal student loan borrowers is that there are several repayment plans to choose from. Some are tied to your income, help limit the size of your monthly payments, and keep you out of default.

Some graduates may also qualify for loan forgiveness programs like the Teacher Loan Forgiveness Program or the Public Service Loan Forgiveness (PSLF) Program.

3. Americans in 15 states owe more than they earn annually

Any amount of debt can be stressful, but debt that exceeds your income will get your heart pounding. And it's a reality for the average American in 15 states, according to The Ascent's research. The states in question are Arizona, California, Colorado, Delaware, the District of Columbia, Georgia, Hawaii, Idaho, Maryland, Nevada, Oregon, South Carolina, Utah, Virginia, and Washington. The per capita debt balance exceeds the per capita income in every one of them.

A high cost of living is part of the problem in some of these states, but whatever the reason, failure to get your debt under control can leave you unprepared for emergencies and may even damage your credit.

This doesn't mean every citizen in these states carries debt, but many do. Paying it off may not be easy, but sticking to a budget and paying off your high-interest debt first helps. Try to avoid taking on new debt until you've paid off what you already owe and seek help from a financial adviser if you aren't sure of the best way to tackle your debt.

4. Women's median earnings were still only 81% of men's in 2018

The above debt statistics are tough for anyone to swallow, but especially so for women. As of 2018, women's median earnings were just 81% of men's, according to The Ascent's research on the gender pay gap. This is a significant improvement over the measly 62% of men's median earnings that women earned 40 years ago. But true pay parity might still be a few decades away. 

It's no surprise that single women and female-headed households are more likely to be poor than single men and male-headed homes, but figuring out how to solve this issue is challenging. Many female-dominated professions like teaching and nursing don't have as many opportunities for advancement as many male-dominated fields do, and this can significantly hamper a woman's lifetime earning potential. That's just one of the many issues at play here.

5. Only 3% of Americans spend time on household financial management on an average day

Despite the significant financial challenges many Americans are facing today, 97% of Americans don't devote any time to managing or improving their finances on a day-to-day basis, according to Ascent research on the amount of time Americans spend on personal finance. The study also found that the 3% of Americans who spend time on household finances every day only spend about two minutes doing so. That's better than nothing, but it takes more to come up with a plan for debt repayment or saving for a goal.

If you have debt or you're trying to save up for a big event, like buying a home or retiring, carve out some real time to make a plan. Talk with a financial adviser if you're unsure of how to achieve these goals, but don't give up. Kicking the problem down the road only makes it more overwhelming when you finally have to deal with it.

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