45% Of Americans Spend Up To Half Their Income Repaying Credit Card Debts

Tyler Durden's picture

On several occasions we've pointed out that the baby boomer generation is, to put it mildly, ill-prepared for retirement.  In fact, over 50% of baby boomers have basically no savings set aside for retirement at all.  Now, a new survey from Northwestern Mutual helps to shed some light on why Americans are completely incapable of saving money. 

First, roughly 50% of Americans have debt balances, excluding mortgages mind you, of over $25,000, with the average person owing over $37,000, versus a median personal income of just over $30,000. 

 

Therefore, it's not difficult to believe, as Northwestern Mutual points out, that 45% of Americans spend up to half of their monthly take home pay on debt service alone....which, again, excludes mortgage debt.

 

Of course, if Americans are incurring this much debt then it must be for absolute necessities like healthcare and basic nutritional needs, right?  Afterall, the entire federal entitlement farce is dependent upon helping good hardworking, trustworthy Americans who, for the most part, spend their money wisely but sometimes need just a little extra help to make ends meet.

Well, at least that's the illusion that Democrats would love for you to subscribe to...unfortunately it couldn't be further from the truth.  In reality, the Northwestern Mutual survey found that Americans spend 40% of their monthly income on discretionary expenses including "entertainment, leisure travel and hobbies." 

Adding insult to injury, nearly a quarter of all respondents said that "excessive/frivolous spending" was the cause of their debt problems.

Aside from basic necessities, on average, Americans spend about 40% of their monthly income on discretionary expenses such as leisure travel and hobbies. In fact, one quarter cite “frivolous/excessive spending” as a financial pitfall.

 

Meanwhile, nearly 20% of people can only afford to make minimum payments each month on their credit card debts.

 

So, for the taxpayers of this great country, rest assured that your tax dollars are being put to good use to buy Joe and Jill Schmo a nice annual trip to Cancun.

Full survey results here:

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IridiumRebel's picture

Debt slavery: it's everywhere you want to be!

espirit's picture

 

Debt Bitchez.

 

Debt is not Wealth. Repeat it as necessary.

  

remain calm's picture

Very Sad, although this would be a good time for the spam about making 7000 a month at home eating cheese puffs.

J S Bach's picture

500 years ago, the Town Crier would have yelled a similar headline to the peasants:

"45% of Europeans Spend Up To Half Their Income Repaying Usurious Money Lenders!"

The more times change, the more they stay the same.  Suckers.

Bigly's picture

45% on credit cards, 50% on housing, 20% on autos.

 

Hey, why are mericans so fat? They cannot afford food. Or do they use cards to buy food? It does not add up...

FreeShitter's picture

lol Mmst muricans just dont take care of their diet. Obviously eating at fast food joints all the time is almost as bad as smoking.

NoDebt's picture

<NoDebt fires up another smoke>  I'm sorry, son, what were you saying?

 

pugilist's picture

>Of course, if Americans are incurring this
>much debt then it must be for absolute
>necessities like healthcare and basic
>nutritional needs, right?

iPhones. they'r spending all their money on iPhones.

Bigly's picture

Whoops, add 25% for weed.

We are way over 100% at this point.

5 for 1.00 ramen noodles?

CheapBastard's picture

I worked two jobs after college to get out of debt. Luckily, rice and beans and sardines are actually pretty healthy. And walking or bicycling  to work cause I could not afford a car was a good heart work out.

Never got in debt again. You lose your freedom of movement, ideas, and self-esteem when you become a debt slave imo.

Discipline and go without for awhile and pay it off. Don't have the money---then don't buy it!

Bubble Man's picture

While I agree with you that if "Don't have the money---then don't buy it!" motto, there is something very wrong to enslave the people with 20-25%-plus interest rates on their credit card debt when the fed funds rate is under 1%. Basically you can borrow $1 billion with fees that resemble an atm fee for the common folk.  I am sure that covers up a lot of money mistakes for the elite.

My response to every America that is saddled with 45% or so of their net inome on credit card debt would be to default.  The rich do it all the time.  It's time to think outside the box.  After all credit card debt is all just debt.  It's not real money. And in 5-10 years or so depending on your state's statue of limatations it can't be awarded to the owner in a court of law.  Learn your lesson, start saving, and move on with your life.

 

StagStopa's picture

 

 

Paying off cc debt, teehee.

Easy to stall, befuddle, make em jump through hoops, prove the debt is real, then back those fuckers into a corner. It's fun, too.

They cant. Banks are stupid, really.

Everything is digital. They won't be able to produce ANYTHING real.

Fuck em.

Roxi

techpriest's picture

Hey, why are mericans so fat? They cannot afford food. Or do they use cards to buy food? It does not add up...

Knowing this from experience - When you are poor, you buy on a dollars-per-calorie basis. Look in an American store and look at which foods have the best ratio - it ain't veggies, fish, and grass fed meat.

CheapBastard's picture

You can still eat cheap---beans, sardines, etc are pretty cheap. But most people desire the rich tasty stuff as you say.

 

It does take a lot of discipline. I have about 85% discipline but still get suckered in for chocolate ice cream.

techpriest's picture

That's a good point. Eggs are usually cheap. And during summer we picked berries from the park. The other thing that helped me at the time was that my bike was my main source of entertainment.

The other factor I forgot about is time. If you are working 12 hours a day, you are too tired to cook, meanwhile $6 a plate Chinese will get you all the calories you need.. Of course, burned vegetable oil with a load of sugar in sauces (and don't forget the white rice) will fatten you up fast.

Houses Depreciate's picture

Picking berries while throwing good money after bad every month on that rapidly depreciating house?

 

Use your head.

American Psycho's picture

The misses and I cook our food in bulk.  I religiously eat 7 oz of boiled chicken, half cup of brown rice (cooked) with a green salad for lunch every day.  Have some hard boiled eggs and oatmea (not that flavored sugar shit)l for breakfast and you are halfway there for daily caloric intake.  If you have food prepared, then there is no reason to cut out and grab some fast food.  You can make the arguement that the dollar menu is cheaper, but I would argue that you are only getting empty calories.  I don't eat for taste, I eat for function. 

American Psycho's picture

I forgot to add that I also work over 60 hours per week.  Good nutrition will carry you a long way. 

Houses Depreciate's picture

By the way you're getting squeezed from that massive mortgage payment I'm not surprised.

Houses Depreciate's picture

Thanks for the menu. Do you post pictures of it on facebook too?

RafterManFMJ's picture

Sardines and spam ain't cheap. Ask me how I know!

Bigly's picture

For ZHers in the Northeast:

Price Rite saves 30-40% without coupons.

Part of the ShopRite family of stores.  They are increasing organics and are ok for some staples. If you are vegan or pure clean and only shop whole foods, it's not for you.

If you are pressed for cash, go and see what you can save.

 

 

 

Rapelomacy's picture

Just wanted to let you know the owner of that company pays $30,000.00 for a full tank of diesel on his 3500hp turbo MTU powered mega yacht...

Maynard G Krebbs's picture

But, the Government takes an additional 38% of your check for taxes....Ahh ,you must be thinking net vs gross percentages. Most people live in a gross economy

NoDebt's picture

You ever hear of primary schools giving basic classes in money management?  I'm not talking about running a hedge fund.  I mean a basic class that teaches budgeting, savings, investment and borrowing?  They'll teach you everything else- from how to use birth control to Barack Obama praise songs, but not a fucking WHISPER about how to handle money.  You know, that thing that everyone has to deal with on an almost daily basis in their everyday lives.

Knowing how to handle money is racist, I'm sure.

 

 

 

ToSoft4Truth's picture

Your frame is delegating parental duty to the schools.

 

Like Reagan expanding the free lunch programs at public school.   Now the entire 50 and under crowd expect free lunch all the time. 

 

DHS says, "If You See Something, Say Something™"  Notice DHS trademarked the blurb, If You See Something, Say Something™  

 

If you see economic retards, host an Econ Training course in your garage. 

CheapBastard's picture

Home Economics used to be a required high school course.

 

Now, it's required to take, "White Preivilege," "Am I really a Boy?" and " it Takes a Village."

techpriest's picture

You ever hear of primary schools giving basic classes in money management?

Dave Ramsey has created a financial management class and has apparently put it in front of millions of high school students. He would rather make money on his SmartVestor program than on Financial Peace University, if you get my drift.

brushhog's picture

They'd have to import the teachers from Asia. Its lost knowledge.

remain calm's picture

Well the Federal government did lead by setting a good example. I mean does debt even matter, its actually the 'new' growth in America

techpriest's picture

The real shocker is that 37% of those surveyed are paying 25% OR MORE on repayment. At my very lowest I was paying ~13% to pay off a credit card, $200 a month on an ~$1800/month income. I can only imagine what kind of nightmare a 25% or greater payment on debt, alongside cost of living, would have been like at the time.

Looking back, I was thinking about that nightmare a lot because my mailbox was stuffed with personal loan offers. No thank you!

espirit's picture

Annoying dupe.

 

 

  

Parabolic Sine's picture

Is it long term debt or short term? I buy everything with my credit card and pay it off every month. Its easier to deny a fraudulent charge compared to my debit card and I dont like carrying more than $50 in cash plus my plane tickets are free from the points when I go on vacation. Im sure lots of people do the same thing. Yes its construed as debt, but the rewards are a bonus i otherwise wouldnt have. me and my womans round trip plane tickets to Cali cost me nothing this year from PA. Managed debt can be a positive.

Reverend.Pajama.Pants's picture

It's time for a palintokia.  (Google it, learn some history, imagine a better future.)

Expectorant's picture

Debt (..until Death) and Taxes

Climb's picture

Don't be fooled... This is by design. 

gdogus erectus's picture

Pfffft. What are the other 55% doing?

Anderson Coopers Gerbil's picture

When you hit your max increase the limit

NoDebt's picture

Correct.  You can only spend in one year what you make plus the sum of all your credit limits plus how much you think you can get them to raise your credit limits next year.  Spending any more that that wouldn't be prudent.

 

yogibear's picture

Apply for multple credit cards.

Max out all your credit cards an buy gold and silver, then skip out.

Soul Glow's picture

My girlfriend spends any excess cash she has paying off her debt instead of saving it.  Me, no debt so I stack that silver!

RabbitOne's picture

If you marry your girl friend it is: Hi Oh Silver Away!...

roisaber's picture

I spend half my income just to keep a roof over my head - we're all suckers here.

paradox's picture

See that's the real problem here and why all of these suckers on here know it.

Salsa Verde's picture

Prostitutes and drug dealers only take cash, they are above the curve.

nufio's picture

maybe there is a potential business opening here to lend for such services.

espirit's picture

 

Seems the legal MJ market also takes cash.

Wonder who launders their fiat?