Borrowers in 13 states now owe more than they make in a year and the average household pays a dollar out of every $5 in income just to make monthly payments to debt.
It’s not just how much debt you owe but also how much you make to pay off that debt. People in the District of Columbia owe more than any other state but also have one of the highest annual incomes.
Borrowers in thirteen states owe more than their median household income. That’s not to say that the rest of the states are off-the-hook. The average debt-to-income of 91% shows it would take nearly a full-year’s income to pay off household debt.
We’ve always been a consumer nation. Consumer spending drives more than 70% of the economy.
Getting a loan isn’t bad. I see a lot of debt-free blogs telling people to pay off all debt and cut up the credit cards. I guess I’m more of a debt agnostic. It’s ok to borrow money as long as you know how to do it right.
– Borrowing to buy a home offers rewards beyond the money and you can deduct the interest from your income for taxes. – Most businesses borrow to invest and buy equipment. Getting a loan makes sense if you can turn it into a higher rate of return.