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Thread: Household Debt Increased for the 19th Quarter

  1. #1
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    Household Debt Increased for the 19th Quarter

    "You load 16 tons and what do you get?
    Another 3 months older, and deeper in debt."
    -- with apologies to Tennessee Ernie Ford


    The trend continues. American households' debt balances have been increasing for 19 quarters, as of Q1 2019, to about $14 trillion.

    Housing affordability is constrained by the high level of non-housing debt (student loans, car loans, and credit card balances). The National Association of Realtors say that the median age of a home buyer in the USA has risen to a record of 46. NAR has been keeping records since 1981.

    We probably all know of millennials who have moved back in to mom-and-dad's and/or delayed family formation. In my opinion, for a young adult with a negative net worth, these are lifestyle decisions that can help move their negative net worth in the direction of a positive number.

    I see student loan debt is a huge factor in the rising non-housing debt. So, I would say higher education is better saved for (like with 529 college savings plans) than borrowed for. There are 2.2 million borrowers with student loan balances greater than $100,000.

    http://www.newyorkfed.org/microeconomics/hhdc.html

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    Senior Member razz's Avatar
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    It is serious debt, add in the corporate and all levels of government debt and the whole world is in a state of debt. As long as the debt can be covered by loans, we are good but when the loans whether at individual, local, municipal or beyond are called in for payment, reality will cause significant problems for the average person.
    Gandhi: Happiness is when what you think, what you say and what you do are in harmony .

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    I didn't go into any debt to go to college and I'm glad because I don't think it would have been worth it. Maybe if you go to Harvard Law or something, but not in my case.

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    We paid cash for my 4 college degrees.

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    I've been having the same thought I did before the 2008 recession...how are folks affording all these new cars, toys, tech etc? House of cards.

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    You can easily spend 50k for a new truck. I don’t understand how young families afford that.

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    Senior Member SteveinMN's Avatar
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    Quote Originally Posted by Teacher Terry View Post
    You can easily spend 50k for a new truck. I don’t understand how young families afford that.
    Do they? Or do they wait a couple of years and buy a trade-in from someone who has to have it new, at 60% of the new price? Still, that's $30-35K and a big monthly payment for at least a few years.

    I do agree with the general point here; I look at a lot of prices for houses, cars, smartphones, and all their associated stuff -- and wonder how people are doing it. But I wondered the same thing 30 years ago when Wife #1 and I moved into a new townhouse community near an established $$$$ neighborhood and marveled at how many of those nice houses (going for about half-a-million nowadays) had two nice recent-model cars in the garage and a full complement of kids' toys and couples about our age playing with the kids or mowing the lawn. W1 and I both had good jobs in IT and we weren't making that kind of money. Or at least we didn't think we were.

    I think that's when I decided that there were lots of people out there much more willing to go into and stay in debt than I was.
    Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome. - Booker T. Washington

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    Every job I had, I negotiated classes that would help me with my current position and asked them to pay for it. It turned out I paid a total of $5,000 for my education. I made that money back the first year after college. I was paid about $7,000 more than previously at a journeyman level and it increased for years thereafter. For me, college was definitely worth attending.

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    Steve, I actually know people that bought new.

  10. #10
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    Debt is like any other tool. You can use it effectively or you can hurt yourself with it. I understand the average college debt is something like $25K on leaving school. That doesnÂ’t seem so unreasonable to me. I donÂ’t think mortgage debt is necessarily so bad if you stay within the confines of what you can afford.

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