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Average American Adult Owes $30K, Spends 34% of Monthly Income on Debt

© Pixabay/CC0Credit cards, $50 bill USD
Credit cards, $50 bill USD - Sputnik International
Depression and debt are now part of the American dream, according to recent data from US financial services company Northwestern Mutual that claims the average individual is nearly $30,000 in the red and may even be left in a cycle of anxiety because of it.

Northwestern Mutual published on Tuesday “The Debt Debacle,” which detailed how US adults’ debt rates across several generations impacted people’s attitude and behavior by sampling 2,003 American adults aged 18 or older in an online study between February 20 and March 5, 2019.

The data reports that, overall, the average individual within the general population of the US is around $29,800 in debt - and that total does not even take mortgages into account.

When broken down by generations, Gen Z, or those born between 1995 and 2010, have the lowest average amount of debt: $14,700. The average member of Gen X, born between 1960 and 1979, however, has a whopping $36,000 worth of debt.

Baby boomers, aged 54 to 72, and 22- to 37-year-old millennials’ average current debt totals came in at $28,600 and $27,900, respectively. While 18% of the baby-boom generation reported having four or more credit cards, millennials are the group that reports credit card bills as their leading source of debt.

Nationwide credit card debt has reached a total of $868 billion, according to an estimate from the Federal Reserve Bank of New York.

As one can guess, the issue of debt can take a heavy toll on an individual’s mental state - especially if they have children or other individuals depending on them. Among all respondents, at least 45% say that their debt gives them anxiety at least once a month, while 35% say they feel guilty for the sheer amount of debt hanging over their head.

A portion of these varying degrees of finance-related stress may be explained by the estimate that 15% of American adults believe that they will be stuck in debt for the rest of their lives. Another explanation could be rooted in data that shows that, on average, an individual in the red is forced to use 34% of their monthly income to pay off debt.

"Our data, along with national numbers, show that people continue to struggle with finding the right balance between spending now versus saving for later," Emily Holbrook, senior director of planning at Northwestern Mutual, said in a company press release. “There are steps people can take to get control of their debt. It might start with loan consolidation and a budget, then move to a longer-term plan that includes guardrails to help people stay on track.”

Holbrook went onto to stress that taking action and following through on the first steps is the most important part of getting out of a depressive debt cycle.

It’s worth noting that “results were weighted to Census targets for education, age/gender, race/ethnicity, region and household income,” according to the full report.

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