Summit Group Retirement Planners, Inc. – Retirement in America
Understanding Debt in America
According to the Merriam-Webster Dictionary, debt is defined as something owed, an obligation, or a state of owing. It is the opposite of ownership. In this article, I will review the importance of having a plan and budget while also discussing consumer debt, and its impact on our ability to live our lives let alone plan and save for our retirement.
Per an article from the Balance by Kimberly Amadeo, consumer debt is what you owe. Other types of debt for example could be corporate debt or governmental debt. Consumer debt can also be referred to as consumer credit which can be borrowed from a bank, a credit union, or the federal government.
The two types of consumer debt are revolving and non-revolving. Often credit card debt is referred to as revolving as the intention is to pay it off each month. According to loan.com, when we hear non-revolving, we understand it typically to be an installment loan or fixed payment loan, which is a loan paid off with regular monthly payments over a period of time. Examples of this type of debt are education and auto loans.
Borrowing some more statistics from the Federal Reserve, in November 2018 U.S. consumer debt rose 6.75% to $3.979 trillion. Of this increase, revolving credit rose at an annual rate of 5 ½% and non-revolving credit increased at an annual rate of 7%. According to an article by Melanie Lockert of Student Loan Planner, there are over 44 million student loan borrowers in the U.S. Student loan debt is the largest pool of debt in our country aside from housing debt, and ahead of auto debt, credit card debt, and other consumer debt. A few more alarming statistics surrounding student debt are the total student loan debt = $1.44 trillion; The student loan delinquency rate = 11.5%; and graduates with student loan debt = 65%.
Summit Group Retirement Planners, Inc. – Key Takeaways
All of these factors are creating an environment where it is more difficult to save money for now and the future. One of the keys is developing a written budget and a plan to go along with that budget that you can realistically follow. Although we provide budget and debt counseling services with our clients, there are other avenues to explore that can assist you in putting together a budget and a plan to not only be debt free, but to begin saving money for your future. A popular resource in the financial counseling field is Dave Ramsey. A book that I read that was very informative that he wrote is called “The Total Money Makeover”.
As with all problems, there are many ways to address them. The first step is always to face the issues head on and focus on what steps you can take to address them. There are amazing stories of people that have been deep in debt and then paid all of it off and got back on their feet. My hope is that you receive this information with hopeful optimism and don’t ever give up regardless of your current situation. Take the time to thoughtfully develop your plan, implement your budget, and do your best to pursue that plan one day at a time.
For further information, please contact a Summit Group Retirement Planners, Inc. Representative: 267-433-1051 or Dfiorenza@sgretirementplanners.com. Summit Group Retirement Planners, Inc. specializes on collaborating with employers on the design features, installation assistance, and ongoing servicing needs of their retirement programs.
Investment advice offered through Summit Group Retirement Planners, Inc., a registered investment advisor.
Author: Derek Fiorenza – COO/CCO Summit Group Retirement Planners, Inc.
Categorised in: Uncategorized
This post was written by Tiffany Bellamy