Here's the average debt balances by age group: Gen Z (ages 18 to 23): $9,593. Millennials (ages 24 to 39): $78,396. Gen X (ages 40 to 55): $135,841.
The average American has $90,460 in debt, according to a 2021 CNBC report. That included all types of consumer debt products, from credit cards to personal loans, mortgages and student debt.
If you take a closer look at average debt by age, those in the younger part of Generation X, between the ages of 35 and 44, had $93,700 of debt, with the older half of this generation (between 45 and 54 years old) close to that at $89,900.
Most debt belongs to 35- to 49-year-olds; borrowers aged 62 and older owe the most on average, exceeding 35- to 49-year-olds by 0.4%. 35,600 federal borrowers aged 24 years and younger owe an average $11,517 each for a total of $410 million.
A good goal is to be debt-free by retirement age, either 65 or earlier if you want. If you have other goals, such as taking a sabbatical or starting a business, you should make sure that your debt isn't going to hold you back.
The average credit card holder in the U.S. had $5,668 in credit card debt in Q2 2021 — that's 1% higher than Q1 2021's $5,611 average. From the first Q1 2020 to Q2 2021, the average credit card debt per cardholder decreased by $766 or 12%. The average cardholder had $6,434 in Q1 2020.
The most common mortgage term in the U.S. is 30 years. A 30-year mortgage gives the borrower 30 years to pay back their loan. Most people with this type of mortgage won't keep the original loan for 30 years. In fact, the typical mortgage length, or average lifespan of a mortgage, is under 10 years.
It found that about 54% of Americans live paycheck to paycheck. And nearly 40% of high earners — those making more than $100,000 annually — said they live that way.
How much debt is a lot? The Consumer Financial Protection Bureau recommends you keep your debt-to-income ratio below 43%. Statistically speaking, people with debts exceeding 43 percent often have trouble making their monthly payments.
Most lenders say a DTI of 36% is acceptable, but they want to loan you money so they're willing to cut some slack. Many financial advisors say a DTI higher than 35% means you are carrying too much debt.
Bottom line, if your credit card debt is only a little over $2,000, don't worry about it. I'm sure you'll get sick somewhere along the line and owing $2,000 will seem quaint.
Increased Savings
That's right, a debt-free lifestyle makes it easier to save! While it can be hard to become debt free immediately, just lowering your interest rates on credit cards, or auto loans can help you start saving. Those savings can go straight into your savings account, or help you pay down debt even faster.
Even though household net worth is on the rise in America (at $141 trillion in the summer of 2021)—so is debt. The total personal debt in the U.S. is at an all-time high of $14.96 trillion. The average American debt (per U.S. adult) is $58,604 and 77% of American households have at least some type of debt.
What is the 50-20-30 rule? The 50-20-30 rule is a money management technique that divides your paycheck into three categories: 50% for the essentials, 20% for savings and 30% for everything else.
How much money has the average 30-year-old saved? If you actually have $47,000 saved at age 30, congratulations! You're way ahead of your peers. According to the Federal Reserve's 2019 Survey of Consumer Finances, the median retirement account balance for people younger than 35 is $13,000.
A Critical Number For Homebuyers
One way to decide how much of your income should go toward your mortgage is to use the 28/36 rule. According to this rule, your mortgage payment shouldn't be more than 28% of your monthly pre-tax income and 36% of your total debt. This is also known as the debt-to-income (DTI) ratio.
According to Bankrate's survey, 25% of Americans have no emergency savings. That's why the high savings rate during the pandemic does not tell a full story, said Greg McBride with Bankrate. “That has certainly not fallen evenly across all households,” he said. Low-income households had a hard time saving.
The average American's savings varies by household and demographic. As of 2019, per the U.S. Federal Reserve, the median transaction account balance (checking and savings combined) for the American family was $5,300; the mean (or average) transaction account balance was $41,600.
What percentage of Americans makes over 100k? About 30.7% of households earned over $100,000 in 2020. In 2019, around 15.5% of Americans earned between $100,000 and $149,999; about 8.3% of the population earned between $150,000 and $199,999; and about 10.3% of the population earned over $200,000.
Paying off your mortgage early can be a wise financial move. You'll have more cash to play with each month once you're no longer making payments, and you'll save money in interest. ... You may be better off focusing on other debt or investing the money instead.
Paying off your mortgage early frees up that future money for other uses. While it's true you may lose the tax deduction on mortgage interest, you may still save a considerable amount on servicing the debt.
When a lender or landlord reviews your credit, it might use one of two credit scoring models: VantageScore or FICO. Both scoring models range from 300 to 850. And according to a July 2021 VantageScore report, the average credit score in America is 697.