The Average Debt Load in America is $100,000 – How Do You Compare?

The goal of this site is to prompt you to be weird beyond belief. And by that I mean wealthy. The average American is broke. Actually, the average American is worse than broke, they’re $100,000 in debt. According to Nerdwallet, debt is on the rise again:

Average debt load in America

The average credit card debt is $6,184. On top of this, add car loans, student loans, and mortgage debt to the mix and the average debt load in America is $99,835.73.

For some of you, this might actually seem low. Your mortgage debt alone probably totals more than $100,000. And if that’s the case, you’re worse than the average.

The Average Road

At one point in my life, I was $18,000 in student loan debt, a few thousand bucks in credit card debt, and I had a mortgage of $70,000. I was pretty much average according to the charts above.

Some of you are right where I was five years ago. You realize that you’re about average and that’s okay with you. You continue to piss your money away at restaurants, festivals, and concerts each weekend and think nothing of it….because after all, you’re doing alright. No worse than anyone else.

Do you realize where this mentality leads?

Bankruptcy.

Ask anyone that has gone bankrupt before and they’ll tell you. They didn’t think they were out of control. They earned a good wage, paid all their bills on time. Life was good. And then something happened that turned their lives upside down:

  • Job loss
  • A tragic accident
  • An unexpected tax bill

Suddenly the monthly bills become impossible to pay, you get behind, and there’s no catching up.

This is what being content with average gets you. And if you don’t believe me now, then you’ll likely believe me later…after it’s too late.

How to Get Off the Average Road

Something has to move you in this life. By that I mean something has to change either externally or internally to get you doing something different.

average debt load in americaI experienced this twice in my life.

  • The first was when the student loans came due and I realized I couldn’t make the monthly payment.
  • And second, when I got divorced and owed my wife half of our estate.

You don’t want to wait around until some catastrophic event moves you like I did.

Realize that you’re in a bad spot. You’re in debt and you shouldn’t be. Life would be so much better if that credit card, those student loans, those car payments weren’t weighing you down.

Hopefully this simple post hits you hard enough to take action. I hope that being average scares the crap out of you.

If you’ve been thinking about tackling your debt and becoming better than average, then I would highly recommend Dave Ramsey’s book, “The Total Money Makeover“. Dave will teach you why to get out of debt, and then how to get out of debt. It’s so powerful a read that many people don’t put it down until they reach the back cover.

It could change your life forever, and I certainly hope it does. Best of luck to you all.

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8 comments to The Average Debt Load in America is $100,000 – How Do You Compare?

  • Ours is higher than that because of our mortgage. I guess if you broke it down between my wife and I, we’d fall under the $100k threshold, though.
    Money Beagle recently posted..Giving Up Facebook

  • Kathy

    We have zero debt unless you count MasterCard or Visa which is paid off ever month. No mortgage. No car loans. No student debt for us or our son. Life is good.

  • I have $260k on my mortgage. I have an offer on another house right now for $160k for me to move into. I will rent out the other place.

    At that point, I’d be about $400k in debt, though ideally, $260k of that will be covered via rent.

    Does the study above count business loans?
    Erik recently posted..Increase Your Credit Score: 9 Tips for Credit Success

    • That’s more risk than I’d be willing to take Erik. What if your renters tear the house apart? What if you lose your job? There are just so many scenarios where this scenario can go wrong (and has gone wrong for many). Have you ever considered just selling your current house and taking the equity into your new downsized house? Then, quickly pay that off and save up for a rental.

      That’s the route Liz and I took. It’s slow at first, but saving up for the second rental happened much faster – and then saving for the third, fourth, fifth, etc. will happen roughly once per year. It’s simple, but definitely effective, and at much less risk than taking on hundreds of thousands in debt.

      See my Rental Property Wealth Calculator

  • Now that we are working toward debt freedom, I see the signs so clearly in others, the signs we ourselves once lived by: “We can afford the payments just fine,”, or “Everyone has debt,” or, “It’s unreasonable to save up and pay cash for a…..”. Every time I hear those statements I get a sick feeling in the pit of my stomach, and I also am so relieved we are off of the “average” path.
    Laurie @thefrugalfarmer recently posted..Financial Literacy Roundup: Week #3

    • Same here! But, it becomes so difficult to just watch people make a mess of their finances. There’s a fine line between sticking your nose where it doesn’t belong and helping out a friend.

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