Even though we are told the economy is doing great, all the evidence shows that main street Americans are struggling more and more every day. A recent report claimed that the costs of goods have risen to the point that 25% must use debt to pay for necessities, such as food.
According to a new Experian report that came out last week, Americans have an average of $6,506 in credit card debt. But some expenses are weighing much more heavily on the credit cards of the average American…
Necessities, like food and rent, are being put on credit cards. A full 23% of Americans say that paying for basic necessities such as rent, utilities, and food contributes the most to their credit card debt, according to a new survey of approximately 2,200 U.S. adults that CNBC Make It performed in conjunction with Morning Consult. Another 12% say medical bills are the biggest portion of their debt. Medical bills additionally likely contribute to the purchases of food on a credit card.
This news isn’t shocking unless you believe the mainstream media’s glorification of the false “recovery” we’ve experienced since the Great Recession of a decade ago. American households have taken on historic levels of debt, which will crush them in the next economic downturn.
Everyday expenses continue to rise, and as the shadow inflation increases, it also threatens to wipe out the middle class – what’s left of it anyway. In fact, middle-class life is now 30% more expensive than it was 20 years ago, according to a separate report by CNBC. The cost of things such as college, housing, and child care has risen precipitously: Tuition at public universities doubled between 1996 and 2016 and housing prices in popular cities have quadrupled, Alissa Quart, author and executive director of the Economic Hardship Reporting Project, tells CNBC Make It.
Alissa Quart, the executive editor of the Economic Hardship Reporting Project, examines the lives of many middle-class Americans who can now barely afford to raise children. Through gripping firsthand storytelling, Quart shows how our country has failed its families. Her subjects—from professors to lawyers to caregivers to nurses—have been wrung out by a system that doesn’t support them, and enriches only a tiny elite. – Squeezed: Why Our Families Can’t Afford America
It has become common to rely on debt, live above one’s means, and spend more than is made. The Federal Reserve’s money printing policy isn’t helping either, as its goal is to enrich themselves and the political elite that continues to allow the top few to impoverish the rest of America. Central banks have become the evil fire which government officials fan the flames of.
But, there has been a bit of a lack of personal responsibility running through most of the country as well. Americans spend an average of $483 a month on non-essentials such as dining out, entertainment, luxury items, and vacations, Schwab’s 2019 Modern Wealth report found. Debt reduction is a key to preparing for the next recession: which will happen, the only question is “when?”
There are several ways to reduce your debt, but it will likely require cutting spending on unnecessary things and saying no to expensive dinners in restaurants. Debt reduction is a gargantuan task, but it can be done.
In fact, credit card companies have been given more leeway in order to collect debts recently. Future Money Trends‘ James Davis suggests you avoid this by simply avoiding debt.
This is an unfortunate change to the rules, however, experiencing a call from a debt collector can be avoided by avoiding debt in the first place. When you borrow someone else’s money and do not repay it as you originally stated in the contract, you will be bothered and harassed. People are going to want their money back, and debt collectors honestly don’t care much whether you have it.
Avoiding debt also allows one to invest their own money and live a more financially free lifestyle – with zero chance they will be harassed by a debt collector who wants their money back. A debt is a liability and only by having as few liabilities as possible will one see their net worth rise and their personal wealth increase. – James Davis, Future Money Trends