Poll: How Deeply In Debt Are You?

[phoenix2020]

We have a couple of mortgages (bought a home for a sibling and her children, and later another for my parents) but both are manageable. All expenses go on credit cards but are paid off immediately because we frequently use points to travel. When I was younger I was adverse to debt and preferred to pay cash for everything, however as I've matured financially I have grown to appreciate the value of a healthy credit history, so although we are fortunate to be able to pay off debts on demand if required, I prefer having built up (and continuing to build) a solid payment history. I've found that having great credit history opens a lot of doors, so I am comfortable taking loans so long as it is always within my means to pay them off immediately--something I wish I had learned earlier in my life so that I could have gotten started earlier.

 

[Ishm]

Bit of an error in that poll. Every American owes around $100k in federal debt. Then add your personal debt.

 

[Bezukhov]

People owe me money. They better pay up, or Big Louie and a couple of his boys are going to chat with their kneecaps

 

[notquiteright]

Debt free years before I retired.
Even with today's inflation don't spend what my retirement brings in each month.

Ya livin' the dream brah....

 

[Eriech]

That appears to be what many have done. If they have a positive net worth then they are counting that as having no debt despite having mortgage and/or other debt.

The OP said:



and made no mention of net worth.

All my debt is on appreciating assets. My real estate will never be free and clear because property taxes are due and payable and subject to forfeiture for non-payment. Interestingly, to me anyway, if I declare bankruptcy there's a good chance my mortgage holder will be SOL but the municipality will get theirs irregardless of my need for a place to live.

Cash is losing double digets currently. Debt or cash we are hosed.

 

[ALiberalModerate]

We owe around 140k on our home, but it's net worth is around 300k. We have a financed vehicle as well. Our current savings/investments well exceed our total debts. We put everything on our miles cards, and pay them off every pay period.

 

[Renae]

Two cars...

 

[Mina]

Just curious. How deeply are you in debt right now? Please include all liabilities: from mortgages, business, and car payments, personal loans, etc.

Me personally: I have zero debt. My properties, car, etc. have all been bought with cash.

What about you?

Funny you should ask, since I literally just paid off my home today. So, I've got no debt other than my credit cards, which I pay off in full every month, but which can rise pretty high during the month (I run everything through them, including lots of reimbursable spending for work). I'll tend to have about $10k in debt at any given moment, but nothing I pay interest on.

Generally speaking, debt is pretty low for people right now, on average. When you look at the share of disposable income going to household debt, it's just 9.34%, right now, down from a high of 13.17% near the end of the Bush administration, and lower than at any point during the four decades leading up to the pandemic (which is as far back as the Fed tracks it).

I wonder if this is contributing to inflation: people who have a lot of debt hanging over their heads might be quicker to economize in the face of price increases (e.g., responding to higher gas prices by driving less, which reduces demand and curbs the price). With debt being a smaller consideration for most households than in generations, people would be expected to be less price sensitive: more likely to respond to a price increase not by reducing consumption, but instead just by griping about it, and thus prices will tend to rise more:

Household Debt Service Payments as a Percent of Disposable Personal Income

Graph and download economic data for Household Debt Service Payments as a Percent of Disposable Personal Income (TDSP) from Q1 1980 to Q1 2025 about disposable, payments, personal income, debt, percent, households, personal, income, services, and USA.

fred.stlouisfed.org

 

[Mina]

I know I gave the same answer, but I don’t think that this is really being in debt. If you have the money and the intention to pay it off at the end of the billing cycle, I don’t think it qualifies as debt. Much like you are not in debt when you order food at a diner but haven’t yet gotten the check.

I’m more kind of just floating the idea, because I gave this very answer that you did but on second thought I wonder if it’s really to be counted as a debt.

Credit cards are an awesome deal if you are disciplined enough to pay them in full at the end of every cycle.

(1) You get the "float" -- the gap between when you spend the money and when you actually have to pay for it can be anywhere between one and two months (depending on when in the cycle you spend), which functions like a free loan.
(2) You often get various cardholder benefits, like extended warranties on what you buy.
(3) You have more options if you buy something and have an issue with it (you can stop the payment and let them fight the card company).
(4) You often will get points, which is basically free money.
(5) You're less at risk than when walking around with cash, since you're only out-of-pocket for the first $50 lost.
(6) You get an automatic record of where you buy things, which can be helpful for future budgeting/reimbursements.

 

[HangLow]

Credit cards are an awesome deal if you are disciplined enough to pay them in full at the end of every cycle.

(1) You get the "float" -- the gap between when you spend the money and when you actually have to pay for it can be anywhere between one and two months (depending on when in the cycle you spend), which functions like a free loan.
(2) You often get various cardholder benefits, like extended warranties on what you buy.
(3) You have more options if you buy something and have an issue with it (you can stop the payment and let them fight the card company).
(4) You often will get points, which is basically free money.
(5) You're less at risk than when walking around with cash, since you're only out-of-pocket for the first $50 lost.
(6) You get an automatic record of where you buy things, which can be helpful for future budgeting/reimbursements.

you are wise M'Lady...

 

[Real Korimyr #9]

Less than five grand. Had to max out one of my credit cards to pay for my wheelchair-- medicaid wouldn't help with one that could leave the house-- and I'm just kinda bad with money. At least I'm not as irresponsible as my parents, who'd just take out card after card after card.