A new study from Northwestern Mutual has found that many Americans are sinking in debt, and don’t expect to climb out of it any time soon; the study found that more than one in 10 Americans say they will be in debt for the rest of their lives. The reality, however, may be bleaker.
For its 2018 Planning and Progress Study, Northwestern Mutual surveyed 2,003 U.S. adults, revealing just how far deep in debt Americans are. Northwestern Mutual found that 13 percent say they will be in debt the rest of their lives.
But looking at a 2017 study from Experian and Credit.com, 73 percent of consumers had outstanding debt when they were reported deceased. Though there was no information on how long they carried the debt, those who died with debt had an average total balance of $61,554, including mortgage debt; without home loans, the report states there was an average balance of $12,875. Of those 73 percent who died with debt, 68 percent had credit card balances, 37 percent had mortgage debt and 25 percent had auto loans. Twelve percent died with personal loans and 6 percent with student loans.
Credit.com’s study used data based on Experian’s FileOne database, which consists of 220 million consumers. Experian looked at consumers who, as of October 2016, were not deceased, but then showed as deceased December 2016. There was no information on how long the debt was carried.
In contrast, Northwestern Mutual’s survey found that 43 percent of Americans expect to be in debt for just one to five more years, 19 percent six to 10 years and 15 percent 11 to 20 years.
American’s optimism about paying off their debt sooner rather than later may be easier said then done, but debt repayment strategies can help.
Popular strategies for paying off debt as quickly as possible include the avalanche method, in which you pay down the debts with the highest interest rates first. The snowball method is another effective way to pay down debt fast, especially if you struggle with motivation; it prioritizes your smallest debt first (regardless of interest rate), so that you’ll gain momentum as you wipe out more and more debt.
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