What are recent trends that are adding to personal debt?

| Jan 8, 2019 | debt relief |

If you are looking to exert tighter control over your expenses, it is a good idea to watch out for the latest trends in American spending that are adding to people’s personal debts.  In its yearly analysis of household debt for the United States, Nerdwallet discovered Americans wrestled with a number of particular expenses in the year 2018. These expenses generally outpaced the median income of Americans and are something New Jersey residents should watch out for.

First off, many Americans are still facing the specter of higher medical costs. Since the year 2008, medical expenses have risen faster than the rate of median income. Unfortunately, medical expenses are not easy to control. Purchasing treatment, drugs or other forms of care is often critical to preserving health or is even needed to save one’s life. Even with health insurance, costs may not fall enough to make an appreciable difference. Some people are even stuck with thousands of dollars in debt.

It is also becoming increasingly expensive to go to restaurants or to order takeout meals. In fact, the cost of purchasing food outside of the home has risen 27 percent since the year 2008 and has raced ahead of the growth of median income. Fortunately, controlling takeout expenses is easier than handling the cost of health care, as many people can switch to lower cost avenues of buying food, like sticking to the grocery store.

Americans are also facing problems stemming from student loan forbearance. While opting for forbearance gives people a pause in paying off their student debt, it does not stop interest from accumulating. In fact, forbearance can add thousands of dollars to existing student debt. While people may appreciate not having to make payments for a period of time, over the long term forbearance may not be an affordable option.

Credit card interest is also presenting a challenge for households. Nerdwallet estimated that households possessing credit card debt will likely pay $1,141 on average in interest for this year. The magnitude of interest also depends on the type of household. If children are part of the household, then the household is more likely to have credit card debt and thus have to pay interest on it as opposed to those households without children.

Keep in mind that this article is only written to educate readers on debt relief topics. It does not provide any legal advice.