Americans Now Have Less Debt and More Savings than in 2008

15
Feb

Americans Now Have Less Debt and More Savings than in 2008

A new report from the Federal Reserve Bank of New York shows Americans now have less debt than in previous years and are taking steps toward adding to their savings. According to the report, Americans now have less mortgage, auto loan and credit card debt than in 2008 when consumer debt peaked. Even better is that they’ve saved a significant amount since the crisis.

Eliminating Debt and Saving More a Consumer Priority

The report revealed that Americans have 7 percent less mortgage debt, 12 percent less auto loan debt and 15 percent less credit card debt than they did in the summer of 2008. Also, loan payments were at the lowest level in a decade.

Americans have been working hard to ensure they don’t crash and burn as they did after the financial crisis when everyone saw the repercussions of borrowing and spending more than they could afford.

Now, consumers are making an effort to pay back who they owe and place money in their savings accounts before buying new items. In fact, the Consumer Department found Americans are saving at nearly triple the rate they did between 2007 and 2009, having placed 5.3 percent of their money in their savings in December.

How to Stay on the Savings and Debt Relief Track

After years of overspending and failing to save, it seems Americans have been shocked into getting it right. If you want to stay on the savings and debt relief track, here are some ways to get this done:

Create your budget: First, create a budget that will help you organize the money you have coming in and going out.
Open a savings account: If you don’t already have one, it’s good to open a high-interest savings account that will allow your money to grow as it sits in the bank.
Consider waiting over borrowing: If there’s something you want to buy, instead of purchasing it on your credit card or taking out a short-term loan, consider waiting until you save enough of your own money to purchase it. This way, you don’t have to waste money on the interest you’ll owe as you repay.
Pay debts before buying new items: Also, consider paying debts before buying new items in cash or taking on new debts. If you need help eliminating bad debt and creating a good credit utilization ratio, employ the help of debt settlement or credit counseling.

Eliminating debt and avoiding unnecessary spending could help add more to your savings accounts. So consider the options above to help keep you on the track to financial freedom.

Real Estate Reports