The average amount of personal debt in the United States has been steadily higher than the average amount of savings per person for a number of years. Although the total amount of personal debt has been steadily falling in recent years, large amounts of debt continue to hinder the financial freedom of individuals.
According the the U.S. Debt Clock, on March 16, 2011, the total amount of debt in the U.S. was over $55 trillion, but this amount steadily grew each second. The total amount of U.S. debt per citizen was $177,718, which equates to $676,039 per family. However, this measure of debt also includes the debt owed by governments and companies, which is divided among the population of the United States.
Average Personal Debts
In terms of personal debt, which includes the outstanding balances on mortgage, credit card and car loans, student debt, the total amount of debt in the United States was roughly $16 trillion on March 16, 2011, according to the U.S. Debt Clock. The number was gradually falling by the second. Total mortgage debt amounted to over $13 trillion. Consumer debt, which includes anything except mortgages and federal student loans, was $2.4 trillion and steadily rising by the second. Credit card debt made up part of this figure, but was steadily falling from a figure of nearly $785 billion. The average amount of personal debt per person was $51,960. The amount of savings per family was small in comparison, equating to only $7,099.
Trends in Debt
According to the Los Angeles Times, the average amount of personal debt has been falling. By August 2010, the average amount of personal debt had fallen by 6.5 percent from its peak in 2008. Most of this decrease has been put down to the fall in credit card balances. Although much of the reduction in credit card debt has been due to voluntary reasons, a lot of the reduction has been due to credit card companies lowering the limits per card.
There are several methods available for reducing your personal debt. The traditional way is to develop a strict budget. Separate your "fixed" payments from your "variable" payments. Fixed payments may include items such as food, gas, mortgage payments, car payments and credit card payments. Variable payments include luxuries like vacations, restaurants, movie tickets and so on. Prioritizing your fixed payments will often lead to reducing your debts.