Are Americans winning the financial struggle?
The economic battle continues to drag on. Americans were knocked down, but not out after the housing bubble burst in 2008 and the Great Recession lumbered ahead. Getting back to their feet has been a struggle, but slowly their finances are getting back in shape. Now they are smacking down their debt, while trimming bankruptcies and foreclosures. Americans everywhere are gaining strength in their personal finances while pumping up personal income.
Revolving Credit Down, Bankruptcies Up
While the amount of personal debt being carried by American’s is declining, in many regions throughout the country, bankruptcies are up. People may be spending less on credit cards simply because they have no credit available to them. Therefore some of these same people are driven into bankruptcy because they have no other options.
Personal Finances Are Getting In Shape
From college students paying their credit card bills on time, to a drastic drop in credit card interest rates, it certainly appears that things are changing. All across the country, people are making an effort to spend less, reduce debt and save for the inevitable rainy day.
American’s debt is largely made up of the home. Mortgage debt represents almost $9 of every $11.38 spend on debt. It is no wonder that foreclosures continue to rise while other debts fall. Yet as unpleasant as they are, a foreclosure may be exactly what is needed in order to start over financially.
Income vs. Inflation
A key reason that foreclosures are up revolve around the fact that incomes are up as well. That means while foreclosures are not pleasant, the end result is the debtor being in a better financial position to rebuild his or her debt. While the increase in income is good news, the relatively slow increase in inflation is even better news. Income currently outpaces inflation, leading to a greater net purchasing power for American workers.
How will America’s financial struggle end? That will remain a mystery. However, there are a lot of tools the can help you budget and plan as you fight the financial fight of your life.