Research of the Week: Will You Live to Be Debt Free?
More Americans are feeling optimistic when it comes to debt elimination.
Each week, Consolidated Credit searches for financial research that can help you deal with your debt and budget. This week…
The interesting study
CreditCards.com recently released their 3rd annual survey about financial optimism. Each year, the company completes a telephone survey of 1,000 adult consumers in the U.S. to see if they’re feeling optimistic about their chances of being completely free of debt.
The big result
Americans are fairly optimistic in 2017 about debt elimination. Only 12% of indebted consumers believe they will never pay off what they owe. That’s a distinct reduction from last year when 21% of everyone surveyed gave that same response.
The fascinating details
In spite of reports that Americans are reaching critical levels of debt, those polled by CreditCards.com seem to share a distinctly positive outlook.
- Almost one in four (24%) said they’re debt-free right now
- That number was only 22% last year
- In 2014 in was 14%
- Most people believe they will be debt free by age 53
- Most Millennials (60%) think they can achieve freedom by 30
- Gen X is less optimistic, with more saying they’ll achieve freedom after 60 or never at all
- Once they’re free of debt…
- 72% would save or invest
- Only 6% would splurge on a big ticket item
- 32% would specifically save for retirement
What you can do
One part of those results that concerns April Lewis-Parks, Director of Education for Consolidated Credit is that consumers seem to treat debt elimination and savings as a tradeoff.
“Waiting until you’re debt free to start saving is usually a good way to ensure you never end up saving anything at all,” Lewis-Parks explains. “Households often make the mistake of focusing too much on one aspect of finance instead of striking a balance. Savings can’t wait on freedom from debt.”
Creating balance is part of what Consolidated Credit’s counselors help clients to do as they work their way out of debt. When clients enroll in a debt management program, they work with the counseling team to create a balanced budget. This includes setting aside 5-10% of your household income for savings. That occurs simultaneously as those clients pay off their debt through the debt management program.
“If you’re wholly focused on debt elimination and you’re not saving anything, you essentially set yourself up for failure,” Lewis-Parks explains. “One emergency expense can put you in a hole with debt again because you don’t have savings to cover it. That’s why you need a financial strategy that balances both.”
If you’re working to eliminate debt, but you’re worried that savings is falling through the cracks, we can help. In the right circumstances, a debt management program can reduce your total monthly payments by 30 to 50 percent. That frees up more money that can be used to balance your budget and save. Call Consolidated Credit today at or complete an online application to request a free debt and budget analysis from a certified credit counselor.