The average American household has more than $132,000 in debt. This does not include a mortgage. When factoring in a mortgage, that total jumps to almost $173,000. As a whole, Americans owe more than $1.2 trillion in educational debt, with the average student loan at just under $29,000. The average car loan in America has just hit more than $30,000, with monthly payments of over $500. And they carry an average credit card balance of more than $15,000, with more than 1.4 billion open credit cards in the United States.
Add to these statistics that fact that 57% of households don’t actually have a budget and only 30% have a long-term financial plan. 50% of Americans have less than one month of their income saved for emergencies and 20% don’t save at all. 2/3 of Americans would struggle to come up wtih $1,000 in an emergency. Ten million of American households don’t have a bank account. 56% of snake people don’t have any money saved for retirement and only 24% show even a basic understanding of finances.
It’s no wonder why most Americans have trouble picturing the “American Dream” for themselves. Faced with this type of debt, it’s hard to even begin to plan on how to improve the situation.
Our Financial Capabilities Program starts by looking at an individual or family’s montly income, expenses and long-term debts to set a baseline of where they are today. An overview of their credit report is also an important step to see how they have been managing so far. We then try to make suggestions on areas where expenses could be cut. There may also be state and federal programs available to help relieve the burden of some of these expenses. In addition, are there other ways they might consider to increase their overall income?
The Credit Counselor then make suggestions, taking “baby steps” to start moving them in the right direction. We try to meet with our program participants on an continuing basis to help them continue to make positive changes in their lives, while giving them a support system. In addition, we try to find ways to improve their overall credit history.
It is an ongoing process and there generally is no quick fix. But with the right assistance and support, many people can start to see that light at the end of the tunnel. Then their dreams don’t seem so difficult to achieve.
– Lisa Christensen, Budget Counselor/Financal Coach at Newcap, Inc.