The debt snowball tackles the smallest debt first to build momentum, working through bigger debts next, while the debt avalanche focuses on paying down higher-interest debt first to decrease the amount you pay overall. Two popular strategies are the debt avalanche and the debt snowball. Then, you can start to prioritize what you owe. Whichever method you choose, the first step is going to be to take stock of everything you owe, how much you owe in total, and the interest rate. Holding too much debt can also lower your credit score by raising your credit utilization ratio or simply by causing you to miss a payment here and there, resulting in a delinquency on your credit report. Holding large amounts of debt, especially high-interest debt, can quickly get expensive. Here's how the average debt balance breaks down by age group. According to Statista, only 39.3% of Americans under age 35 owned homes, while 62.5% of Americans aged 35 to 44 years old owned homes in the third quarter of 2022. The average debt per person will be higher if you only count debt holders.įor example, the data shows that the average person between 18-29 years old holds $70 of HELOC debt, which is likely due to low homeownership rates within that demographic. It's worth noting that this calculation spreads the debt load over the entire age group, not just the members of that group with that type of debt. To find our averages, we divided the total debt by age with the number of people in each age group using the most recent population data from Marketing Charts, which reflects the U.S. The Federal Reserve stopped tracking average debt by age bracket in 2017, though it still tracks total debt by age. For those under age 30, the largest source of debt is mortgages. As a whole, this suggests that Americans tend to pay off debt going into retirement and tend to keep debt balances low in retirement, especially people over age 70. Scroll right to see the total amount of debt.ĭebt tends to peak somewhere around middle age. Here is the average debt by type for residents of each US state, according to Federal Reserve Board of New York data from 2022. California residents, for example, tend to have higher average mortgage balances than many other states with more affordable housing, like Texas and Ohio. While some parts of the country have higher housing prices and costs of living, it can be lower in other states. Where someone lives tends to have a big influence on the amount of debt they accumulate. Note: Total household debt in the US is $16.9 trillion. In the fourth quarter of 2018, the average total debt per person was $50,090 compared to $55,480 in 2021 and $59,580 in 2022. It's also worth noting that overall, the average debt per person has increased steadily over the past few years. Student loans are the next biggest type of debt among those listed in the data, followed closely by auto loans. Mortgage debt is most Americans' largest debt, exceeding other types by a wide margin.
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