Making Financial Sense of a Debt Burden

According to the latest figures, household debt is on the rise. Analysts are quick to point out that US households are borrowing more today than ever before, and the latest figures for Q3 2017 reflect that household debt is up $116 billion at $12.96 trillion, for an uptick of 0.9%. The report by the Center for Microeconomic Data confirms what many households already know: the total debt balance is rising. The cyclical movements of debt over time (since Q4 2001) indicate a low of $8.29 trillion in 2004, and a high of $12.68 trillion in Q3 2008 at the height of the global financial crisis.

Since then, the policies put in place by then president Barack Obama helped to reduce overall household debt as the economy stabilized. The largest component of US debt is housing debt, accounting for around 80% throughout. However, a notable trend has been taking place since overall debt reached a nadir in Q3 2013 – credit card debt has been increasing rapidly. Consider that in Q3 2013, non-housing debt amounted to $2.85 trillion, while housing debt amounted to $8.43 trillion. Fast-forward to Q3 2017, things look markedly different. Non-housing debt is now $3.76 trillion, and housing debt is $9.19 trillion. That amounts to a total debt burden for US households of $12.95 trillion. The percentage increase in non-housing debt is notable. From 25.57% of all debt in 2004 to 26.6% of all debt in 2017. While the percentages don’t tell the full story, the increase in total non-housing debt is substantially higher today.

What is the US National Debt Burden?

Every day, the US national debt is increasing at an alarming rate. At the time that President Trump took office, the national debt was $20 trillion. Today it stands at $20.621 trillion. That amounts to a debt per citizen of $63,044, and a debt per taxpayer of $170,352. On the other side of the equation, taxpayer revenue amounts to $3.388 trillion, with a revenue per citizen of $10,360 and a revenue per taxpayer of $28,010. Clearly there is a dramatic shortfall. US household debt is adding to this burden. There are some concerns about how current economic policies will impact the overall debt burden. Presently, the Federal Reserve Bank’s FOMC has been steadily increasing interest rates. In 2017 alone, there were 3 rate hikes amounting to 0.75%. The current interest rate is now in the region of 1.25% – 1.50%. At its last meeting on January 31, 2018, the Fed decided not to hike rates, but insists that a rate hike in March is likely.

If the Fed moves to raise interest rates in March, this will add further pressure to US households currently under tremendous debt. If we break down household debt, we can see that it fits snugly into the following categories: automobile debt up 1.9%, credit card debt up 3.1%, mortgage debt up 0.6%, and student loan debt up 1%. Contrary to popular opinion, these rising levels of debt are perceived positively by economists until they become problematic. Rising debt indicates that consumers are optimistic about the economy and feel free to spend once again. Debt fueled GDP growth is not advised, but if US households are making timely repayments on their debt, this is a positive for the economy. Anytime you experience difficulty in the repayment of debt, it’s important to seek assistance in a timely fashion. For example, credit counseling services can offer valuable insights into your personal financial situation, and provide a framework for debt repayments, the creation of a budget, and the prioritization of your spending.

Follow Sage Advice for Debt Relief

On a positive note, the unemployment rate remains low at 4.1%, and consumption expenditure comprises 70% of US GDP. It’s important that rising debt levels are balanced by rising income levels. If debt becomes unbearable, it may be time to seek credit counseling advice. There are many ways to deal with credit card debts, understand different types of debt alleviation options, and manage your credit effectively. A sound financial education is imperative to help you get out of debt, and more importantly to stay out of debt. Many terms are bandied about, but an important option to consider is debt consolidation. It requires taking a loan at a lower interest rate than the prevailing credit card debt, and then paying off all existing credit card debts at one time. The simplest advice is always the best advice: cut your expenses, pay off your high interest debt, live beneath your means, and seek professional help whenever necessary.

Is Your Home A Money Pit Or A Goldmine? Let’s Find Out

A home can be one of two things. Either, it can be a fantastic investment that one day rises in value and allows you to gain a massive ROI. Or, it can be a constant drain your finances. It could ultimately eat away at your bank balance every month with expensive costs piling up one on top of the other. The contrast here is why you need to be careful when you are buying a home. You need to know whether you are buying a potential goldmine or a money pit. Let’s look at a few of the factors to consider.

Money Pit: Problems With Pipes And Electric

These are two expensive problems that you should avoid when you are buying a home. Pipes cost a fortune to replace, and electric wiring means that the home needs to be ripped apart. Both issues will show up on a survey, and you should check for these issues before you commit to a purchase. If you have already bought a home with these issues, your best option might be to sell. The problem is that most home buyers won’t want a property with these issues. If you’re thinking: I need to sell my house fast, there are options. You can consider selling to a company like Sell House Fast rather than a private buyer because they will take on a home, regardless of the state it’s in and pay the market value.

Goldmine: Modern And Contemporary

You do need to work to keep your home looking modern and contemporary. If you do this, you will ensure that it gets great offers when it is time to sell. Be sure to pay attention to features that buyers love such as aesthetic materials that look expensive like marble. This can be added as flooring in any room or as a countertop in the kitchen. Focusing on the kitchen could be a great way to raise the value of your home by as much as twenty percent!

Money Pit: Bad Neighborhood

If you buy a home in a bad neighbourhood or it deteriorates while you are living there, you will be in the position where the value drops rather than rises. You’ll be lucky to break even when it comes time to sell. This is one of the reasons why you should always look up crime rates in an area where you’re buying. If the crime rates are higher than average, there’s a good chance the neighbourhood is not a great investment location. Instead, you should look to buy somewhere that the infrastructure is being built up, even if the homes are more expensive.

Goldmine: Beautiful Curb Appeal

Finally, every home buyer wants a property that looks stunning. No one wants to buy a home that looks a mess, and that’s why you should be working to build up the exterior design of your home in any way possible. There are a variety of options to consider here, and you may want to speak to a landscaper about some of the best possibilities available to you.

Mistakes, Mishaps and Mayhem: 6 Things That Could Go Wrong At Work Today

Everyone has the occasional bad day at work; as soon as you step in the door you have an overwhelming feeling of wanting to go home instantly. It can often be tricky getting back on your feet after a difficult start to the day, but you can prepare yourself in advance. None of our lives are perfect, so let’s address what could go wrong and learn how to avoid it.

1. An Accident

You step into the work kitchen to make yourself a morning coffee and you slip on the overly polished floor. What a terrible start to the day this is turning out to be. Like this one, not all accidents at work will end drastically, but if you have been involved in something serious you will need a reputable injury lawyer. Make sure you know your rights when it comes to claiming compensation and don’t be afraid of standing up for yourself if you have been put in an unsafe environment.

2. Overworking

Working until midnight to meet a tight deadline might seem like a noble and dedicated thing to do, but you might be being overworked without realizing. Your boss might subtly demand for tasks to be done and you go above and beyond to complete them. Make sure you’re getting adequate breaks and rests in between your working days and don’t be afraid to prioritize your jobs for the day.

3. Stress

If a certain task is getting the best of you it is important to speak out. Getting stressed at work is  becoming an increasing problem so don’t allow yourself to be swallowed into this hole. Speak to your manager about why you are stressed and they will be able to put relevant measures in place to help alleviate your anxiety.

4. Disagreements

You’re not always going to get along with everybody in your workplace. There will always be one irritating person who gets on your nerves in one way or the other. Learn to shrug off their sarcastic tone or annoying remarks, the chances are that you’re not the only one who is bothered by them.

5. Restructures

Your company might be undergoing a reshuffle which involves you moving to a different department. Most people would find this to be an annoying problem to face at work, but try to see it as an opportunity to branch out and work with new people. You never know where a restructure might take you.

6. Pay Cuts

Taking a pay cut is not only a devastating blow to your bank account, but it does nothing for your self-esteem either. Make sure your employer supplies you with a legitimate reason for a decrease in your pay cheque; hitches like this are often a sign to move on to a company which respects you more as a worker.

Wave goodbye to those nightmare days at work and stroll into work with a positive spring in your step each and every day. When you are faced with a tricky situation deal with it in the most professional and rational way possible. Don’t let a minor hitch ruin your entire day and consider these obstacles as a motivating challenge to overcome.