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Your survival depends on you doing the right things at the right time. Getting out of debt is one of my most important recommendations as US household debt climbs to a new record. Americans are in more debt now than they’ve ever been. Anneken Tappe reports for CNN Business:
American households are carrying record amounts of debt as home and auto prices surge, Covid infections continue to fall and people get out their credit cards again.
Between July and September, US household debt climbed to a new record of $15.24 trillion, the Federal Reserve Bank of New York said Tuesday.
It was an increase of 1.9%, or $286 billion, from the second quarter of the year.
“As pandemic relief efforts wind down, we are beginning to see the reversal of some of the credit card balance trends seen during the pandemic,” such as lower spending in favor of paying down debt balances, said Donghoon Lee, research officer at the New York Fed.
Now that the stimulus sugar rush has worn off, consumers are going back to their old ways of spending with their credit cards. Credit card balances rose by $17 billion, just as they had during the second quarter. But they’re still $123 bullion lower than at the end of 2019 before the pandemic hit.
Mortgages, which are the largest component of household debt, rose by $230 billion last quarter and totaled $10.67 trillion.
Auto loans and student loan balances also increased, rising by $28 billion and $14 billion, respectively.
Even though credit card debt has yet to get back to its pre-pandemic level, total debt is already $1.1 trillion higher than at the end of 2019.
Your survival prep is about more than just hoarding sardines and SPAM in the basement, though that can’t hurt. You know what keeps you up at night. It’s paying those debt payments, and the idea of continuing to pay them for the next thirty years, or more.
Action Line: You want to be a Liberty Retiree, not a debt slave retiree. Get out of debt, and focus on saving more, and preparing more. It doesn’t need to happen all at once, but you need to make a conscious effort to do so. Build a plan. If you want Happy Days, you have to make them yourself. But you don’t have to do it alone. If you need help, I would love to talk with you.
E.J. Smith - Your Survival Guy
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