When you write about debt all day, the glass is never half full. It’s usually empty. Because it’s been knocked on its side. And it’s shattered. Glass shards are everywhere.
My boss here at Debt.com has predicted another recession sometime during the Trump era. Seeing as how Howard Dvorkin has made money in real estate, publishing, and investing — and I haven’t — I tend to believe him. And my daily research usually backs him up. From just this week…
Debt.com reports that millennials aren’t saving enough for retirement. That’s no surprise, really. Most Americans aren’t. But the reason is sooo millennial: “Millennials are choosing to save for short-term goals more than long-term ones. … Millennials are more likely to spend money on travel (81 percent), dining (65 percent), and fitness (55 percent).”
CNN reports, “Nearly half of Americans say their expenses are equal to or greater than their income.” For those 18 to 25, it’s more than half. It’s 54 percent. So basically, it’s bad now and will only get worse as everyone ages.
Creditcards.com reports the annual percentage rate for new credit cards is at “an all-time high of 16 percent.” The website has a nifty system for figuring this out: It studies the 100 most popular credit cards and issues a weekly average. Been doing it for years. Right now is the worst ever.
…and the week is only half over.
Stupid or structural?
It’s easy to blame people for spending too much, saving too little, and generally being stupid about money. And that’s certainly a big part of this country’s problem.
For example, this is also from yesterday: A real estate brokerage firm called Redfin reported that a third of all Americans who bought a home in the past year “made an offer without first seeing the home in person.” Because nothing screams “financial responsibility!” like making the biggest purchase of your life without actually touching it. Especially when the purpose of a home is to, you know, spend a lot of time there.
By the way, that number jumps to 41 percent for millennials. Maybe they think they can return a house like they can return sneakers on Amazon.
Still, stupid can’t account for all the debt-ridden accounts out there. That CNN story from Tuesday quotes Jennifer Tescher, president and CEO of the Center for Financial Services Innovation. The CFSI is a nonprofit that focuses on the “unbanked” and “underbanked,” which is the short way of saying they don’t even have enough money to use a bank.
(This always reminds me of Louis CK ranting about his bank’s overdraft fees: “They charged me $15. That’s how much it costs to have only $20. Now I only have $5.” But I digress.)
Tescher told CNN she believes Americans are suffering from structural debt.
“People are spending a shockingly large amount of income on housing. They have to pay for transportation to get to a job. These costs are going up while their wages stay the same,” she told CNN. “We have a series of structural challenges in this country that require policy solutions.”
Policy solutions? Out of this Congress and White House and these political parties? Now we’re back to “stupid.”
Article last modified on August 8, 2017. Published by Debt.com, LLC .