The majority of Americans are worried they can’t pay off their debts. But in Delaware and Washington, D.C., people are most worried about how to afford their lifestyles.
DC residents need to make $80,000 to live comfortably, due to facing the second-highest cost of living in the nation. But two-thirds of the country is more concerned with paying off debt like credit cards, according to a new study from personal finance site GOBankingRates.
“Our survey results reiterate the impact the current debt crisis is having on Americans, really, no matter where in the country they are living,” says Kristen Bonner, lead researcher on the study for GOBankingRates. “Americans are suffering from paying off their past expenses rather than looking forward and focusing on setting up their financial future.”
Aside from DC and Delaware, there are a few other states with unusual big worries. Both Idaho and Hawaii put “paying for education” as their top cause of financial stress. According to CollegeBoard, the U.S. average for in-state tuition and fees at a public four-year institution is just about $9,400. Last year, Idaho was ranked 8th-cheapest in the country with $6,820 a year, although Hawaii was above average with $10,170.
The two states have drastically different incomes. The Kaiser Family Foundation says that in Idaho, the median household income in 2014 was $53,438 while Hawaii was $71,223 — an almost $18,000 difference, although costs of living in Hawaii are much higher.
But even Alabama and Maryland which have the lowest and highest median incomes respectively, both chose “paying off my debt” as the No. 1 cause of financial stress. Maryland residents face the fifth-highest credit card debt in the nation ($6,448), according to the GoBankingRates survey.
Eight states listed “not having enough money to fund an emergency” as their top money stress: Arkansas, Arizona, Connecticut, Missouri, Oklahoma, South Dakota, Wisconsin, and New Hampshire (where it tied with “paying off my debt”).
Retirement was also the top financial problem, or tied for it, in five states: Delaware, Iowa, Maine, Massachusetts, and Vermont.
What should you do about your debt?
Whether it’s credit cards or student loans, most everyone is facing the burden of debt. As most Americans can’t make ends meet with minimum wage, it’s hard enough to pay what is owed, let alone start saving for the future.
Paying for an education long after graduation means young people are working more than ever because of financial anxiety. Even if millennials are doing a job they love, a lower income means they have to work even more.
If you’re deep in debt, you need to take a few steps to work your way out. Start with going over your finances to see what exactly you need to pay off and when. Once you’ve evaluated your damage, check on your assets. Could you downsize your home to save money or sell your car to make some extra cash? Even selling a few collectibles could be worth it.
Don’t forget to consistently go over your credit report and score to make sure they are in good shape. It’s OK to get credit counseling to go over a personal plan made just for you.
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