Individual and Household Debt Survey of The US

In 2011, UK guarantor loans provider, Guarantor Loans Company run a survey exclusively for How to Manage Money Tips about individual and household debt in the USA. Although the company’s main outlet is offering guarantor loans throughout the UK, they also run a Money Saving Blog and release regular survey results and insights across a range of credit markets.

As How to Manage Money Tips is a US based site, it seemed appropriate to run the survey for American consumers. We hope you find, as we did, that the results are quite intriguing. The characteristics of our respondents were as follows:

Gender
Male: 39%
Female: 61%

Education Level
High School Graduate: 4%
Some College, No Degree: 10%
Graduate Degree: 19%
Bachelor’s Degree: 57%
Associates Degree: 10%

Income Level
Less than $12,500: 5%
$12,500 – $24,999: 5%
$25,000 – $49,999: 29%
$50,000 – $74,999: 29%
$75,000+: 32%

It’s worth noting that our survey yielded no significant differences between education level and income level.

The Main Results of the Individual and Household Survey

We aimed at getting respondents from across various states who would be able to provide a good cross section of society in general and posed numerous questions about debt and money management.

Our results showed that the average amount which people believed the credit card debt per household in the US to be was $7547, in fact the actual figure is $15,799^, so a little off but most people had a reasonable grasp of unsecured debt levels. Most respondents said that they had less household debt than they thought the average was; given that most people tend to underestimate the debt they have, this was anticipated.

9% said they were going to apply or considering applying for new credit in the next year. With 91% saying they would not; this enforces the position in the current economy where individuals are trying to reduce their debts at a time when economic growth is low.

We asked our respondents what they thought the best way to deal with debt is. The answers they gave with percentages are below:-

Ignore It: 5%
Save Money and pay off Debts: 81%
Consolidation to More Affordable Credit: 10%
Other: 4%

We’re not entirely sure that ‘Ignore It’ is a great option going forward, but that it’s good to see that most people chose the sensible option of saving money and paying down their debt.

A money hanging by the dollar:  Individual and Household Debt survey.

We also asked respondents for their own piece of advice on how to better manage your money. Here’s the top answers we received.

  1. Don’t spend more than you earn
  2. Save a set amount each month
  3. Use credit cards but pay them off each month. Use all the points you can earn
  4. Always look to save money in every situation
  5. Save, save, save!
  6. Use cash, spend less
  7. It’s never easy to work your way out of debt, it takes a lot of demanding work and patience. Remember to think about that before you spend your money.
  8. Ignore the idea of credit. Debt is not wealth. Invest in commodities and hard assets, not savings!
  9. Save enough money for emergencies
  10. With each paycheck you receive. Pay yourself first by putting 10% into a savings account.

There are some fantastic pieces of advice there. Each one has its own merits, but the overriding advice people gave was to not spend more money than you earn; quite a simple piece of advice, but not always easy to put into practice in today’s economy!

The last two questions we asked (as we were intrigued more than anything) was what colors they would each associate with debt and credit. We assumed the majority would favor Red for debt and Black for credit (which was correct) however, there were also some rather strange answers given.

Debt
Red: 90%
Yellow: 2%
Black: 8%

Credit
Green: 33%
Black: 19%
Blue: 14%
Brown: 4%
Orange: 4%
Red: 8%
White: 4%
Yellow: 8%

We’re not entirely sure why some of these colors make it here. The bank statements of those individuals use different color-coding methods from convention?! Who knows… but it’s clear that debt’s color is red whilst the color of credit is a little ambiguous. This may have been the way the question was asked – many people may have thought of credit as the same as debt, we meant it for meaning ‘being in credit’… oops.

We hope you’ve found these results interesting reading. If you’re interested in more results such as these, please visit the surveys and insights section at the Guarantor Loans Company website.

Alex is the Editor for The GLC Money Saving Blog. A blog ran by Guarantor Loans Company to help enhance the financial lives of consumers. He has an avid interest in all things financial, especially alternative financial products and debt solutions.

^Total revolving US debt ($793.1b May 2011) divided by estimated number of households carrying credit card debt (50.2m)
GLC Survey results collected 8th December 2011 – 9th December 2011 from GLC web survey panel of 75 respondents.