A recent national survey conducted by Beyond Finance, a prominent debt resolution organization, sheds light on Americans’ attitudes toward debt and their aspirations for a debt-free life. The survey, which involved 2,000 adults, unveils the average American’s perception of their ability to remain debt-free and the factors that may lead them back into debt. Additionally, the survey explores the sacrifices individuals are willing to make to achieve freedom from debt.
According to the survey findings, only 38% of respondents expressed “very confident” belief in their ability to stay out of debt. The remaining 62% cited various reasons why they believed falling back into debt was inevitable. The most common reasons included the high cost of living, unexpected expenses, concerns over rising interest rates, and the pressure to keep up with societal expectations.
Sacrifices for Debt Freedom: Despite acknowledging the challenges of staying debt-free, many Americans expressed a willingness to make sacrifices to achieve financial independence. The survey revealed that:
- 32% of respondents would give up social media for a year.
- 31% would spend a night on a remote, deserted island.
- 29% would endure a month without internet access.
- 18% would consider storm chasing, 12% would swim with sharks, and 11% would participate in the running of the bulls in Pamplona, Spain if it meant being free from debt, bills, and collection calls.
The Impact on Life Decisions:
The survey highlighted the significant impact of debt on various life decisions. Among those polled, credit card debt was the most common type of debt, followed by mortgages, automotive loans, and medical debt. The average amount of debt reported was $54,767, with the majority of it being spent on essential necessities rather than discretionary purchases.
Financial stress and negative emotions associated with debt were found to hinder individuals from making important life decisions. For example:
- 33% of respondents were unable to purchase a home.
- 30% couldn’t afford to buy or lease a new car.
- 24% lacked funds to establish their children’s savings accounts.
However, when imagining a debt-free scenario, respondents indicated different decisions they would make:
- 32% would prioritize adding money to their emergency fund.
- 27% would buy their dream home.
- 24% would focus on building their children’s savings accounts.
- Other aspirations included pursuing a different career, starting a business, and helping parents with their debts.
The Perception of Good and Bad Debt:
The survey delved into respondents’ perceptions of debt as either beneficial or detrimental. While 48% of those surveyed considered certain debts as worth acquiring, such as mortgages, car loans, home improvements, medical bills, small business loans, and undergraduate tuition, the other 52% expressed negative sentiments towards debt. Reasons for viewing debt negatively included high-interest rates, the inability to pay off debt, and the burden of increasing debt.
Seeking Solutions: The survey also revealed that 31% of respondents still rely on their parents for financial assistance, and only 41% believed they would be able to eliminate their debt after several years of payments. To overcome these challenges, Dr. Erika Rasure, Chair of the Financial Therapy Clinical Institute Research Board, recommended considering a personalized debt resolution program. Such programs can provide tailored solutions and help individuals track their progress, offering motivation to achieve debt-free status.
The Beyond Finance survey sheds light on Americans’ perspectives on debt freedom and the challenges they face in maintaining a debt-free lifestyle. It highlights the sacrifices individuals are willing to make and the significant impact of debt on important life decisions. By understanding the emotional and financial toll of debt, individuals can seek appropriate solutions to manage their debt effectively and work towards a debt-free future.
