Even with economic uncertainty, debt is relatively steady year-over-year. 

Many Americans have made significant inroads in paying off personal debt in the last four years, but at $21,800 not including mortgages, the average debt level is getting in the way of other opportunities such as investing, a survey by Northwestern Mutual found. While the overall average is $8,000 less than it was in 2019 and down $554 from last year, 35% of Americans said they’re either carrying or close to carrying the highest level of debt they’ve ever had, the survey said. At the same time, 43% said their debt is now close to or at the lowest level it’s ever been. At a time of high inflation and economic uncertainty, it's encouraging to see personal debt levels have held relatively steady year-over-year, and even ticked down a little," wrote Christian Mitchell, chief customer officer at Northwestern Mutual, in the 2023 Planning & Progress Study. "That said, it can be a slippery slope between manageable debt and runaway debt, so it's an important time to remain extra vigilant about planning and spending."

Milwaukee-based Northwestern Mutual’s survey included 2,740 online interviews of U.S. adults earlier in 2023. Not surprisingly, the survey found the primary source of personal debt was credit cards, accounting for 28% of it. Car loans, at 12%, were the next most common source, followed by medical debt at 7%, home equity loans at 6%, personal education loans at 5% and educational expenses for children or family members at 3%. And the toll of this debt in 2023 is high. Americans with personal debt on average indicated that 30% of their monthly income goes to paying it off, and 61% of debtors said paying it off is a higher priority than any savings. Thirty-nine percent said they’re putting savings first.

Source: Financial Advisor