The recovery, if you can call it one, has been funded by credit.
I have added $10,000 in credit card debt, since 2007. Not hard to do, just spend $105 more per month than your income covers while servicing high interest debt with only 10 percent of your monthly income.
Now tired of paying interest, I have started to pay down the debt. I am now spending 40% of my monthly income paying down debt. The interest charges are dropping by $10 per month or more. I know many family and friends that are taking any savings at the pump and paying down debt.
I do believe as more people get jobs, they take on more debt, because they feel for now, they can handle the low monthly payments required and do not factor the interest cost month to month. They want the new big screen TV for $1,000 and a $40 per month payment is no big deal. Not realizing by the time they get it paid off it will have cost them $360 in interest payments over 3 years. Also, as the balance comes down if they pay less than $40 per month it will cost them much more in interest.
With savings accounts earning less than 1% many feel it is not worth trying to save. People want things now, and are not going to save for 2 years to buy a TV for cash.
The recovery, if you can call it one, has been funded by credit.
I have added $10,000 in credit card debt, since 2007. Not hard to do, just spend $105 more per month than your income covers while servicing high interest debt with only 10 percent of your monthly income.
Now tired of paying interest, I have started to pay down the debt. I am now spending 40% of my monthly income paying down debt. The interest charges are dropping by $10 per month or more. I know many family and friends that are taking any savings at the pump and paying down debt.
I do believe as more people get jobs, they take on more debt, because they feel for now, they can handle the low monthly payments required and do not factor the interest cost month to month. They want the new big screen TV for $1,000 and a $40 per month payment is no big deal. Not realizing by the time they get it paid off it will have cost them $360 in interest payments over 3 years. Also, as the balance comes down if they pay less than $40 per month it will cost them much more in interest.
With savings accounts earning less than 1% many feel it is not worth trying to save. People want things now, and are not going to save for 2 years to buy a TV for cash.