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Debt

November 2011 Financial Security Index » Debt

Q:

How do you feel about the amount of debt you have compared to 12 months ago?

One-third of those earning between $50,000 and $75,000 are more comfortable with debt versus last year, compared to about 15 percent of those earning less.
Twenty percent of college grads are less comfortable with their debt compared to 30 percent of those with a high school education or less.
Two-thirds of retirees feel the same about debt as they did last year, with the balance split evenly among those who are more and those who are less comfortable.
Kelly Campbell

"The more debt you are in, the more volatile your situation."

The people who say they are more comfortable with their debt now were probably positioning themselves to be more comfortable now, years ago. They were probably in pretty good shape in the first place and have done some debt reduction. They may have taken advantage of low interest rates and maybe even refinanced. The bottom line is that volatility is here to stay, and the focus needs to be on decreasing your volatility and increasing your confidence. Your personal volatility is being able to pay your bills and being comfortable doing so. The more debt you are in, the more volatile your situation. Your confidence can increase in this environment by thinking about things that can hurt you in the future. Debt will hurt you in the future if you have any kind of employment or stock market issue.

- Kelly Campbell, CFP, founder and principal of Campbell Wealth Management in Alexandria, Va.

« Back to the Financial Security Index poll.

 

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