Credello: Here's Why Americans Are More Worried About Missing a Debt Payment These Days
Dec 7, 2021
The global pandemic has been a physical, mental, and financial challenge for a lot of people. But surprisingly, the financial outlook for many Americans looks better than it did when the pandemic began. Why then are more Americans worried about missing a debt payment in the next three months?
Perception vs. Reality
The New York Fed's latest Survey of Consumer Expectations shows that, as of October 2021, Americans are apprehensive about not being able to make a minimum debt payment in the next three months. In fact, it's the most concerned they've been at any point in the last 17 months of the pandemic. The survey revealed that 18% of those surveyed making under $50,000 per year felt they may not be able to make a minimum debt payment in the next three months.
Interestingly, the group most concerned about missing a debt payment, those households bringing in less than $50,000 a year, are actually doing okay financially. Lower-income households have seen an increase in wages and received benefits from ongoing government support. So what gives?
What's Causing the Concern?
Opinions are generally formed from two sources: what you know to be true and external information you receive. The second part comes largely from what others say, including friends, co-workers, and the mainstream media. Unfortunately, the media has been abuzz lately with more messages of rising inflation, so Americans may be internalizing those messages to mean things will be worse off for them in the coming months.
The major issue with this is perception can influence reality, so people who think they'll be worse off financially could be inclined to make poor decisions since they believe economic conditions will continue to deteriorate.
What Should Americans Do?
In a time of rising consumer worry, there are a few things Americans can do to protect their financial health, including:
- Look into debt consolidation. Consumers concerned about making debt payments can look at options like using a personal loan to consolidate debt. Especially if the debt is high-interest, a personal loan could help consumers lock in a predictable monthly payment at a lower interest rate.
- Focus on what you know. Take a look at your unique financial situation. Do you have an emergency fund? Are your debts manageable? Is your income steady? If all signs point to a healthy financial picture, it might be time to turn off the TV and reflect on how okay you are.
- Determine the impacts of expiring government relief. Government relief programs like mortgage forbearance, eviction moratoriums, and advanced child tax credit payments have been helpful to many families, especially those making less than $50,000 a year, but the expiration of some programs has and will continue to strike families. While some measures may be extended into next year, others, like the child tax credit payments, could end with final payments in December. That means families who have been relying on the tax credit need to plan for a decrease in income, whether that means dialing back spending or finding ways to increase wages.
Press Release Service by Newswire.com
Original Source: Credello: Here's Why Americans Are More Worried About Missing a Debt Payment These Days
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