Do You Have More Debt Than the Average American?
08:40 Share

Here's a fun game. Let's see how much debt you have compared to the average American. Sounds like a blast to me. Because there's nothing more American than comparing yourself to others to judge your success. Except maybe getting disqualified from a competitive eating contest because you have a vegan hot dog sponsor. Joey Chestnut, you deserve justice. With no Joey Chestnut, there's no Nathan Hot Dog Contest. The rest is just a scam. But is comparison a good way to measure financial success?

We'll get to that later. For now, let's just enjoy seeing how you stack up compared to everybody else when it comes to popular debt products like credit cards, student loans, car loans, and mortgages. And I should warn you that comparison only ends one of two ways: you feeling mildly superior to broke people or you spiraling into an existential crisis.

Neither option's great, but whatever your fate, I'm going to be here for you with a third option that I think is much healthier. Just like and subscribe so we can get this plane in the air. Seriously, sir, ma'am, we can't taxi the runway until I virtually see you give me the universal sign of approval. Let's start with an undeniable fan favorite, credit card debt. The average credit card debt per person in the United States is...

$6,501. Now, maybe that doesn't sound so bad, but remember, that's just the balance that's carried over. And the average interest rate on these cards is high, about 22.63%. That's a big deal for the 47% of credit card holders that carried a balance from month to month at least once in a year. So let's say you hypothetically racked up $6,500 of credit card debt on a vacation to Holiday World and Splashin' Safari in Santa Claus, Indiana, and it took you a year to pay that wild ride off.

That trip would ultimately cost you $7,324 thanks to interest. That's $824 in stupid tax you paid. That's no holiday. I am never going to financially recover from this. Next up, we've got student loan debt. The total student loan debt in America today is $1.6 trillion. And not so fun fact, Americans over 70 collectively owe $30 billion of that.

Now, I know it's hard to imagine grandma doing a keg stand at a tri-delt toga party. And thank God they didn't have social media back in the 70s. She would have never gotten that job at Pan Am. Anyway, what's the average balance of each student loan borrower in America today? $38,787.

Now, most Americans accept student loans as a harmless form of good debt because it's an investment in your future and has ROI. But I'd like to play devil's advocate and point out the not good parts. A recent survey of young adults found having student loans forced them to delay major life decisions. 38% delayed saving for retirement, 33% delayed buying a home, and 14% even delayed getting married.

That's sad. You know what's even more sad? The state of auto loan debt in America. According to Experian, the average car loan held by consumers in the US has a balance of $23,792. Goodness gracious, I need some Tums. I got some heartburn coming on here. That's a lot of loan for a depreciating asset. Oh, I'm right back. What's the serving size? Two tablets. Hey Siri, can you overdose on Tums? It says you could have network connectivity problems. All right.

We're back. For some of you, ponying up for some luxury horsepower might sound worth it to you if you spend hours commuting every day or shuttling kids around town or you got some people to impress. Here's what I don't get. Why 16% of those who recently financed a new car have monthly payments over $1,000 right now. And the average payment on any new car is over $700. Whether it's $700 or $1,000, that payment can crush you. Especially when you factor in other very expensive payments like...

rent or housing. Which brings us to America's other favorite good debt, the home mortgage. There are over 84 million outstanding mortgages in our country today. And what's the average balance? $244,498. Okay, now we're playing some high stakes poker here.

and the stakes are gonna get a little bit higher considering the median home price in America was $419,000 as of May, 2024. Now, a silver lining here, of course, is that homes typically go up in value, also known as appreciation. But that home sweet little asset doesn't actually belong to you until that mortgage is paid in full. All right, so based on our debt breakdown by category, how much total debt do you think the average American adult owes?

Now I will let you use a lifeline to phone a friend, but only if your phone service provider is Tello, one of the sponsors of today's video. Look, there's nothing average about these guys because average sucks, we know that. And Tello rises above the suck bar with above average coverage and below average prices.

Plans start at just $5, which is crazy considering $5 won't even buy you half of a native deodorant stick these days. But here's my favorite part. The Unlimited Everything plan is just $25 a month. There's no contracts. There's no hidden fees that randomly pop up on your bill. So if you're done with average, go to tello.com slash george to get an extra $5 off their Unlimited Data plan for your first month of service. Or...

Just click the link in the description below. My other above average buddy, online bank Laurel Road, another sponsor of today's video. Laurel Road is out here in these streets with a high yield savings account offering 5.15% APY right now, which absolutely annihilates the average savings account rate of a measly 0.45%. And just in case that chasm in rates didn't convince you, these accounts also have no minimum balance, no monthly maintenance fees, and your deposits are FDIC insured.

So let's make 2024 the year we start earning interest instead of paying it. Go to laurelroad.com slash george or click the link in the description to get started. All right, no more stalling. Back to how much debt you think the average American owes. Quadruple digits? Low six figures? 34.73 trillion? Kidding. That's just our collective national debt, which is a very real and disturbing number. That's depressing.

But if your guess for the average individual American was $104,215 and not a dollar over, you win. Tell them what they won, Bob. You won your very own Tycho Garfield telephone. Congrats. Okay, time for a wellness check. Does that number make you feel like a regular Einstein for coming in below average? Or are you entering your existential crisis era? Maybe you're somewhere in between, like an existential Einstein. But none of that matters in light of the truth bomb I'm about to drop.

You ready? Here it is. How much debt you owe compared to other people is a totally worthless metric of financial success.

Glad I got that off my chest. Thank you for sharing. Now, statistics can be fun, but a better measure of where you're at financially is your net worth. Not what anyone else's is compared to yours, but your personal scoreboard for this solo sport. And figuring out your net worth starts by adding up everything you own and subtracting everything you owe, aka your debt, your liabilities. Now, don't worry, I'll put a link to our net worth calculator in the description if you're not the mathy type. It's going to help you figure this out.

Now, your first goal when it comes to net worth is to have a positive number. That's a good start. Then, depending on your goals, you want to grow that positive number until it has a bunch of zeros on the end. Unfortunately, most people have a negative net worth because of their debt. Think about this. The average six figures of debt is a lot to subtract from what you own. And your goal should be to have zero dollars in that liabilities column.

And that means no consumer debt whatsoever, even knocking out the mortgage one day. And as someone who personally was 40 grand in debt not long ago, I know this all could sound like an impossibly perfect episode of Bluey, which is like all of them. So dang charming with those accents. Are they happy tears, Mom? Yeah.

Happy tears, honey. But it can be done. You can pay off your debt and owe $0 to anyone. I did it and millions of others have done it using the same exact financial plan. Is it hard work? Absolutely. It personally took me 10 years to go from broke to net worth millionaire, but it was absolutely worth it and I would do it all over again. So if you want to learn about the debt payoff method that worked wonders for me, be sure to check out this video up next or click the link in the description below. Thanks for watching. We'll see you next time.