Americans Are Willing To Give Up 3 Things To Be Totally Debt Free — Would You?
In a proposition that sounds like a premise for an episode of “Black Mirror,” 2,000 consumers participated in a survey commissioned by Beyond Finance that asked what they’d be willing to do to get rid of their debt.
Across America, the average consumer debt balance reached over $101,000 by the end of 2022, according to Experian. It’s no wonder that 32% of Americans would be willing to give up social media for a year, the comfort of their own home (a.k.a. spend a night on a remote island — 31%) or internet access for a month (29%) to clear their debt balances.
What else were consumers willing to endure to go debt-free?
What Would Americans Do To be Debt-Free?
Considering the stress and financial burden debt carries, it’s understandable that people were willing to make serious life changes to eliminate their debts. A smaller subset was even willing to take on more dangerous activities like running with bulls or chasing a storm during tornado season.
- Give up social media for a year – 32%
- Spend a night on a remote island – 31%
- Give up internet access for a month – 29%
- Go skydiving – 20%
- Eat something gross – 19%
- Go storm chasing during tornado season – 18%
- Get tackled by a linebacker – 14%
- Go BASE jumping – 12%
- Swim with sharks – 12%
- Complete a triathlon – 11%
- Run with the bulls – 11%
Even with all the crazy things people would do to get out of debt, the study also found that only 38% of people feel “very confident” that they’d be able to stay out of debt once it’s gone. That begs the question: where is all this debt stemming from?
Why Americans Are in Debt
The average person from this study felt that they’d only be able to stay out of debt for about 8.5 weeks before having to take on more debt. This hints at a more fundamental issue which was confirmed by other data from this poll.
Out of all the credit options used to accumulate debt, the biggest hurdle identified by this study was credit card debt at 57%. Many people within the study shared that their debt accumulated due to the following reasons:
- The rising cost of living – 54%
- Unexpected expenses – 46%
- Rising interest rates – 29%
- Not having enough support from others – 20%
Only 16% of respondents shared that debt stemmed from spending to keep up with others. Overall, it was found that 56% of people accumulated debt from spending on necessities, not indulgences. Although debt might be viewed as a moral failing by some, the data from this study showed it’s actually being used to help people survive rising inflation, a steadily increasing cost of living, and a looming recession.
Debt gets a bad reputation, but sometimes it can help you achieve goals like buying a new home, getting a new car or simply having a way to pay for unexpected expenses. This study also found that 48% of consumers felt that their debt was worth having.
Three types of debt were considered the most worthy by respondents in the study. Thirty-eight percent felt a mortgage was worth the added debt, followed by the purchase of a vehicle (33%) and home repairs and improvements (28%).
Less Extreme Options To Eliminate Debt
If you’re in debt, you don’t have to give up your internet access or get tackled by a linebacker. Realistically paying off your debt happens by making a plan and sticking to it. It’s far more boring, but a solid plan enables consistent progress toward your goal over time.
- Balance transfer: Credit card companies often have limited-time offers that allow you to transfer a balance from another card at 0% APR for several months. This could save you money on interest and help you pay down debt faster.
- Debt consolidation: Pay down your debt by refinancing high-interest debt with a lower-interest option. This allows more of your monthly payment to go towards the principal amount, which helps you pay off debt faster. Mortgages and car loans are often refinanced when rates drop to take advantage of savings on interest.
- Snowball or avalanche repayment method: With the snowball repayment method, you repay your smallest debt balance first. Once you pay that off, you add the payment you were making to your next biggest card and repeat the process until you’re debt-free. The avalanche method works similarly, but instead, you’d be working toward paying down your largest balance first.
Bottom Line
Americans are in a significant amount of debt, but it’s not all bad news. Some of it is a signal of a changing economy, while other forms of debt allow us to achieve our dreams of home ownership or a new car. While the prospect of doing one action to eliminate your debt and start fresh is tantalizing, the reality requires more planning and discipline to achieve.
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