Is the Average American in Trouble Without Knowing It?

Problem #53: Too Many of Us are Content with being Average.

Are you content with your finances? Do you think you’re similar to the average American? If you could go back and change a financial decision, would you? What would you do differently if you knew then what you know now? Or are you happy where you are?

When it comes to money, I don’t think most of us want to be just average. We want to be successful, and we want to be able to shed the stress of managing payments and juggling bills.

So what does the average American’s finances look like? Let’s take a snapshot of the average American, and discuss the findings.

Average American Income and Debt

By definition, the average is mediocre or in the middle of the pack. There are some who are better than average, and there are some worse. It doesn’t matter what metric you are talking about, average is . . . well, average. From the, the average American household income is: $73,298. This is pretty of the average american's life

Out of that income, there is debt to be repaid: $132,529 to be exact (according to This includes all types of debt, mortgages, credit cards, car loans, and student loans. This number also includes those who are debt free, which brings the average down considerably.

If you average just those with the various types of debt, the numbers get worse.

The average American with credit card debt has $16,000 worth. Those in debt on their cars are in debt to the tune of $29,000. And those with student loans owe an average of $51,000. Mortgages come in at an average of $180,000 per household.

My Take

That’s a ton of debt! I’m sure you know, if you’ve read many of my earlier posts, that I take a pretty hard-line stance on debt and credit cards.

For instance, read this post about borrowing money, or this post about the dangers of credit cards. I stand by what I said in those posts. Borrowing money is risky and unnecessary. And credit cards are dangerous.

So, how many of you can relate with the “average American”, and the income and debt load?

Just so you know, I’ve had debt too: car loans, student loans, and a mortgage. And it sucks! Sure, it enables us to have nicer things like a newer car or house. But when it comes down to it, debt is an anchor. It makes you a slave to the bank.

The problem comes when we think it’s the only way. It’s not! If you think like this, it’s okay. I’m not upset with you, nor do I think I’m superior. I just want to show you a better way. The way of cash, and buying only what you can afford.

Buying with #Cash means you can actually afford it. Click To Tweet

When you get caught up in the marketing machine that is today’s culture, you become a slave to the “newer is better” mentality. A new phone every year, a new car every three years, and new appliances, clothes, or gadgets when it feels right. This is all fine, if you can afford it. But the average American CAN’T. And yet they take out more and more debt to keep up.

The advice that panders to the “newer is better” crowd, says that it’s okay to finance things you want. Just do it responsibly (whatever that means). But they never address the underlying problem of wanting things we can’t afford. They’re trying to please everyone. Luxury is accessible to everyone: with debt.

I refuse to enable this behavior. I’m not necessarily going to tell you what you want to hear. But I will have a discussion with you about your money views. I think that’s the great part about social media and blogs in general. We have a fantastic opportunity to engage in some meaningful conversations about important topics. That’s how we learn and improve.

I also understand there are unique situations. However a unique situation, by definition, is unique. Not everyone falls into this category. The average American is not unique. And they have not just a spending/debt problem, but a materialistic attitude.

the average american is in trouble

The Average American’s Savings and My Take

The average American has $96,000 in their 401k, even though the savings rate is a mere 5.5%. This is not good, considering that this number again is an average. Some have more, and others have less. Many are resigned to the fact that they will never be able to retire. This is sad. But it doesn’t have to be. Check out this article about how to retire making $30,000/year over at Zero Day Finance.

As far as liquid cash in a savings account or otherwise, the numbers are worse. According the, the average American has less than $1,000 saved. This level of emergency savings will be wiped out with one minor incident.

This goes hand-in-hand with debt. If all your income is tied up with payments, there is nothing left to save. You can’t “pay yourself first”, because you’ll never be able to cover all your bills. And once you miss a payment or two, your credit takes a hit. And it’s just a downward spiral from there. It’s a grim reality that the average American is facing. All because of the inability to delay gratification. Buy what you need, not what you want.


So, are you average? Does the average American’s situation describe your financial situation? A good income, but with loads of debt re-payments. My guess, is that if you’re reading a personal finance blog, you’re doing better than most. You’re attempting to correct the mess you got yourself in. Which is great.

If you are “average” when it comes to money, don’t be content to stay there. There’s always something we can do to improve. Make choices, hard choices to change your lifestyle. Cut back on your spending, start saving, and rise above the average American.

Do you disagree? What do you think? Let me know in the comments?

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  1. Hey, I am better then average…I ‘m your wife!

    Seriously, I wish we had made better choices earlier on in marriage. We might have been millionaires by now. 😉

    Those averages for debt in the average American household are crazy high. And a little disturbing.

    Love you,

  2. SO. MUCH. DEBT. I can’t even imagine. The availability of all this information about income and debt online is going to help I think. The more educated people become, the less likely they will get themselves into this crazy amount of debt. Or so I’d hope.

    • I hope it helps. It seems that those who read personal finance blogs are already aware and doing well though. If only we could get through to the rest . . . .
      Thanks Lance.

  3. I always strive to be above average. I bet if you go with median income, debt, savings, etc… the numbers will look much worse. I know a few people who are in their 40s and 50s who have no savings. They are in serious trouble but they’ll pray their worries away. What can I say to them…?

    Keep spreading the word Chris and be above average. 😉

    • Thanks for the feedback. I talk to people as well who have started late, or haven’t even started yet, and it’s sad, because it didn’t have to be that way. Hopefully we can get through to some, and encourage a shift in thinking. You can get ahead, and you can make it.

  4. Great post! At the heart of it is this consumer culture that we live in , and it’s sad. Things never make us happy; it’s a temporary “high”. Many have the “I deserve to have a new ____” attitude, but 15-20 years down the line they aren’t going to think they deserve the consequences of their choices.
    Again, great post… my hope is that all of us in the FIRE blog community can get the message out to those who likely aren’t reading these pearls of wisdom (they’re out driving their leased SUVs to the mall).

    • Right on, “consumer culture”. The future is closer than we think, and we have only ourselves to blame if it’s not what we want financially.
      I appreciate the comment. Thanks.

  5. Yes, the average American has a big issue with debt. Some debt is unavoidable like student loans or a mortgage. If you have to take on debt, try to take on as little as possible and pay it off quickly. Try to stay away from consumer debt at all costs.

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