Average Family Debt: The Average Family has Over $100,000 in Loans

November 16, 2011
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According to recent information released by the Fed, the average family has roughly $100,000 of debt.

I decided to write this post when the Fed released their quarterly results on household indebtedness. Frugal Toad had an interesting take on the report, so please stop over and check out Paul’s thoughts. I also recommend reading Personal Finance Whiz, but in a few days when Jeremy comes up with a nearly identical post.

The report announced that in total, the American population owes an astounding $11.4 trillion in mortgages, auto loans, credit cards and student loans. It’s a very imposing number, so I wondered just how much strain this figure burdened the average American Family.

I was shocked to learn that the average family debt totaled more than $100,000. This according to recent census estimates, which provided me with a total of 112,611,029 households with 2.6 persons per household. Divide $11 trillion by 112 million and suddenly, that debt per family number gets much smaller.

I thought my estimation of family debt by using households might be a bit too crude, but it seems justified when I headed over to the Fed’s Family Finances Survey. It turns out that less than half of all families have any real estate related debt or installment loans, this includes mortgages, car loans and home equity loans. Only 43.2% of families have any credit card balance.

Just in case you were wondering what the average family owes by type of debt:

  • Mortgage – $71,000.88
  • Home Equity Revolving – $9,000.11
  • Auto Loan – $6,000.07
  • Credit Card – $6,000.07
  • Student Loan – $5,000.06
  • Other – $3,000.04

What About Median Family Debt?

The Fed’s 2009 Family Finances Survey also provided the median debt for those families with balances. These numbers make a lot more sense:

  • The total median family debt is $75,600
  • The median family mortgage debt for primary residence is $112,000
  • The median family installment loan debt is $14,700
  • The median credit card balance was $3,300
  • Other debt for the median family came to 5,200

So what can we take away from these statistics? This could easily be a post about the danger of financial statistics, but there are far more important lessons worth gleaning.

There is Hope for everyone that Holds Debt

Roughly 74% of families have some kind of debt and I doubt that this debt started out at $100 in total. I think an argument can be made that many families find a way to overcome their debt balances. What these statistics can never tell us is how it is accomplished. It’s up to you to find what works.

Young Adults Probably Have More than Median Debt

The median age for an American is 36.9 years old. Thus, if the median family debt balance is $75,600, I’d be willing to wager the median young adult has more debt. Statistics can only provide so much useful information so while you may be wishing you could have a debt figure as low as the median family, remember you have many years to catch up.

Mid-Thirties and Still So Far to Go

If the median family still has $75,600 in their mid-thirties then there is still a long road ahead. It reminds me of an old adage about how you don’t make money until your forties and the median family debt seems to confirm that saying. Pay off debt as quickly as you possibly can, but you may need to temper your expectations. Otherwise, you may risk disappointing yourself should you fall short of your financial goals.

Of course, this is all just consumer debt we are talking about. When you consider the federal, state and local government deficits and trade deficits, the average family debt is quite a bit more intimidating.

*This post has been altered from the original to correct math errors in the average family debt calculation.

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12 Responses to Average Family Debt: The Average Family has Over $100,000 in Loans

  1. Paul @ The Frugal Toad on November 17, 2011 at 2:18 am

    Just before the housing bubble burst middle income families had a debt to income ratio of 155% which is dangerously high. I have seen recent figures somewhere around 107% which shows the deleveraging that is going on. This is a positive trend, lets hope it continues!

    • Shaun on November 17, 2011 at 11:27 am

      Agreed. Macroeconomically, you can’t have a healthy economy fulled only by credit.

  2. Derek@LifeAndMyFinances on November 17, 2011 at 3:12 am

    Thanks for linking to my article! I’m definitely an advocate of a no-debt life. Not only do you avoid interest payments, but you also put yourself in a great investment position. Congrats on bringing that Alexa Rank below 200k by the way. ;)

    • Shaun on November 17, 2011 at 11:25 am

      Thanks Derek! It’s hard to deny that debt free is a nice place to be.

  3. Nerode on November 17, 2011 at 5:39 pm

    Maybe I haven’t had enough coffee yet and am missing something….but it seems to me that $11.4 trillion divided by 112 million households amounts to 101 THOUSAND dollars per household.

    • Shaun on November 17, 2011 at 10:36 pm

      Ugh! You’re right. I was using billions instead of trillions. I think it is me that needs the coffee.

    • Shaun on November 17, 2011 at 11:48 pm

      Thanks for the correction. Trillion was such a big number I forgot billions :(

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    credit card debt negotiation…

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