How we went from near record savings to record debt in just two years
. What's so strange about this is that back in 2021, that debt had fallen to near-record lows.
"We saw Americans across the income stream save a lot of money. I mean a
lot
of money," says Jill Schlesinger, CBS news business analyst and author of The Great Money Reset.
Schlesinger says stimulus checks, lockdown and pay raises had people in really strong financial shape. "But then 2022 starts and inflation doesn't go down," she says. "And then we saw many people plow through those pandemic era savings, left with nothing."
Schlesinger says the rising price of basics, like food, gas and clothing, have landed millions of Americans in real financial distress. "For a lot of people, this is not, 'I'm going out and buying something fancy,'" she says. "Things are more expensive and just to keep up with where you were last year, you have to pay a lot more."
I'll be 300 when it's paid off.
Stephanie Roth watched her debt balloon, along with her minimum payments. On top of that, unexpected expenses started to spiral, like when her daughter fell and needed two stitches on her chin at the emergency room. That cost her $800.
Roth's credit card debt seemed to explode, from a few thousand dollars to more than $10,000 and now it's about $25,000.
"Sometimes it feels very heavy, like crushing," says Roth. "I just think, 'I'm gonna have to pay this back and I don't know how that's gonna happen. If I do just the minimum payments, I'll be like 300 when it's paid off.'"
Credit card nation
Credit card debt in the US has been rising at one of the fastest rates in history. We collectively owe nearly $1 trillion dollars on our cards, an all time high. And with interest rates rising, getting ahead of the debt gets harder and harder.
Now millions of Americans, like Roth, are falling behind on their finances. And help can be hard to come by. Roth tried to take advantage of government assistance and services, like free Pre-K for her daughter and SNAP food benefits, which would help her financial situation.
But in every case, Roth found she made too much money to qualify. "I just make enough to not be poor enough to qualify for services," Roth says with a laugh. "I don't know how, because I'm like, 'Dude, I am so poor. You don't even know.'"
The sandwich and cupcake mom
Roth tries every month to pay a little bit more than the minimum payment, but most of the time it just doesn't happen. At the same time, she worries her kids are missing out on things.
"That's probably my biggest focus is making sure that they are having those fun, memorable moments," she says. "Moments that could give them joy... because this is a special time in their lives and it's been so hard. We've all been through a lot the last year or two."
Roth dreams of having enough extra money to take her kids out for ice cream on a whim or to the Build-A-Bear store.
And of once again being the mom who signs up to bring sandwiches and cupcakes to the Valentine's Day party at daycare, instead of the bananas.
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Wednesday, March 8, 2023 at 10:38 am