Now, the Joneses have no debt, meaning to stay up you are going to have to get rid of it too

Keeping up a social status has often been referred to as “keeping up with the Joneses”. This is what causes individuals to just buy things without thinking about it. Many of these things consist of iPhones, flat screen TVs and riding lawnmowers. The Federal Reserve has explained that more people are getting debt settlement relief rather than using credit cards as the Joneses.

Household debt falling, says Fed

The household debt in America numbers were shown by the Federal Reserve just lately. It seems that once the recession came, people decided to tighten their belts and pay things off. Nobody will do poorly with debt consolidation. The Wall Street Journal reports that debt levels have gone down for seven quarters. Second quarter of 2010 showed a 1.5 percent reduction from the past quarter and a 6.5 percent reduction from the previous peak, in third quarter of 2008. That’s $ 178 billion of debt that’s been paid off in the last 3 months. Every person is doing better every month. A cash now is given to these individuals with the losing of debt.

Warning you about this one

Falling household debt and an increased savings rate isn’t really the entire picture. Consumer debt is going down. But delinquency has gone up a bit. This quarter was also the first instance of delinquent debt being reduced, which fell by 0.5 percent. However, as a corollary, bankruptcies increased by 34 percent. It seems fewer people are using paycheck loans to keep up with paying for credit cards, as 272 million accounts were closed and only 161 million opened. At this rate, credit card companies might need an emergency cash loans themselves.

Getting rid of debt

Debt is something Americans are avoiding. They’re also trying to get rid of what they have. More individuals are trying to pay credit cards off than get new ones. Regrettably, you will find people nevertheless doing poorly. Bankruptcy is happening more often. Still, there are a lot of optimistic signs that individuals want to stay out of debt, preferring the security of cold, hard, cash.

Additional reading

Wall Street Journal

blogs.wsj.com/economics/2010/08/17/ny-fed-households-continue-to-reduce-debt/