More than 40 Percent of Americans Have Past-Due Debts

Madison Agee

In a report released in July, the Urban Institute found that 5.3 percent of American adults have a debt past due – meaning anywhere from 30 to 180 days late. To become current on these debts, these individuals would have to pay an average of approximately $2,300 per person. Even more alarming, the study also revealed that 35 percent of American adults have a non-mortgage debt in collection (more than 180 days past due). These 77 million Americans owe an average of about $5,200 each.

As we’ve discussed before in this blog, financial well-being is one of the five inter-related elements of well-being – along with purpose, social, community and physical. Because these elements are interdependent, low financial well-being can negatively affect the other elements. Low financial well-being can adversely impact physical and emotional health, put incredible strain on family and social relationships, decrease people’s interest or ability to engage in their community, and otherwise act as a barrier to people living their best lives. At work, it can make an employee less productive (imagine trying to get an important project finished if your water is in danger of being shut off) and less willing to engage in any well-being improvement programs offered by the company. In short, financial well-being matters – a lot. We should all be talking about it and devising ways to improve it.

Dave Ramsey is someone who talks about financial well-being and the ways in which individuals and families can alleviate financial stress. Considered America’s trusted resource on money, his straightforward approach to financial management, household budgeting, debt reduction and savings has been put into practice by millions of Americans. Perhaps most importantly, Ramsey understands that the key to improving financial well-being is achieving and sustaining behavior change, one step at a time.

One of the millions of people Ramsey has helped, a guy named Vince, recently garnered some media attention when he posted a hilarious online advertisement listing an amp for sale. In the ad, Vince laments, “Dave Ramsey ruined my life” by advocating “tightening the old spending belt and saving all of your disposable income.” The tongue-in-cheek tone of the ad has Vince remembering with nostalgia a former period in his life when he could buy things that brought him fleeting enjoyment but added to his household debt. To keep faithful to Ramsey’s philosophy, Vince is selling his amp to earn enough cash to purchase an acoustic guitar he’s been eyeing.

Vince listed his amp for sale so he could earn enough cash to buy an acoustic guitar. Vince decided to sell his amp so he could earn enough cash to buy an acoustic guitar. With this kind of savvy approach to money, he hopes to avoid being one of the 40% of Americans with past-due debts.

A follow-up article to the ad captures Vince’s more sincere feelings toward Ramsey’s approach. Vince says, “[I]t's given my wife and me something concrete that we can be together on regarding finances,” noting that “having unified financial goals plays a big role in marital harmony.”

Although Vince’s ad puts a humorous spin on raising your financial well-being, it’s an incredibly serious issue. Unless people are able to adopt new attitudes and behaviors toward their money, we’ll likely continue to see staggering statistics like those in the Urban Institute study for some time to come.