Debt and the American Family

Has the mortgage meltdown brought an awareness to how people especially the subprime borrower handle money?

The answer is NO. Instead the media and just about anyone who has an opinion has decided to blame the mortgage and real estate professionals who put them in mortgages and homes they couldn’t afford.

If you really want to understand how the average American family handles money especially debt, read this article by the New York Times entitled Couple Learn the High Price of Easy Credit. (Login required)

Rather than summarize the article, here are some of the interesting snippets:

“The Sears one is 32.24 percent,” Ms. Moellering said, reading a credit card statement with a balance of $5,955, including $155 in monthly finance charges. The high interest rate took her by surprise. “That’s nice,” she said sarcastically.

Their debt escalated when they decided to get married. They paid for rings, a reception, a honeymoon and a new bathroom — about $50,000 in a seven-month stretch. “In such a short period of time, there’s no way to do it other than credit card debt,” Mr. Moellering said.

“It’s been almost two weeks since we’ve had time to sit down and go over the bills,” Ms. Moellering said. “You can’t do it every day because we both work full time. I’ve got two kids; they want all our attention; they haven’t seen us all day. We’re trying to cook dinner. We have to do the dishes, fold the laundry. We’re exhausted. And on the weekends the kids want our attention, and we want to spend time with them; we don’t want to spend time going through the bills.”

Is this how your family handles debt?

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Tagged with: debt • mortgage • prime • rate • real estate • Subprime

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