Household Finances Healthier

Published on July 8, 2013

, it has been reported that the debt-service ratio* for American households has fallen to its lowest rate since the 1980s. This means that American households are spending less of their disposable income on mortgages, consumer loans, and other types of credit.  People have been taking out fewer and smaller loans as well as paying off old debt. 

The Great Recession showed Americans, rather starkly, the dangers of overspending.  In a way, it brought us back to fiscal reality. The Great Recession shocked Americans and made us collectively wake up to the fact that when we spend money that we do not have, or will not be able to pay back, we are putting our future financial stability at great risk. 

So why have our finances become healthier? 

A few factors are boosting the financial health of some households:

Unfortunately, the Great Recession left many people with seriously diminished retirement funds, so the earlier you start saving for retirement the better off you’ll be in the long run.  With household finances getting healthier, people are beginning to look toward the future with hope and optimism.  Now is the perfect time to take some of your hard-earned money and rather than take on debt, invest it into your future―perhaps with a self-directed retirement plan that you control. 

At Next Generation Trust Services we encourage everyone to make sure that your finances are strong when you are able to retire.  By saving early and often, you will be more prepared to pay for retirement and all of the costs that can go along with it. If you are interested in self-directing your retirement plan, we are here to help you get on the path to a healthier retirement.

*Debt –service ratio is the ratio of debt payments to disposable income

Back to Blog