Unpacking America's Debt Crisis: How Much Trouble Are We In?

In America, there's a saying, "If you can't afford it, finance it." Our economy is facing serious issues, and signs are everywhere. Total household debt recently rose by over $84 billion, reaching $7.69 trillion. This indicates people are spending money they don't have. 📉

Mortgage debt increased by over $190 billion to $12.44 trillion, and auto loans climbed by over $9 billion to $1.62 trillion. Credit card debt hit over $1.12 trillion in early 2024. Unfortunately, we have record high delinquencies. Serious delinquencies for credit card debt are at 10.7%, meaning over $100 billion is in default. This is concerning because defaults usually lead to closed accounts and lower credit scores. 😟

Living on a cash basis is a good way to manage finances. About a decade ago, I adopted a cash system with envelopes for different expenses. It helped me control my spending. The key to better financial management is measuring every dollar and having an accountability partner. 🌟💵

We also need to address real estate. Sarasota, including Manatee and Charlotte counties, saw the biggest price reductions in homes. Inventory is rising, especially in Charlotte County, which had a threefold increase in homes for sale year-over-year. This is due to new construction, where builders offer incentives like upgrades and lower interest rates. 🏡⬇️

Most areas with significant price cuts are in Florida, such as Cape Coral and Tampa, which have seen a sharp rise in inventory. More listings lead to more pressure to sell. 📈📉

The best time to buy a house is when you need one. Don't worry about inventory, interest rates, or prices. Real estate has been my best investment, despite some losses during the 2012 market downturn. 🏠💪

In summary, the US economy is in trouble with rising debt and delinquencies. Adopting a cash-based system and careful financial management can help individuals avoid falling into debt. Meanwhile, the real estate market, especially in Florida, is seeing significant changes with increased inventory and price reductions. 📊🔄