Debt Analysis

Debt, stress, demographics, and more

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How Analysis Posts Work

In our analysis, we take a deeper look at our survey results and highlight the patterns and insights we find under the surface using segmentation across meaningful demographics (like age, gender, or location).

By spreading the word, you can help us grow our list, get more responses, and have a larger positive impact on our communities. And now, to the main event…

Debt

Debt is something most of us have, either a little or a lot. It can be a huge factor in our lives: on stress, career choices, and lifestyle. And it feels like a taboo subject — talking about it can be pretty uncomfortable. We want to know how you think about it, and we want to share what we found.

Here are our questions and results, and below’s what I found most interesting.

First, our sample’s demographics

(When you look at surveys, it’s always a good idea to peak at that types of people that responded. Since we track how each person answers questions, we’re able to pull in responses from previous surveys for this. If some subscribers didn’t take the survey where we collected a demographic, they’re denoted by a “?” in the charts.)

You can see from the charts that our sample has more women than men, more young people than older, most are from Ada county (we just expanded from Boise to all of Idaho), and our respondents’ total debt amounts cover a pretty wide spectrum, with most somewhere around $100,000-$200,000.

(NERD ALERT: If you’re interested in knowing, I calculated that total debt figure by adding up all the self-reported amounts of debt per category and rounding the upper end of the range to the nearest $100k. You can see the categories in the overall results here. 🤓)


The more debt, the more stress?

Lots of different answers on stress levels

First out of the gate, I want to talk about stress. This was what I was most interested in with this topic — how stressful do people consider their debt. I know I can get stressed out about it sometimes, so I had a hunch I wasn’t alone.

Definitely not. As you can see from the overall results of the stress question, we’ve got a wide range of answers, with the mid-point being around “a moderate amount” of stress. That’s a good start, but let’s dig deeper.

Stress increases at $200k, and then doesn’t seem to change too much

The next most obvious assumption I had was that stress increases the more debt you have. Let’s take a look at that angle.

I’d say that’s true, but only to a point. At first glance, there doesn’t appear to be too big of a difference between the stress levels of folks with $200k, $300k, or >$300k in debt, but that does look quite a bit higher than those with around $100k or no debt. It looks like above $200k, around 50% reported either “A lot” or “A great deal” of stress.

Ok, that was fairly helpful, but not wildly illuminating. Let’s check what household income has to do with it.


More income, more debt, and more stress?

Don’t have this field for most, but we’re pretty spread out

In theory, the ratio of debt to income is what’s most important. In other words, if you have a lot of debt, but you have a lot of income, it might not stress you out. But if you have even a small amount of debt, but an even smaller amount of income, that could be really stressful.

To take a look at this, I pulled in answers from our respondents to the household income question we’ve asked in previous surveys. Unfortunately, most of the respondents hadn’t answered that question before, so we only have this info for about 1/3 of our sample. Oh well, let’s look for fun anyway.

If you’re in the bigger income group, you probably have larger amounts of debt

To give us bigger groups for comparison, I bucketed the household income by “<$75k/year” and “>$75k/year.” You can see that the larger income group does appear to have much larger proportions of debt, as we’d expect — they can afford more, right? But what do they say about stress?

The bigger income group has a high proportion of stressful answers

If we keep the chart the same, but then color in the proportions of the columns based on stress level, you can see that about half of the respondents in the bigger income group with $300k or more in debt are at least “a lot” stressed out.

That seems a little surprising — I would have thought that if you earn more, you can take on more debt without putting yourself in too much risk, so your stress might not increase. Looks like it does. I guess it just puts that much more pressure on you to continue to make a high household income — harder to go backwards on that than forwards.

Ok, this is clearing things up, but what about age? Maybe that’d be a better way to determine people’s stress about debt. After all, if you’re later in life and paid down more of your debts, you might be less concerned.


Debt goes up at 30; stays high and stressful until 60?

Debt amounts seem to jump up in the 30s

First, let’s look at how much total debt people have across age groups. At a glance, it looks like debt levels are highest for our respondents in their 30s, they’re still fairly high for respondents in their 40s-50s, and respondents 60+ have less. If you’re in your 20s, you could have a lot, but most of them have less also.

I think this might be a factor of when people typically buy their first house. Some people do it in their 20s, but many do in their 30s, and then debts decline as families age and perhaps kids move out of the house.

Stress stays high until you’re getting close to, or are, retired?

Back to stress. If we keep the columns the same again, we can color them based on stress level. As expected, folks in their 60s or 70s appear to not be very stressed about their debt.

But look at people in their 20s! There’s a lot of red and little green (stress!) in those columns. They might be dealing with student loans, and potentially a brand new mortgage as well, along with trying to get established in their career and pull in some good income. That’s a gnarly combination of financial challenges!

The proportions of stress don’t seem to get too much better before the 60s either. I’m guessing that probably entails starting families, paying for family fun, and eventually school tuition. Maybe the 60s are those relieving years when kid-overhead is out of the picture for many.


Other ideas: kids, education level, and relationship status

We’re missing answers from too many people to use these other angles. :(

Unfortunately, the demographic segmentation road stops here, for the most part. I had lots of other good ideas for slicing and dicing (whether you have kids or not, college or not, and are single or not), but answers to those questions from previous surveys are few and far between.

I’m looking forward to the day when our sample sizes are large enough that it doesn’t matter that we might be missing a data element for a large percent of respondents — a small percentage of a big number can still be very useful for analysis.


The more stress, the more influence on your life

Higher stress about debt corresponds to higher influence on respondents’ lives

Moving on from respondent demographics though, I’m interested in looking at answers to the “how much does debt influence you life” question, mashed up with stress.

Clear as day, you can see that if you don’t feel much stress, you don’t report that debt influences your life much. Along the same lines, if you feel a lot of stress, it influences your life a great deal. (Stress is bad, and it affects almost everything else. 😔)


Most stress: public speaking, then death, then debt

The smaller the bar, the higher the rank. Public speaking is the most stressful.

Sticking with the stress theme, we know that people are saying they feel significant stress from debt, but how does that compare to other things? Without a relative comparison, it’s hard to put this in perspective.

I asked our respondents to rank a bunch of different things that can cause people stress by priority. #1 is the most stressful; #7 is the least stressful. You can see in the overall chart the average rank number — the smaller the bar, the higher the ranking was.

Public speaking was the most stressful thing! Then death. (I’ve seen this in other research, and it always blows me away… Death is way scarier to me than public speaking! But I do have some practice…) Then debt. Debt was considered more stressful than Relationships, Family, Health, and Career (which was last).

My takeaway is that stress about debt is definitely serious… (And I’ve got some good future survey topics too! 😝)


That’s all for quantitative analysis. Now we’re going to shift gears to qualitative, and see what interesting comments came through.


Interesting Comments

Lots of interesting comments, as usual. I’ve highlighted several that I think are particularly thought-provoking or representative, and I’ve bolded key phrases to help you skim.

What gets too much attention?

Most-used words, sized by their frequency in answers
Making purchases on credit. I teach finance for a living, and one misconception I constantly hear is that credit cards are bad and nobody should use them. While credit cards can be used irresponsibly and lead to loads of financial troubles, they are not inherently bad. In fact, if used correctly, credit cards can be really beneficial to any individual.
Their wants. People have a difficult time distinguishing between needs and wants.
“Personal responsibility.” Of course we all make choices that influence our lives, but we tend to over-emphasize this over the harsh reality of our intensely class-segregated society.
People going into debt for everything is the new norm. It seems like it used to be only for a house, then maybe also a car. It’s a little out of control that people are in debt for everything now.
I am in a fortunate position and don’t think about this enough to know. I think too many people assume that all excessive debt situations are a result of poor choices when often we just don’t understand others’ circumstances.
Nitpicking “how” people got into debt in the first place (all that avocado toast!) instead of figuring out proactive measures to empower and educate everyone about financial basics.
Student loan problems. The vast majority of student loan issues have to do with students of for-profit schools who graduated without a viable or valuable degree. A reasonable student loan to get a degree from a traditional University or college, whether private or state, is still one of the best investments anyone could ever make in their life, returning an average of about a million dollars more than high school diploma over a lifetime in earnings.
How it can be used as a tool. Debt is only a tool for the lenders. It’s how they make their profit. For the borrower, it’s not a tool. It’s a wound.
The taboo nature of talking about it with others. We can all say we have debt, but no one will put a price on it. It is so shameful, that it makes it hard to talk about, deal with, and overcome.
The punishing of folks who get into the debt. Many of us are suffering years later from the repercussions of bad choices when we were younger. I was a first generation college student who took out student loans and used credit cards to supplement myself while I worked part time and did school full time. This put me on a bad path towards still having that debt over a decade later.

What doesn’t get enough attention?

Most-used words, sized by their frequency in answers
I think debt and financial planning need to be a more standardized and more prominent component of high school education. I had one “economics” course in high school which was supposed to cover debt and teach me how to be financially savvy, but the only things I learned from that class were 1) how to fill out a check, and 2) to start saving for retirement ASAP. Both useful things (arguably — checks aren’t terribly useful anymore), but certainly not the whole picture. Between my parents, university resources, and personal research I developed a better understanding of debt but still felt a little unsure about what I was getting myself into as I accepted student loans. I would like to see financial planning/ debt information courses at least available/ optional in high schools, if not a mandated part of curriculum.
Affordability of higher education in comparison to cost of living and wages/compensations. We aren’t keeping up, and those we are being counseled by (parents, high school guidance counselors) had a very different experience with student loan debt.
How it disproportionately affects low income households. Debt can debilitate a family, folks don’t understand how that stress can effect children. More emphasis should be put on financial skills in the classroom where young people still have time to make errors and learn.
Medical debt; like winning the losers lottery. Even though I don’t have medical debt, I’m too afraid to quit my dead-end job because I might lose my health insurance.
There are ways to minimize student loans that people don’t really try for. Filling out the FAFSA, going to an in-state college, finding cheaper living arrangements, well drinks instead of premium, etc.
Auto loans. There are too many individuals who are using debt to purchase brand new cars. Not only is the loan-holder paying interest on their vehicle, but they’re likely to have a higher premium on their care insurance because the car is more valuable.
Our culture has bought into the marketing that debt is OK and everyone has it. We need to exercise more self control and live within our means.
The role of predatory institutions and the culpability of our government (under either party) for our societal financial situation. Payday lenders, student-loan servicing companies, and credit-card companies all prey on the insecurities of working people who maintain an extremely high debt burden in order to survive and/or provide for our families. As a young person who already has a high debt-burden, it seems like we’re all too ashamed (and too busy trying to survive) to discuss how the economic organization of our society is significantly degrading our collective quality of life.
Student loan debt. Just because everyone else is doing it doesn’t mean you should. And as much as you may want to go to that dream school, is it really that much better to go into debt for the same degree you’d get at a more affordable school? Student loan forgiveness is also just pushing off the real problem. People need to live within their means and understand they can’t always be bailed out.
The emotional and mental impact. Being in debt/not having enough money restricts our ability to take advantage of certain opportunities, to have the ability to make important choices, and can generally wreak emotional havoc. When people are preoccupied with a difficult financial situation it often impacts other parts of their life including their performance at work and/or their relationships. There can also be a lot of shame or stigma associated with debt that can lead to feeling of low self-worth and feeling helpless to do anything about the situation. We’ve made it gauche to talk about money but that’s something I hope millennials are more open about than our predecessors so we can help each other not end up in what may feel like an overwhelming situation in the first place and lend emotional support if someone does find themselves needing financial assistance.
How much interest they are actually paying over the life of their loans and how much more freedom they would have if the saved their money for what they wanted and bought what they could truly afford.
The options to help get out of debt. Might be linked to the taboo nature of debt, so naturally if people don’t talk about it, then they won’t talk about solutions either.
The fact that many younger folks are slowed down by their debt to make any big changes in their lives. Most of my friends have debts, whether student loans, credit cards or medical — and it’s impacting their career choices and personal lives. I want to go back to school, but my debt stops me from pursuing my dream career now that I have figured out what I actually want to do. I also have been holding off on having children due to my debt as well. I think this situation will be more common with my generation and future ones.
How predatory student loans are and how expensive they are compared to the salary increase one can expect from a college degree (too expensive). How easy it is to accumulate debt — I have what I consider a lot of debt and I find it shocking how much available credit I still have. If I were to actually max out all the credit available to me there would be NO WAY for me to pay it back. Ever.

That’s all folks!

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This is what stress about debt looks like. (Source)

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(This still image is for the cover photo. Gifs don’t work for that…)