The stock market keeps making new highs, the number of new jobs are at a record high, and many millions are enjoying a tax cut, but don’t try convincing consumers that happy days are here again. Nearly half know things are not as good as they sound, and they know this from a very reliable source: their own experiences.

A very recent report from the bank UBS has confirmed what many people already knew: Nearly half of all US consumers don’t have enough income to cover their expenses. There are serious financial pressures out there, and they’re not getting any better.

According to UBS analyst Matthew Mish, lower-income consumers have seen very little increase in their net worth in the last decade. Even worse, during this time they’ve added a very significant amount of credit card, auto loan, and student debt.

Rates on many federal bonds and notes have declined significantly in recent months. Consumers, however, not only are not benefiting from this trend but are being squeezed by record-high credit card rates.

According to Mish, only 17% of consumers reported an improvement in their financial situation in the last six months. What this means is that if the economy were to slide into a mild recession, or if the employment numbers weaken from current highs, or if the stock market has a long-expected correction, many millions of people would find themselves in even more precarious financial positions than they are in now.

Actually, Mish believes the economy is already slowing, and that the ramifications of this are already affecting consumers. “The lower-income consumer remains under disproportionate pressure,” he wrote. And he believes their weakening financial strength will become more evident very late in the year – exactly when the year-end shopping season peaks.

If consumers pull back on spending, an economic downturn will become more evident since consumers account for 70% of America’s GDP.

I Owe, I Owe

A great deal of the financial pressures so many people are experiencing now are related to high debt. So just how much debt does the average person carry? Estimates vary, in some cases widely, but the following numbers give an idea about the magnitude of the problem.

*In 2017, the average amount borrowed for a new car was $31,099, which on average means monthly payments of $515; loans for used cars were $21,375, which resulted in average monthly payments of $398. According to a Finder analysis of Federal Reserve Bank of New York data, the total amount Americans owed for their auto loans at the end of 2017 was $568.6 billion.

*The average student loan debt in America is about as much as that of new cars. The current average outstanding student loan debt on June 19, 2019, was $32,731. The total amount of student debt is approximately $1.4 trillion.

Statistics compiled by the website NerdWallet in 2016 show that the average American household has $16,061 in credit card debt.

And people are having a difficult time making the payments on these (and other) loans. The number of student loans, auto loans, and credit card debt 90 days or more delinquent all are significantly higher than they were a year ago.

A Debt Of Gratitude

Here’s another shocking statistic: Americans in their 60s have nearly as much student loan debt as young people in their 30s have, according to data from credit agency Experian.

Experian also found that the average balance borrowers aged 60-69 owe for student loans has increased to $35,637 – only slightly lower than the $36,406 that 30-year-old students owed on average for their student loans. In other words, student loan has become a burden not just for young people, but also for retirement-aged people.

Why do so many 60-year-old-plus people have so much student loan debt? The answer is amazing: They are helping their children.

According to MSN, supporting adult children through college and beyond is an unexpected retirement expense that has become common. A Merrill Lynch survey found that 79% of parents in or approaching retirement are still supporting their adult and college-age children.

That people at this stage of their lives are taking on so much debt to help their children is very gracious and generous. However, it comes at a high price.

Many people in this group are not adequately prepared for their retirement. The added debt means that some will have to delay their retirement and that others simply will not be able to retire at all.

Borrowing money is not easy, but repaying it is always much more difficult. Debt often necessitates making major changes in one’s lifestyle, and it always creates ongoing and serious pressure. It should be avoided and minimized to whatever extent possible.


Gerald Harris is a financial and feature writer. Gerald can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.