The Rising Cost of Basics
Another reason people fall into debt is a sign of the times. The basic things needed to survive such as food and shelter is becoming more expensive every year. The fault of debt no longer falls back on the thought that people are spending more on a plasma tv using their credit card.
Studies show that family incomes have remained flat for some time while expenses such as medical bills, housing food and cars have risen and since the income didn’t rise that causes some people to go into debt.
The debt of the typical American family earning about $45,000 a year rose 33.1 percent from 2001 to 2004, after adjusting for inflation, according to a study based on data compiled from the Federal Reserve Board’s most recent Survey of Consumer Finances. The Fed report, released in February, gave raw numbers on debt levels. The new study analyzed the data more closely to determine the sources of debt. It was conducted by the Center for American Progress, a Washington think tank run by former Clinton White House chief of staff John Podesta.
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