What Is Your Total Debt?

We live in complicated times. Potential property owners are willing to invest a substantial amount f their savings and future incomes in a home or business; high school graduates are willing to go into significant amounts of debt to acquire a college degree that promises a higher overall income; individuals are willing to play the stock market in an attempt to expand their personal portfolios even if there is some risk involved. As a result, it is often important that financial calculators are used to determine initial down payments, the implications of various interest rates, and the penalties that will be assessed when someone is tapping into retirement funds before they mature.

Although we are known as a society of extreme consumerism, or perhaps because, it is important to pay attention to the kind of money we spend. The decision to purchase something with the cash that we have on hand or the funds that we have in the bank is one thing, but the constant temptation to make purchases on credit is a habit that leads many families burdened with insurmountable debt. Paying high interest credit card minimum payments leaves many families living paycheck to paycheck, with little, to no reserve, set aside for an emergency.

Teaching Your Children the Benefits of Financial Security Is Important

Although this may be a generation that is burdened with overwhelming debt, there is hope that today’s parents will teach their children to live a different kind of life and to be a different kind of consumer. Paying for items that you want up front, without relying on a credit card, is a far more responsible approach to life. Leaving the use of financial calculators and loans for the largest purchases like a home is a far better decision when it comes to starting off in life. Adding in a car car loan to a home mortgage should be the limit for what a new consumer is willing to do. Already likely saddled with a fairly significant amount of student loans after completing a college degree, a graduate who is just entering the work force needs to be especially careful when it comes to taking on any other unnecessary debt. Short term happiness can lead to long term financial responsibilities and there are many in the younger generation who realize these traps.

Consider some of these facts and figures about the benefits of using a financial calculator to determine long term implications of major purchases and the problems that some some consumers find themselves in:

• $137,000 is the current average mortgage balance across the U.S.
• In comparison, $244,000 is the average new mortgage balance in the U.S.
• Across the country, $9.9 trillion is the total mortgage debt in the U.S.
• 43.9% of mortgages originated by banks, while 9% of mortgages originated by credit unions.
• In addition to home loans, a record 107 million Americans, which represents 43% of the entire adult population, have auto loan debt, according to data released this week by the Federal Reserve Bank of New York.
• One encouraging statistic is that total bank deposits rose 6.6% last year to $10.7 trillion. This extends the steady growth seen in recent years, according to ata from the Federal Deposit Insurance Corporation.
• As more and more people are using their digital data to make and charge purchases, there are, of course, some risks. For example, nearly 15.4 million consumers were victims of identity theft or fraud last year. In total, thieves stole $16 billion last year.

In addition to the personal finances that effect the economy of the nation, there are also many small businesses that contribute. For instance, there are 28.8 million small businesses in the U.S., according to the U.S. Small Business Administration, and these businesses employ 56.8 million people. Providing substantial benefits to the economy of the nation, these small businesses play an important role in many communities. In fact, the health of the small businesses in a small town or large city serve as an indicator of the overall health of that area’s economy.

Approximately two-thirds of business survive two years in business, half of all businesses will survive five years, and one-third will survive 10. Financial calculators help many future business owners keep these businesses successful.