According to a new study, many households across the United States actually have negative net worth. As of right now, a great many households have more debt and payments due than they actually have assets. This is a major low for the average American right now, since debt is literally outdoing earning for many of these families in a comprehensive way.
People in these situations report feeling like they are “drowning” and that there is little to no hope for them. Indeed, this pessimism is being readily felt across the country as economic conditions continue to be poor. The study also found that while the average savings of people has increased since 2008, the liquidity of their finances has not. In other words, savings have only increased enough to keep up with inflation and depressed economic conditions.
Declining home values have greatly contributed to these problems for many Americans- especially for the middle class. For many people, the home that they have is their greatest tangible asset. As prices plummet for those trying to sell their houses at a competitive price, it greatly reduces their relative financial strength.
All of these problems can be readily associated with the massive problems our economy has had for the last 4 years. Since the horrific stock market crash of 2008, problems with finances have climbed ever higher as the recession refuses to fully disperse even during the hopeful high notes on the market.
As the recession has not lifted and it is anyone’s guess if it ever will in full, adjustments are going to have to be made to our financial patterns if we want to get to a better place. Alternatives to current financial systems may be a viable way for people to gain leverage and improve their situations on the whole.