This month’s AARP poll includes some rather shocking figures about consumer debt–shocking enough that somebody should have asked a few questions before publishing them.
AARP had research firm ICR survey 1,005 adults and asked the ones who had debt–loans, mortgages or credit cards–how much they owed each month on their debt. The answers were:
- 17% said they owed more than their monthly income
- 25% said they owed 75% of their monthly income
- 23% said they owed half their monthly income
- 33% said they owed less than half of their monthly income
Read that again. Only one out of three people with any debt said their debt payments consumed less than half their monthly income.
That just doesn’t jibe with other debt surveys, particularly not with the most comprehensive, which is the Federal Reserve’s Survey of Consumer Finances. The Fed found less than 15% of all families owed 40% or more of their incomes to debt payments. When you eliminate the quarter of households that have no debt, that still puts fewer than 18% of indebted households owing more than 40%.
Granted, the latest survey is from 2007, and many folks’ debt situations have gotten worse in the recession. But it’s hard to imagine they’re THAT much worse.
I think what we’ve got here is a failure to communicate. Perhaps the respondents were confused by the wording of the survey question, which asked them, “Compared to your monthly income, would you say what you owe in total each month on your debt is….” The “in total” phrase could have thrown them off and made them think they were supposed to compare their total debt to their monthly income.
Or maybe a good number of respondents confuse “debt payments” and “bills.” Certainly a lot of indebted families live paycheck-to-paycheck, and that might explain the wonky figures.
You can check out the AARP survey by CLICKING HERE, but this survey seems destined to join the myth of the average $9,000 credit card debt in the statistical trash bin.
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