National household debt lowest since 2006
Debt down just in time for buyers, retailers preparing for holiday season
Experts say household consumer debt is the lowest it's been since 2006 -- another sign the economy is starting to bounce back.
It's perfect timing as the news comes right as buyers and retailers prepare for the upcoming holiday season.
"I would certainly say that nothing is down. Everything is up, including groceries, gas, everything," consumer Geri Johnson said. "I'm spending a lot more money for less than I did in 2006."
That's pretty much been the mantra of people in America since the economy spiraled downward in 2008. But according to a recent Moody's, Bloomberg and Los Angeles Times study, consumer debt for American families is the lowest it's been in six years, meaning a smaller amount of every paycheck is going to paying off credit car loans, car payments and mortgages.
"Because of the 2008 recession, people felt that squeeze, that crunch, so people had less money to spend because rates on debt they had consumed had actually increased," financial planner Titus Pittman said. "It made people start focusing on paying that debt down which allowed them in the end to have more disposable income. As a result of that, the levels we see now are the lowest we've seen since 2006."
Pittman helps businesses and individuals plan out their spending on a daily basis. He said the recession forced people to take a step back and re-adjust their budgets. Pittman believes we're just now seeing benefits of that.
"The 2008 recession actually allowed businesses, as well as consumers, to really take a reality check," Pittman said. "Before that time, credit was more accessible to get and more cheap to get so people actually began to start extending themselves beyond what they could afford."
Economic concerns are still holding families back though.
"I don't see it," one consumer said. "I've been laid off since 2008 from one job working another one, so I don't see it getting any better. Not on my end anyways."
With the holiday shopping season right around the corner, economists are studying consumer confidence, trying to predict whether or not the post-recession mentality is really starting to settle in.
"I see myself spending less because health care has gone up so tremendously and we have some health issues in our family, so Christmas is going to be put on hold this year," Johnson said.
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