This Shocking New Study Says 1 in 10 Americans are Now $100,000 in Debt

how to get out of debt
Pedestrians walk through New York's Times Square under a glowing Bank of America marquee, Tuesday, Nov. 25, 2008. AP Photo/Craig Ruttle
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You’ve probably seen this bumper sticker somewhere: I Owe, I Owe, So Off To Work I Go.

Yup, we owe.

An eye-opening new study painfully details just how much debt Americans are carrying around, and the results are nothing short of astonishing.

If you look at its findings, you might have one of the following reactions:

  • Man, we all have a ton of debt.
  • Wow, I thought I had debt, but apparently a lot of my neighbors are REALLY in debt. Like, up-to-their-eyeballs in debt.
  • Jeez, we sure don’t deny ourselves when it comes to extras like hobbies or travel or entertainment, do we?
  • Ugh, I really do need to get out of debt.

Never fear. We’re here to help you with No. 4.

The new report, commissioned by financial services company Northwestern Mutual, studied the finances of nearly 3,000 people. It paints a picture of Americans who are deep in the red but keep on spending like there’s no tomorrow.

Here are some of the scariest tidbits:

  • 1 in 10 Americans have more than $100,000 in debt, not including their mortgages.
  • Nearly half the country owes at least $25,000.
  • The average American borrower owes $37,000.
  • 4 in 10 say debt causes them anxiety and impacts their financial well-being.
  • 1 in 10 have so much debt, they’re pretty sure they’ll die in debt.

So! Now that we’ve cheered you up with these fun facts and figures, there’s also this to think about:

After paying for basic necessities like food and housing, Americans spend 40% of their income on fun things like travel, entertainment and hobbies. Meanwhile, just 33% goes to pay off debt.

Experts say that’s a no-no.

“Building financial security while saddled with high debt is like running a race with a weight around your ankle,” says Rebekah Barsch, Northwestern Mutual’s vice president of planning. “We are carrying around this debt that is getting more expensive the longer we hold onto it, and then spending on things that are not essential.”

It doesn’t have to be this way.

Trying to figure out how to get out of debt? Here are three ways to get started:

1. Map Out What You’re Dealing With

Figure out exactly what kind of debt you have.

For example, which companies do you owe money to? Are any of your debts in collections? What are your minimum monthly payments on each credit card or loan?

An easy way to do this is to sign up with a free service like Credit Sesame. This tool shows your balance on any unpaid bills, credit cards or loans. It also offers tips on reducing your debt and raising your credit score.

2. Consolidate Your Debt

Once you fall behind, you may find yourself getting crushed by credit card interest rates north of 20%. You’ll never catch up that way. You’re spending so much on interest, you’ll never pay off your balances.

If you’re financially treading water like this, it might be worth consolidating and refinancing your debt.

By refinancing an existing loan, you’re taking out a totally new loan, which comes with new terms and (ideally) a lower interest rate. By consolidating your existing loans, you lump all your debt into one big payment, so you’re only making one payment and dealing with one interest rate per month.

Make sense but don’t know where to start? Fiona is an online marketplace that offers consumers personalized loan offers. Think of it like Zillow — but for personal loans.

Rates start at 4.83%, and you can check yours by entering a loan amount here (up to$35,000) and comparing your personalized options in under 90 seconds.

3. Protect Your Identity

What if you work hard to pay down all your debt and you’re totally responsible with your credit going forward — only to take a hit because of identity theft?

We know you don’t want to risk all your hard work.

A free service like TrueIdentity helps you avoid this situation by keeping a watchful eye on your finances. It sends alerts by email, phone or text if someone tries to apply for credit in your name.

Now is the time to start tackling your debt in earnest.

You don’t want to be one of the 1 in 10 Americans who are sure they’ll be in debt ‘til they die.

That’s no way to live.

Your turn: How much debt do you have?

Disclosure: This post contains affiliate links. May we all be a bit richer today.

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. He’s quite familiar with debt, based on personal experience.