Many Americans appear to have cast aside the frugal habits they adopted in the wake of the recession, a new survey from the American Institute of CPAs finds.
The survey results showed that 73% of Americans were living with debt, arising from factors such as mortgage costs, student loans, everyday expenses and a lack of income.
Harris Poll conducted a telephone survey between Sept. 28 and Oct. 1 among 1,004 U.S. adults, 678 identified as having debt. The sample included 180 millennials, 164 Gen Xers and 364 baby boomers.
The third-quarter report from the Federal Reserve Bank of New York showed that total household debt hit a new peak of $12.98 trillion, up $116 billion from the second quarter and $280 billion ahead of the previous high reached in the 2008 third quarter.
Debt’s downside extends beyond the interest Americans are being charged. Thirty-nine percent of survey respondents said they felt anxious just thinking of paying off their debt.
“For Americans watching their debt levels rise while they struggle to make monthly payments, the situation can feel hopeless and have a serious impact on their quality of life,” Greg Anton, chair of the AICPA’s national CPA financial literacy commission, said in a statement.
“The good news is, people don’t need to be held hostage by debt. Establishing a plan to live debt-free in the future will help reduce your anxiety today.”
Fifty-six percent of Americans with debt said it had negatively affected their life. For 21% of these, debt was causing relationship tension with a partner or spouse, and for 11% it was prompting them to mislead family or friends about their finances.
Debt is also insinuating itself into all aspects of holders’ daily lives, according to the survey. Thirty-one percent said they worried about their debt in general, 18% worried about it at work and 25% went to bed thinking about it.
The survey found that living with debt was both a financial and a mental burden for 28% of Americans who said they stressed about everyday financial decisions. Nearly one-fifth of those with debt said they had received letters and calls from collection agencies.
While the low interest rate environment can keep payments lower, a quarter of respondents said they were worried that a rate hike could increase payments.
Some two-thirds of millennials with debt reported that it had negatively affected their everyday life, compared with about half of baby boomers and three-fifths of Gen Xers with debt.
The AICPA said most concerning was the survey finding that of those with debt, millennials were twice as likely as boomers to worry about it. Thirty-seven percent of the younger cohort said their debt caused them to stress about everyday financial decisions.