Are you living beyond your means?
A report recently released by the U.S. Census Bureau paints a mixed picture when it comes to household debt in the U.S. On the positive side, the percentage of households holding some form of debt declined between 2000 and 2011 - from 74 percent to 69 percent. On the negative side the median amount of household debt increased during this period - from $50,971 to $70,000 (in 2011 constant dollars). Some experts say this could be a sign that many Americans are feeling more optimistic about their finances as economic conditions slowly improve, so they are willing to assume more debt.
But should they be? Another Census Bureau study that measured household wealth in the U.S. over the same period determined that median net worth excluding home equity showed no statistically significant change between 2000 and 2005, but decreased by 18 percent between 2005 and 2011.
Given these statistics, it may be wise to think about whether you might be living beyond your means. Here are five questions to ask yourself that could help you determine if this is the case:
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