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Social [CNBC] Average US Household Debt $90k, Average Net Worth $749k, Median NW $122k

Maiden Voyage

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“While a debt-free lifestyle might seem enviable, the reality is that most Americans carry some sort of debt and that's not necessarily a bad thing. In 2019, credit bureau Experian reported the average total debt per consumer (including mortgages) was $90,460, which outpaced the average annual income of $50,413.
If that sounds alarming, remember there's more to someone's financial situation than just their debt and income. Another key figure to look at is net worth, or the total value of your assets minus your debt.
Experian doesn't include net worth in its 2019 report, but CNBC Select took a look at the Fed's latest Survey of Consumer Finances and learned the the overall average net worth of U.S. households is $748,800.
But $748,000 is not truly representative of how much wealth most everyday Americans have to their name — it's too high. The most affluent households in the U.S. skew the proportions, resulting in an average that's well above most people's realities. A better indicator is the overall median net worth of U.S. households, which is $121,700.

Net worth varies widely based on a person's circumstances, such as your income, cost of living, family inheritances, race or ethnicity, housing status (renter or buyer) and educational background. Here's a breakdown of both average and median American net worth by age, according to the Fed:

How to calculate net worth
Net worth simply looks at the difference between what you owe on your current debt balances and the value of your owned assets.
Your debt is referred to as your liabilities. It includes credit card debt, student loans and any outstanding balances on your mortgage(s) and/or installment loans.
Your assets include the cash in your bank/investment accounts, the equity you own in properties and other belongings with cash value.
To calculate your net worth, add up your total assets, then subtract your liabilities.

Assets - liabilities = net worth

You can also use a net worth calculator to plug in your numbers. There are plenty of free options available online.
Platforms such as Personal Capital and Mint make it even easier by giving you the option to link all of your accounts, including checking, savings, money markets, CDs and retirement accounts. That way, you can see all your assets in one place (and monitor how balances go up and down). You can also add any credit cards and/or loans you have so that you have an up-to-date snapshot of your liabilities (what you still owe) as well.
Need some help not spending your savings? CDs can be a good option for savers who need an incentive not to touch their funds. We recommend the CFG Community Bank CD for one-year savings goals and the Ally Bank High Yield CD for when you feel comfortable setting the money aside for five years.
Why is net worth important?
Net worth is a good barometer of your ever-changing financial situation because it shows you a big-picture view of the tangible assets you have in your name, compared to the cash you still owe. While keeping a monthly budget and tracking your daily expenses is just as important, checking net worth every few months helps you make sure your hard work is moving you toward your goals, not against yourself.
For instance, if you have $5,000 in savings but have a credit card balance of $4,000 that is costing $140 in interest every month, you might not notice how this balance is cutting into your overall net worth when you're only making the minimum payments. But by tracking the growing balance compared to your other assets, you'll notice a dip in your net worth if the balance balloons too high.

Net worth is also helpful when assessing whether your money is working for your lifestyle. You may have heard of being "cash poor," which means that your money is all tied up into non-cash assets, like a house. So while your net worth might be well above $200,000, you still struggle to pay your monthly bills. If that's the case, you might consider refinancing to free up some cash for everyday living expenses, even if it means paying off your mortgage a little slower.

Who should think about net worth?
Net worth is important at any age because it helps you decide how much risk you're willing to take on. That could mean deciding whether to borrow additional money to buy more assets, or if it's worth going into debt for a college degree.
Your net worth also should inform the kinds of insurance products you choose and how to plan for your estate. If passing on property, cash and other assets to your heirs is important to you, know that this will be challenging if your debt outweighs your assets.
And if you're not ready to think about estate planning, knowing your net worth can help you decide the value of your life insurance policies (if you still have debt to pay off), as well how much your disability insurance covers in the event you lose income and are still paying off debt like a mortgage.

Bottom line
When used hand-in-hand with other financial measurements, such as your credit score and income, monitoring your net worth can help you feel in charge of your money — and not the other way around.”
 

Maiden Voyage

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I’m curious how these numbers look a year out from Covid concerns/lockdowns being lifted. I suspect some areas will have had much more severe consequences than others. Hard to say for certain with how tightly interwoven the economy is with the largest multi national companies.
 
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Papa

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$749k average household net worth seems extremely unrealistic to me, but if the millionaires raise the average that much then wow

It’s because the ultra rich skew the distribution very far to the left. The average is not a good metric for anything other than a normal distribution. The median is far more suitable for heavily skewed distributions like this because it is immune to outliers.
 

ManofOne

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Average is never a good determination. Median is better as it get rid of outliers. The median income debt is lower but the gap between income and debt is wider.

Household disposable savings increased to highest it’s ever been for incomes below $150,000 per annum.

also the debt figures are also skewed. Interest bearing debt varies on a spectrum and can be refinanced. % change in Bad debt is a better metric to determine how Worst of households are.
 
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The IMF will take all of your assets as collateral for wiping out all of your debt in a program that will be introduced in 2021/2022 called "The World Debt Reset".
 
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ManofOne

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So median household income at the end of 2019 (not seasonally adjusted) was around 70,000 and it rose the fastest in 4 years since trump took office.
 

MetalAlien

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They are counting your home? Seems a bit unfair. Take away the home debt and let's see what the average is.
 

diffusionx

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They are counting your home? Seems a bit unfair. Take away the home debt and let's see what the average is.
That's the most amount of debt most people have though. Average CC debt is only around $6000 or so... or it was last year it's probably much more now.
 
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Paltheos

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It’s because the ultra rich skew the distribution very far to the left. The average is not a good metric for anything other than a normal distribution. The median is far more suitable for heavily skewed distributions like this because it is immune to outliers.

Interquartile average is even better imo, but median is the term that everyone knows (and is pithier).
 
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Super Mario

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They are counting your home? Seems a bit unfair. Take away the home debt and let's see what the average is.

Of course they are counting your home. "They" are also hoping that the average person doesn't even get that far into the details. Just read this, and see how much of a victim you are. Average and median net worth (not actual money in your hand) are way off, signaling the rich have stolen your money.
 
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MetalAlien

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Of course they are counting your home. "They" are also hoping that the average person doesn't even get that far into the details. Just read this, and see how much of a victim you are. Average and median net worth (not actual money in your hand) are way off, signaling the rich have stolen your money.
Yea it's like equity doesn't exist...LOL Your house is an investment unless you are upside down.
 
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ManofOne

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Yea it's like equity doesn't exist...LOL Your house is an investment unless you are upside down.

Net Worth is different from income. The only debt they would count as it applies to your house are instance where you use your home as collateral i.e mortgages etc.

Surprisingly some households DO have negative net worth but the median is net positive if I recalled.
 
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Kenpachii

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How do you even consider a mortgage debt to start with. I would only consider it debt if the house worth is less then what i own the bank.
 
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GoodFriend

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all of these people are living out of their means and deserve to suffer.

if you need a mortgage to buy a house you are living outside your means. you realize that right? no sympathy here
 
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How do you even consider a mortgage debt to start with. I would only consider it debt if the house worth is less then what i own the bank.
The definition of debt is money you owe. You owe a mortgage. Therefore it is debt.

What you are talking about is the equity in your house, or the portion of its value you actually own. This is calculated as value of house minus amount still owed on your mortgage.
 
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A home is often the biggest asset people own. Makes since to consider it.
For the purposes of net worth, the calculation is always assets minus liabilities, so your consideration of this is just your home equity anyways, not the full value of your home unless you own it outright.