Nearly a third of us have no savings. A fifth have some money socked away but it wouldn't stretch three months. About a quarter owe more on credit cards than they have in savings.
Eight in 10 have some personal debt.
Years after the official end of the Great Recession, Americans remain buried under a mountain of consumer debt that is shutting some people out of the modern economy and causing credit woes for others that could take years and even decades to overcome.
Borrowing allows Americans to purchase homes, college educations, Fords and furnishings. Having access to it helps us live our dreams. But decades of wage stagnation and a deep recession that spelled the demise of many middle-class jobs -- along with some spendthrift ways -- have pushed many Americans into an economic quicksand.
"In our society you cannot live without a credit card or getting some type of credit," said Jackie Cummings Koski, who conducts personal money management workshops and authored a prize-winning book on financial literacy. "When you get a house, you're going to need to get a loan. When you get a car, you're probably going to need to get a loan. When you rent a car or get a hotel, you're going to need a credit card."
Getting those loans -- and credit cards -- got tougher after the housing crisis, as financial institutions tightened borrowing rules. The economy improved and so did the household debt numbers, down 6.5 percent from its late 2008 peak. But borrowing is inching up again as consumers take out more home equity, auto and student loans, and reach again for the plastic.
The result for some -- a poor credit history -- can have long-lasting consequences.
"Credit scores can influence job searches, renting houses or apartments; obviously getting loans -- loans at low interest rates -- is another impact of having large amounts of debt," said Katie Bryan, a spokeswoman for America Saves.
Debt levels started to increase from the 1990s all the way through to the present with peaks and valleys along the way, according to Bill Staler, CEO of Lifespan, a Hamilton-based non-profit with multiple programs for southwest Ohio residents in various human service areas, including financial counseling.
During the Great Recession, people pulled back from running up credit and paid back debt, some of them forcibly through bankruptcy or foreclosure, but consumers are starting to spend more and get back to their old ways.
"There's good debt and bad debt," Staler said. "If you're going to buy a house, the only way to do it, for most people, it to take out a mortgage. That makes sense. But when you do get overextended and take on high-cost debt then you could potentially get into trouble really quickly."
Few people spend the money "willy nilly" by going on spending sprees. Most who overextend themselves beyond day-to-day living expenses end up doing so when an unforeseen life event expense rears its ugly head in the form of costs associated with divorce, medical issues, job loss or salary reduction.
Staler said those in the financial counseling industry can truly help people when they don't wait too long to ask for advice.
"For whatever reason, whether it's feeling they can handle it on their own, feeling its embarrassing or whatever, we usually see people who are in crisis," he said. "Our options are dramatically reduced when people come in and they're in crisis. If people would come in when things don't start to feel right, then we can probably help a lot more."
Those who feel they are getting into trouble shouldn't wait until it worsens before asking for help.
"When we get a cut on our arm, we don't hesitate to go to a doctor to fix that. It's the same thing here. You don't expect yourself to have the knowledge of fixing medical issue, why would you expect yourself to have the knowledge to fix financial issues."
A major and largely unaddressed part of them problem is that many people need a great deal of education when it comes to their finances, Staler said.
"To me, there's an issue of financial literacy that needs to be addressed and that would go a long way in having people take advantage of the resources that are out there before they're in crisis," he said.
Staler said he is amazed at how many people do not understand how credit cards work.
"Credit cards are a very useful, too, but it's like any tool," he said. "You've got to understand how it works. You wouldn't use a hammer to saw a piece of wood in two and you wouldn't use a saw to hammer a nail. You've got to use the right tool in the right situation. Many people don't understand how that credit card tool works."
His advice? "Understand how it works. Understand the good things and the bad things about credit card use so you don't fall prey to buying things you don't need or potentially running up the balance to a point where it does become a problem to you."
When it comes to consumer debt, the numbers are staggering: American households with debt owe an average of $15,863 on credit cards, $156,584 on mortgages, and $33,090 on student loans, according to a July NerdWallet analysis of government statistics. Home equity lines of credit, auto loans and others bring the total owed creditors to $11.85 trillion, according to the Federal Reserve Bank of New York.
Mortgages account for 69 percent of that household debt total.
One of the reasons so many Americans are saddled with bad debt is the recovery has come with a giant asterisk.
The country lost 8.7 million jobs during the fallout of the 2007-2009 Great Recession. Federal labor statistics show those jobs were recovered by May of 2014. But pay for the new jobs didn't measure up to the ones lost. According to the National Employment Law Project, 44 percent of newly created jobs are in low-wage sectors.
Overspending is another major debt factor, experts say.
"People tend to use plastic to subsidize their income," said Tim Brandon, education and marketing coordinator at Graceworks Lutheran Services Consumer Credit Counseling Services in Dayton. "People who lose their jobs are convinced that another job is right around the corner. When you go back to another job, chances are you are back into a starter position. You're really not going to have the income and you've already run up all this debt on a credit card to try to keep your lifestyle the same.
"You're in trouble."
Due to lack of savings, about 40 percent of low and middle-income earners who carried credit card balances for more than three months used the cards for basic necessities like housing, food and utilities, according to a 2012 survey by Demos, a public policy organization.
Chris Roark of Middletown is like a lot of Americans: Choices made more than a decade ago continue to haunt.
Roark, now 36, said it began with a car loan co-signed by his father when he was 16. He paid off the loan after he turned 18 but couldn't resist the credit offerings that began rolling in.
Soon, he lost his job as a waiter and got kicked out of his parents' house. He checked into the Middletown Fairfield Inn for an extended stay, using his credit cards as if they were cash.
"I could have used (credit) to be highly successful but it ended up having the opposite effect. It literally destroyed my credit before I had the chance," said Roark, who racked up $12,000 on the cards in just 30 days.
"I'd like to say it was because I had to, but that would be a complete lie," he said. "It was because I had no concept of the value of money."
Roark, a married father of five girls and a boy, now works as a restaurant cook and is studying business information technology at Cincinnati State.
Years removed from his spending spree, Roark says he's never fully recovered financially.
"I thought I had the whole world figured out and then every year after I realized how wrong I was," he said.
'We generally overspend'
About 60 percent of Americans in a 2014 Harris Poll gave themselves an "A" or "B" grade in their knowledge of personal finance.
One local expert says those grades are inflated.
Americans actually deserve a "C" grade when it comes to financial literacy, said D.R. Fannin, director of the Center for Economic Education at Wright State University's Raj Soin School of Business.
"We generally overspend. Conspicuous consumption is the name of the game," said Fannin, who also teaches economics to undergraduates.
Almost a quarter of Americans owe more on their credit cards than they have in savings, according to a Bankrate Financial Security Index survey taken earlier this year. Four in five have at least some consumer debt.
"Credit cards are not necessarily an evil thing if used correctly. In fact you can get some that earn rewards," Fannin said. "The problem is when you can't pay it off and you've made charges to a credit card. Some of the interest rates can be exorbitant -- up to 29 percent or more."
Jason Yu, 29, of Englewood knows well the pain of high interest rates compounded on high credit card balances. He did the math on one maxed-out card with a 29.99 percent rate to discover he was paying $300 each month in interest alone.
In 2011, Yu had six cards maxed out to the tune of a "mind-boggling" $34,000.
Like many young people, Yu was introduced to credit cards when he enrolled in college. He started at Wright State University but quit in 2005. He next found work as a low-wage security guard.
"Some guy making $8.50 (an hour) with that much access to credit is pretty dangerous," said Yu. "And it turned out really dangerous to me."
Yu became a billboard for bad decision-making.
"I was a bachelor going out six or seven days a week partying with my friends. It just added up so fast. All the bars in Englewood, they knew me," he said. "And I was really generous when I was drunk. I was paying people's tabs."
He also made irrational purchases, including a top-of-the-line gun safe that he bought on credit.
"I didn't even own a gun," he said.
He paid more than $4,000 for the gun safe and later sold it on eBay, taking a $2,000 loss not counting the interest accrued on his credit card.
After the creditors started calling, Yu let his voice mail box fill up so he didn't have to hear one more collector. Citibank threatened court action.
He sought help at Graceworks' Consumer Credit Counseling office in Dayton. The non-profit also has an office in Springfield and will accept clients from other area counties.
Fortunately for Yu, who is now a production associate in a tool-and-die coating shop, he avoided serious legal consequences. He is paying dearly for his mistakes, though, as he must remit more than $650 a month to the service that consolidated his debt and negotiated some of his interest rates down to pay off creditors.
A civil judgment like the one Yu was threatened with can blemish a credit score for at least seven years, Fannin said.
"If you've been involved with a lawsuit, you lost, and you didn't make good on it and pay, that will hit your credit report," Fannin said. "It could drop it as much as 100 points. So not a good thing."
No magic wand
Financial advisers say there are only two ways out of personal debt and one -- increasing income -- isn't an option for most debtors.
"There is no magic wand. You either have to increase your income or you have to decrease your expenses. It's that simple," said Graceworks' Brandon, who has also worked for a credit union and a major credit card company.
The pressure of being in financial arrears can cause problems at home and work, said Bryan of America Saves, a campaign by the Consumer Federation of America to work with people to get out of debt and avoid turning to predatory payday lenders in a crisis.
"Those who are in debt are constantly worrying about their money," she said. "They're worse employees. They're usually worse family members because they are always fretting and always worried about these debts they have. I think it has more of an effect on the psyche than people imagine."
Roark, of Middletown, believes his life could have been "completely different" if he'd been eased, or stair-stepped, into the world of credit.
"I never have mentally recuperated from those bad financial decisions, for not only fear of rejection, but fear of my own ability to responsibly care for it," he said.
Caroline and Zac Peck of Springfield know the emotional toll firsthand.
Sometimes they would argue for no apparent reason.
"We wouldn't really talk and then three weeks later we would get into this huge fight about nothing," Caroline said.
"There would be just stress about everything," Zac said.Added Zac: "It would be a fight over bread. Really nothing. Absolutely nothing,"
The Pecks -- Caroline, 34, and Zac, 27 -- laugh about the stress-induced bickering now, but many of their bills are still unpaid, including the one for Zac's October trip to the emergency room at Springfield Regional Medical Center after he fell ill at work.
A months-long lapse of Zac's employment while he had surgery and recovered from an aortic aneurysm put the family in a financial free fall. Disability payments never materialized and the blended family with three children put plans on hold to buy a house while they focused instead on keeping the utilities to their rental house from being shut off.
The two married in May 2014 in a low-key ceremony five months before Zac was diagnosed.
"We were in a good place and headed towards the dream most people have. And we worked hard for it. We were paying off bills and doing things to up our credit," Zac said. "We had a game plan. Then the bottom fell out."
Caroline continued to work as a medical lab technician in Columbus and Zac returned to his welding job in February at the same pay. Their combined income -- when working -- is comfortably above the 2014 U.S. median household income of $51,939, yet their financial outlook is hardly comfortable.
They're constantly shuffling payments and putting off creditors.
"It's essentially robbing Peter to pay Paul and still being broke at the end of it," Zac said.
The Pecks estimate they owe $8,000 to $10,000 in out-of-pocket medical expenses and another $7,500 on a couple of maxed-out credit cards and a loan. They're trying to regain their footing by paying off what they can and purchasing only necessities -- in cash.
The greatest frustration is working with utility companies, Caroline said. Late fees alone added hundreds to what they already owed.
"Right now the rough plan is getting the utilities down to where they're supposed to be," Caroline said. "So instead of paying $600 a month for utilities we're paying $200 a month like we used to."
The two never considered bankruptcy. Medical bills, even for those with insurance, were the cause of 60 percent of personal bankruptcies in 2013, according to NerdWallet Health.
The Pecks can't fathom when they'll climb out of the hole, but they're slowly plotting a future. Both are in school part time at Clark State Community College hoping to broaden employment opportunities. Caroline, who already holds an associate's degree, is studying medical office administration. Zac is embarking on a degree in mechanical engineering.
They've taken out student loans for their educations -- another monumental chunk of Americans' debt, totaling $1.19 trillion as of June 30. The average 2015 college graduate with student loan debt will owe more than $35,000 according to Edvisors.
Zac doesn't have to look far to find others like him.
"There's 50 people on the shop floor and maybe one person isn't in debt," he said of his workplace. "Everybody else is paycheck to paycheck."
Debt problems and bad credit can be conquered, as Leah Staggs has proven. She emerged from debt -- scarred, but now in the best financial shape of her life.
After two marriages ended, Staggs was a single mother providing for three daughters -- and saddled with $10,000 in credit card bills she couldn't pay.
"Through my 20s it just seemed like I let it hang over my head," said Staggs, now 38.
At times she felt harassed by debt collectors. "When they are calling every day it can be really depressing. You want to pay them, but you don't have anything left over," she said. "You've got three kids at home and your water comes first and your electric comes first and food on the table."
She wanted to buy a house -- an impossibility with her credit score -- so she sought help at Community Action Partnership and enrolled in a program that teaches financial literacy, helps repair credit, and walks a person through the home purchase process.
Her success would hinge on the ability to find and maintain a good-paying full-time job, which she's had as a legal assistant, now with the same Miamisburg firm for four years.
It might be counter intuitive, but once a person gets their bills paid they need to acquire some debt to increase their credit score, Staggs said.
"That's not what I wanted to do after getting it all cleared off. I didn't want any more credit cards," she said. "But then you have to have good credit on there too to be able to get home loans, car loans."
It took her more than seven years, but Staggs finished the program, repaired her credit and is the proud owner of a home in Farmersville.
"When I got the key to my house I was so thrilled," she said. "It was a long, hard haul to get there."
Chris Stewart is a reporter for the Journal-News, Hamilton, Ohio (TNS)