Some states are experiencing more personal debt than others, from high mortgage rates to a higher cost of living to low employment rates and poor education. We take a look at the 18 states with the highest levels of personal debt and look at ideas to combat it:
Maryland: $98,152
Maryland ranks high in national cost-of-living surveys, particularly housing, transportation, and education. This means residents need higher incomes to cover basic expenses, potentially leading them to rely on credit for additional needs.
Colorado: $93,450
Colorado’s housing market is costly, often exceeding national averages. This significantly strains household budgets and contributes to the mortgage debt burden. Policies and programs increasing affordable housing options, particularly for moderate and low-income residents, can alleviate the housing cost burden and reduce reliance on debt.
Alaska: $93,299
Alaska’s remote location and harsh climate lead to higher costs for essential goods and services, including food, transportation, and housing. The state’s economy heavily relies on resource extraction, leading to boom-and-bust cycles that affect employment and financial stability. Supporting industries beyond resource extraction can offer more stable income sources and contribute to economic resilience.
Nevada: $92,150
Nevada, particularly Las Vegas, has a higher cost of living than national averages. This includes housing, transportation, and entertainment expenses, putting pressure on residents’ budgets. Programs educating residents on budgeting, responsible credit use, and debt.
California: $91,103
California consistently ranks high in national surveys for cost of living, particularly housing and transportation. Fuel, car insurance, and public transportation costs are higher than average, impacting household budgets. Policies that support higher minimum wages and fair labor practices can improve income levels and enable Californians to pay off debt and afford necessities.
Delaware: $90,525
Like other states, student loan debt plays a significant role, especially for individuals seeking higher education outside Delaware. The state also has a large financial services industry, potentially leading to more accessible access to credit and higher student loan borrowing. Advocating for federal and state-level programs that address student loan debt is the best way to move people out of debt.
Hawaii: $89,706
Housing costs, especially in Honolulu and other urban areas, are significantly higher than national averages. This leads to high mortgage debt for homeowners and makes rent a significant burden for renters. Initiatives promoting affordable housing options, including rent control, zoning laws, and increased affordable housing units, can reduce reliance on debt for housing.
Virginia: $88,114
Virginia ranks relatively high in average mortgage debt, potentially driven by the desire for homeownership and higher housing costs in specific areas. Programs educating residents on budgeting, responsible credit use, and debt management can empower informed financial decisions.
Utah: $87,925
Population growth exceeding the housing construction rate in Utah is driving up housing costs, impacting rent and purchase prices. This can be attributed to migration, growing families, and limited developable land. Responsible development must be focused on balancing economic growth with housing affordability and protecting natural resources to help people out of debt.
Oregon: $87,280
Oregon’s scenic landscapes, outdoor recreation opportunities, and vibrant culture attract residents and tourists, increasing demand for housing, services, and goods, pushing prices up. Increasing public transit and infrastructure efficiency can reduce transportation costs and improve quality of life.
New Hampshire $106,865
While not solely reliant on tourism, it plays a significant role in influencing seasonal income fluctuations and potentially making it challenging for some residents to build financial stability. They support various sectors beyond tourism to create a more balanced and resilient economy, offering a more comprehensive range of income opportunities.
Vermont $90,960
Although not as high as some coastal states, Vermont’s cost of living remains above the national average, particularly for housing. This can pressure residents’ budgets, potentially accumulating debt for necessities like housing and transportation. Actions should be taken to increase financial literacy and ensure families do not take on unnecessary debt.
Maine $87,920
Job opportunities outside major urban centers can be limited, impacting earning potential and making it challenging to service debt. Policies that support higher minimum wages and fair labor practices can improve income levels and enable Mainers to manage debt more effectively.
Washington $180,462
Major Washington cities like Seattle and Bellevue have a significantly higher cost of living than the national average, particularly in housing and transportation. This puts pressure on residents’ budgets and can necessitate borrowing for essentials. Providing accessible debt relief and counseling programs can equip individuals with tools and strategies to manage their debt and seek repayment solutions.
Rhode Island $100,960
Concerns exist about predatory lending practices targeting vulnerable populations and the usual impacts of the cost of living, housing, and high transportation costs. These practices can lead to excessive debt accumulation. Therefore, there are calls for more regulation on companies that allow vulnerable people to get into debt.
New Jersey $111,172
New Jersey ranks high in median home prices and rents, particularly in desirable northern suburbs and near the coast. This significantly strains budgets and leads to higher mortgage debt and potential reliance on other debt for the everyday cost of living. Educational programs that address the impact of debt would be beneficial, as would rent regulation, so landlords do not inflate rental prices.
Arizona $115,963
Arizona’s sunny climate and outdoor recreation opportunities attract retirees and people seeking a warmer lifestyle, increasing demand for housing in an already expensive market. While beneficial for some, Arizona’s lack of a state income tax and lower sales tax than neighboring states lead to less infrastructure and public services revenue, potentially requiring higher individual spending in those areas.
Idaho 120,766
Population growth surpasses housing construction in desirable areas, particularly Boise and surrounding communities. Rising inflation and national supply chain disruptions impact the cost of goods and services across the board, including housing, transportation, and utilities, affecting Idaho. Addressing affordability concerns requires a collaborative effort involving individuals, communities, policymakers, and businesses.
