Meridian Star

New Today

October 7, 2013

Families hoard cash 5 years after crisis

(Continued)

NEW YORK —

The crisis also taught them about the dangers of debt.

After the crisis hit, Jerry and Madeleine Bosco of Tujunga, Calif., found themselves facing $30,000 in credit card bills with no easy way to pay the debt off. So they sold stocks, threw most of their cards in the trash, and stopped eating out and taking vacations.

Today, most of the debt is gone, but the lusher life of the boom years is a distant memory. "We had credit cards and we didn't worry about a thing," says Madeleine, 55.

In the U.S., debt per adult soared 54 percent in the five years before the crisis. Then it plunged, down 12 percent in 4 ½ years, although most of that resulted from people defaulting on loans. In the U.K., debt per adult fell a modest 2 percent, but it had jumped 59 percent before the crisis.

Even Japanese and Germans, who weren't big borrowers in the years before the crisis, cut debt — 4 percent and 1 percent, respectively.

"We don't want to take out a loan," says Maria Schoenberg, 45, of Frankfurt, Germany, explaining why she and her husband, a rheumatologist, decided to rent after a recent move instead of borrowing to buy. "We're terrified of doing that."

Such attitudes are rife when it has rarely been cheaper to borrow around the world.

"A whole new generation of adults has come of age in a time of diminished expectations," says Mark Vitner, a senior economist at Wells Fargo, the fourth-largest U.S. bank. "They're not likely to take on debt like those before them."

Or spend as much.

After adjusting for inflation, Americans increased their spending in the five years after the crisis at one-quarter the rate before the crisis, according to PricewaterhouseCoopers. French spending barely budged. In the U.K., spending dropped. The British spent 3 percent less last year than they did five years earlier, in 2007.

Text Only
New Today
Biz Marquee
New Today
Poll

Do you think the city of Meridian should aggressively enforce the city's code enforcement laws on litter, abandoned homes and overgrown lots by issuing tickets and stiff fines?

Yes
No
     View Results
Facebook
Facebook
Twitter Updates
Follow us on twitter
AP Video
Netanyahu Vows to Destroy Hamas Tunnels Obama Slams Republicans Over Lawsuit House Leaders Trade Blame for Inaction Malaysian PM: Stop Fighting in Ukraine Cantor Warns of Instability, Terror in Farewell Ravens' Ray Rice: 'I Made a Huge Mistake' Florida Panther Rebound Upsets Ranchers Small Plane Crash in San Diego Parking Lot Busy Franco's Not Afraid of Overexposure Fighting Blocks Access to Ukraine Crash Site Dangerous Bacteria Kills One in Florida Workers Dig for Survivors After India Landslide Texas Scientists Study Ebola Virus Smartphone Powered Paper Plane Debuts at Airshow Southern Accent Reduction Class Cancelled in TN
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide