The New York Federal Reserve 's Flow Of Funds Essay

The New York Federal Reserve 's Flow Of Funds Essay

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“Good evening, did you find everything alright today?”
“I sure did, along with some extra items.”
“I think that happens to all customers; your total today will be $911.01.”
“I seem to spend more each time I visit. Anyway, charge my credit card please.”
Only a single purchase of this magnitude is necessary to ignite the burden of debt. The recession served as an opportunity to appease debt and become financially organized. However, data from the Federal Reserve’s Flow of Funds shows a drastic revival of debt amongst consumers. In fact, consumer debt has surpassed $3 trillion and is still rising (Schrager). This accumulation is not the direct outcome of irresponsible spending, but the escalation in the cost of living too. NerdWallet, a provider of financial comparison tools, analyzed data from the New York Federal Reserve and the U.S. Census Bureau and some others, to determine a 29 percent increase in the cost of living since 2003. This is compelling to the mere 26 percent growth of household income. And to account for that escalation, consumers have resorted to credit cards. Overcoming debt is a daunting task, but solutions do exist. Sean McQuay, the credit card expert of NerdWallet, says, “Understanding debt and its underlying causes is key to our future victories over debt” (Issa). A few of the several resolutions to debt include refinancing, reduced spending, and establishing a budget. Consumer debt-now consisting of auto loans, college tuition, credit cards, and mortgage loans-is becoming a threat to society once again, but one particular solution proves to be productive.
Before the causes and resolutions are discussed, debt must be understood. Terry Herman, a financial advisor for Edward Jones, expresses this definitio...

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...ns to mask the overall cost. But, the occurring interest throughout their time in school leaves students in a strenuous position. Three types of students tend to be affected most, graduate, for-profit, and dropouts. Graduate students are permitted to borrow unlimited amounts money not exceeding their cost of attendance. These students accounted for 65 percent of graduates who borrowed $50K or more in 2012. The for-profit students are independent of their parents or pursuing a degree greater than four years. For-profit students only constitute nine percent of degree recipients. Dropouts include 59 percent of the students with low debt. Because dropouts have a laborious experience job-hunting, they are less likely to repay their loans (“Heaviest Debt”). While attending college can prove to be prosperous, the debt of student loans is becoming a danger to young consumers.

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