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Adept at Debt

debtsWhen it comes to balancing mortgage obligations with credit card debt and college loans, Michiganders are doing a bang-up job, so says a new study by Credible of 540,000 homeowners, renters, and people living with their parents.

Wolverine State residents shell out just 25.3 percent of their monthly income on housing payments, credit card bills, and student loans, reveals the study, which sought out the states where people are best (and, flip-side, worst) at dealing with debt. Arkansas, Delaware, Kentucky, and Missouri round out the top five states boasting the lowest debt-to-income ratios in the nation, the study says.

The five states with the dubious distinction of highest average debt-to-income ratio are Hawaii, Washington, Colorado, Oregon, and Montana, the study notes. On average, those who hail from the Aloha State drop 36.2 percent of their monthly paychecks on housing, credit card, and student loan payments—the highest percentage in the country and over 43 percent more than Michigan citizens ante up each month.

Why are some states seemingly more skilled at managing their debts than others? The answer, Credible contends, isn’t so cut and dried.

Again using Michigan as a case-in-point, cost of living plays a crucial role. Low average monthly housing obligations relative to average income (coupled with lower-than-average credit card and student loan payments) propel that state up the list, the study says.

Be that as it may, some states charted in a lower rung because of especially high mortgage, credit card, or student loan payments, Credible reports. Hawaiians, for instance, pay the fourth-highest amount on housing costs and second-highest total on monthly credit card bills but don’t earn enough average income to cover all those costs.

To wit, the 540,000 individuals included in the dataset had an average monthly house payment of $906, in addition to an average credit card payment of $207 and an average student loan payment of $370. Their average annual take-home salary: $60,671. Almost 19 percent of the analyzed group had one or more mortgages. Of that segment, the average housing payment nearly doubled to $1,705.

Check out the entire study to see how your state fared.

About Author: Alison Rich

Alison Rich has a long-time tenure in the writing and editing realm, touting an impressive body of work that has been featured in local and national consumer and trade publications spanning industries and audiences. She has worked for DS News and MReport magazines—both in print and online—since they launched.
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