Monday, June 8, 2009

Upper Class...Middle Class...Lower Class...Debt?

I read an interesting article today which talked about how debt has virtually become a new socioeconomic class. The article focused on the 40% mark. This means that if your debt (mortgage, car payment, credit cards, etc.) is taking up 40% or more of your gross income, the Federal Reserve considers it a "compelling indicator of distress" in your finances.

Basically, in today's financial state, income is becoming less important when compared to the amount of money you owe. A lot of those who were able to afford certain luxuries may now realize they bit off more than the instability of the economic recession would let them chew.

Click here to read the article, very interesting stuff.


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