A recent report by the Certified Financial Planning (CFP) Board reveals that a staggering majority of U.S. households carry some form of debt, primarily credit card and mortgage obligations. Over half of the respondents express significant concern about the long-term impact this debt may have on their financial health. In response, many are adopting proactive measures such as cutting expenses, creating budgets, and exploring ways to boost income.

The survey highlights the prevalence of medical and credit card debts, which pose substantial challenges for those affected. Many individuals with considerable medical or credit card debt struggle to manage their payments, leading to deferred medical treatments and reliance on minimum payments. Despite efforts to reduce debt, concerns about future financial stability persist among a large portion of the population.

Common Forms of Debt and Their Impact on Financial Health

According to the CFP Board's findings, most American households are not strangers to debt. Credit card and mortgage obligations are the most prevalent types, affecting 60% and 57% of respondents respectively. The financial strain from these debts is evident, with more than half of the surveyed population expressing worry over the potential long-term ramifications on their financial well-being.

For those burdened by significant debt, the consequences extend beyond just monthly payments. Medical debt, in particular, has profound effects. Nearly 70% of individuals with substantial medical debt find it challenging to keep up with payments. Consequently, about one-third have postponed necessary medical treatments or procedures due to financial constraints. Additionally, almost half have had to establish repayment plans with healthcare providers. Credit card debt also takes its toll, with half of those with large balances consistently making only minimum payments, further entrenching them in a cycle of debt.

Proactive Measures and Lingering Concerns

Despite the pervasive presence of debt, many Americans are taking steps to address the issue. For the upcoming year, paying down debt ranks high among personal resolutions, with 42% prioritizing debt reduction. A vast majority—nine out of ten—are actively seeking better ways to manage their debt, including reducing expenses and boosting income through various means.

Efforts to combat debt include cutting back on discretionary spending and establishing detailed budgets, actions taken by over 40% of respondents. More than one-third are focusing on increasing their income, whether by negotiating raises, taking on side jobs, or exploring new career opportunities. However, despite these proactive measures, concerns linger. Roughly half of those surveyed worry about how debt could affect their long-term financial stability and disrupt life plans, underscoring the ongoing challenge of managing debt in the face of economic uncertainty.