Income Is Rising, but More of It Is Going Toward Debt
Set a budget before shopping or borrowing
Shanti
10/16/20261 min read
Income Is Rising, but More of It Is Going Toward Debt
A new study shows that rising incomes have not improved many American families’ purchasing power as much as they might expect.
From late 2022 to early 2026, the average household’s real monthly take-home income increased by about $109. But monthly debt payments rose by $57. That means a one-earner household spends about 52 cents of every additional dollar of income on debt payments.
After adjusting for inflation, debt payments rose nearly 15%, while household income increased by less than 2%. The study included credit card debt, auto loans, student loans, and home equity lines of credit, but it did not include mortgage payments.
To avoid taking on more debt, set a budget before shopping or borrowing, compare prices, and consider the total cost and repayment period of any loan.
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