Consumers in the U.S. are still in financial distress, but their overall financial situation seems to be improving. The CredAbility Consumer Distress Index tracks the financial condition of the average U.S. household each quarter. CredAbility, a nonprofit credit counseling firm, measured employment, housing, credit, how households manage budgets and net worth.
Index score rises
U.S. households had a score of 68.1 on a 100-point scale in the first quarter of 2011, which was up from 67.2 the previous quarter. It was the highest score since the financial crisis escalated in the third period of 2008. A score below 70 indicates that households are experiencing financial distress.
However, many consumers are getting their acts together and improving their finances. For instance, many people are doing better at managing their household budgets. They also are showing some improvement in debt management, reflected in the fact that there were fewer bankruptcy filings, which fell 6 percent from the year-earlier quarter.
“The good news is that the full-time labor force grew by more than 540,000 people in the first quarter and consumers with stable incomes have a handle on their credit and household budgets,” said Mark Cole, chief operating officer for CredAbility and author of the report. “While the housing category continues to deteriorate, a gain of four points in the index during the past five quarters indicates that the majority of consumers are on the right track.”
Distressed southern states
Some areas of the country fared better than others. North Dakota (82.35) and South Dakota (81.23) were the states with the highest individual scores. Overall those two states have not been hit as hard by the economic crisis as some other parts of the country. Six states in the Southeast were among the 10 most distressed states in the country.
Help for your household
If you find yourself feeling overly stressed by credit card debt and other bills, it may be time to get help with debt. Consider finding a reputable debt counseling firm to work with you to better manage your household budget.
Chris Rocks is the Regional Director of the National Credit Federation (NCF). NCF is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score.
Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management.
He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others.
He can be contacted by visiting his personal site, GoodCreditLiving.com.
Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to rein in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.
Karen Lawson is a freelance writer with more than 15 years of experience working in mortgage banking and loan servicing. She holds BA and MA degrees in English from the University of Nevada, Reno. She enjoys writing informative articles about debt management and personal finance.