Definition
Money owed by individuals for personal, family, or household expenses, like credit card balances or personal loans.
What to consider
- Be conscious of accumulating debt from everyday spending.
- Review your balances regularly to catch overspending early.
- Reducing consumer debt can free up money for savings and investments.
Real world scenarios
- Brenda finds herself juggling multiple store cards and a personal loan. She decides to focus on paying off these consumer debts before taking on any new financial commitments.
- Terry consolidates his credit card balances into one account with a lower interest rate, making repayments more manageable. This approach reduces monthly stress and simplifies tracking.
- Hoping to prevent consumer debt from spiraling, Deena sets a strict spending limit on her credit card. She pays the balance in full each month to avoid accumulating interest.
Related terms
Related Playbooks
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