Back to School - or Back in Debt
Parents are panicking about this school year for two very different reasons, a Debt.com survey finds
FORT LAUDERDALE, Fla., Aug. 19, 2020 /PRNewswire/ -- A Debt.com survey on the emotional and financial impact of children returning to classrooms shows that parents are worried about their children getting sick, but they are also fearful about their financial situation.
The largest disparity in the data from the nearly 600 parents comes from the response to this question: "How worried are you about the health of your child or children if they go back to school?" Less than 1 in 10 (9.35 percent) said they're "not worried at all" while 50 percent said they are "very worried."
Other findings:
- Almost 65 percent students will have a parent remaining at home with them.
- Fifty-four percent expect to lose anywhere from 11 to over 51 percent of their household income.
- Less than 4 percent will use daycare. The rest will require at-home supervision.
"In three decades as a CPA and financial adviser, I know the most expensive and emotional decisions are about our children," says Debt.com chairman Howard Dvorkin, CPA. "Last year, before the pandemic, the average American family was carrying $137,000 in debt. Although that includes mortgages it also includes over $5,000 in credit card debt."
That credit card debt is significant for two reasons. First, interest rates on monthly balances are hovering around 20 percent. Second, if parents lose income to stay home with their children, they're likely to bridge the gap with credit cards.
"That means these parents will pay one dollar in interest for every five they charge," Dvorkin warns. "Credit cards are the most stubborn debt to overcome, not only because of those steep interest rates but because they're so easy to use. It might take these parents years to climb out of that debt – if they ever do."
Methodology
Debt.com survey of 1,326 people, with 590 people being parents of children in elementary, middle, or high school. The survey was fielded July 22-August 6, 2020. More than 63 percent of respondents are married, 24 percent are single, 8 percent are co-parenting and 4 percent identified as other.
About: Debt.com is the consumer website where people can find help with credit card debt, student loan debt, tax debt, credit repair, and more. Debt.com works with vetted and certified providers that give the best advice and solutions for consumers 'when life happens.'
SOURCE Debt.com
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