Last week the Federal Reserve Bank released new data showing that consumer debt grew in November 2011 by the swiftest rate since November 2001. Just when you thought it was safe to go back into the water! The statistic doesn't include unemployed people since, by definition, they cannot save. The savings rate in America had been creeping up since the beginning or our current recession, so what just happened?

Increased Debt And The Economy

When shoppers go out and start spending and they spend more than they make, the way they usually cover the gap is to increase their debt, so their credit card balance increases. If they get carried away, this increase can be substantial. The silver lining to this increased debt is the boost it gives to the economy, especially at times like the holiday season when people spend more

What we're really talking about here when people start spending more, especially when they load up on more debt, it means they're more confident. This increased confidence means they're not as concerned about losing their jobs and as that feeling spreads, we begin to see a spiraling effect as more and more people begin to shop more and more. However, this increased spending may simply by a seasonal blip.

That said, in a few months this may become problematic for the banks. Usually in April or May, shoppers begin to struggle to pay their credit card bills from all those charges they racked up during the holiday season and begin to pay late on their credit card, or stop paying altogether.

How Much Has Debt Gone Up?

The report from the Federal Reserve showed an 8.5% increase in revolving debt, basically the credit card debt. Thanksgiving  this year was early enough that Cyber Monday was in November, so that put another huge selling day in the month, spiking the sales numbers even more.

Non-revolving debt, which includes car loans and student loans, went up almost 11% too -- the highest increase since February 2005. If we combine the two kinds, revolving and non-revolving debt, we see that total debt increased 10%.

How To Keep Your Debt From Escalating

If you spend more than you make, the only way to cover the shortfall is to either sell something (like in a garage sale) or go (deeper) into debt. The problem is, most people don't even realize their debt is increasing from month to month. All they look at is the minimum due on their credit card and think that's all they need to worry about, if they worry at all. Eventually they'll get to the limit on their card, and they won't be able to charge anymore on their card. Then where will they be?

If they knew their Liquid Number they'd see it was be negative, which means they owe more than what they have. Your Liquid Number is the easy way to know exactly where you stand. By managing their Liquid Number and making sure it is increasing every month they could climb out of debt. Its possible to start living a life free of money worries if you know you have an emergency fund they can fall back on in times of hardship and you don't owe people.

Has your debt surprised you by increasing while you weren't paying attention?