For many households, paying down debt was among the top priorities last year and that trend is expected to continue well into 2011.
Historically, when there is an economic downturn and employment uncertainty is on the rise, employed households' first reaction is to build precautionary savings, according to Dave Colby, chief economist of CUNA Mutual Group. This occurred in 2001 to 2002 and again in 2008 to 2009.
"But, households are rational and saw the best course of action for their overall financial health was to pay off debt. This is evidenced by the loan versus savings rate differentials," Colby said.
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