Many Americans are struggling with their personal finances. In fact, you may know someone who is having trouble living paycheck to paycheck or paying trouble with their expenses.
If you are financially stable, you should have a financial plan, be resourceful, and be well-versed in finance.
Sadly, the majority of Americans lack those abilities. Here is a collection of important figures that demonstrate how serious the problem is.
1. 95% of Milennials are Saving Less than Recommended Amount
In comparison to older generations, millennials have a poorer net wealth-to-income ratio between the ages of 28 and 38. I have some advice for you:
- Don’t strain the standard of living you’ll enjoy as you get closer to your ideal retirement age.
- Keep your retirement age as-is.
- Don’t lower your lifestyle during your retirement years.
- Invest frequently and early.
- Do pay yourself back first.
2. 56% of Americans Can Not Cover a $1,000 Emergency Expense with Savings
Nearly two years after the coronavirus pandemic began, the majority of Americans are still having trouble creating strong savings accounts.
According to Greg McBride, senior vice president and chief financial analyst at Bankrate, “emergency savings and the $1,000 threshold truly are an indication of how much people are hurting, that they are that close to the brink financially.”
3. 35% of Americans have Nothing at all in Savings
A 2016 GOBankingRates survey found that 35% of American adults have only a few hundred dollars and 34% have none in their savings accounts. Only 15% of Americans have more than $10,000 in savings.
4. 66% of Milennials do not have any Savings for Retirement
According to research from the National Institute on Retirement Security, 66 percent of millennials haven’t even begun saving for retirement. However, according to seasoned retirement plan consultants, that mindset will make it harder to enjoy a safe retirement in the future.
5. 72% of Households do not have a Written Financial Plan
Not surprisingly, only 23% of Americans have a formal written retirement plan, 40% have done some planning, but none have been formalized, and 37% have done nothing at all.
6. 83% of people that Set Financial Goals Feel Better About their Finances After Just One Year
When it comes to managing your money, it can be challenging to find inspiration. Although it can be discouraging, once you start setting financial objectives, you’ll start to feel better about your financial status. This has a good compounding effect.
7. 97.5% of Households Are Not Utilizing 529 College Savings Accounts
Any withdrawals from a 529 plan held by a third party are treated as untaxed income, which could reduce your child’s eligibility for grants, work-study opportunities, and subsidized loans.
8. Only 16% of Millennials Are Not Insured
Despite the federal law requiring all Americans to have health insurance, a new survey found that Generation Y is underinsured, with almost one in four millennials not having coverage.
9. 38% of Households Have Revolving Credit Card Debt
By May 2020, revolving credit debt had decreased to $996 billion. At the height of the Great Recession in May 2011, the previous low for revolving debt was $833 billion. Non-revolving installment debt increased in May 2020, reaching $3.117 trillion, which was its second-highest level ever after declining in April.
10. 100 million Americans Have Outstanding Auto Loans
In recent years, Americans went on a tremendous vehicle and truck buying frenzy. Many people borrowed money to pay for their cars. According to information made public this week by the Federal Reserve Bank of New York, a record 107 million Americans are in debt to auto loans. That represents over 43% of the adult population in the US.
11. 44.7 Million Americans Have Outstanding Student Debts
Highlights of the report Currently, 43.4 million people have outstanding student loans, which is an increase of 1.2% over last year (YoY). There are currently 92.8 million Americans who are living with student loan debt.
12. More than 40% of student borrowers aren’t making their payments
There are concerns that more than 40% of student loan borrowers may never pay off their debts because they are either in default, delinquent, or have delayed making payments.
13. Only 24% of Millennials are financially literate.
Numerous studies indicate that most millennials struggle with their finances, particularly understanding basic financial concepts. Because of this, most millennials won’t be able to correctly answer this quiz.
According to a National Endowment for Financial Education research, only 24% of millennials exhibit fundamental financial literacy. According to the Urban Institute, over 77 million Americans with credit (or 35% of adults) have debt that is in collections, while the National Financial Capability Study from FINRA found that almost a third of Americans only pay the minimum amount due on their credit card bills each month.