Money is a significant factor in many of our lives. It can be a source of security or stress. Unfortunately, when it comes to our finances, many of us will fall in the latter camp. To make matters worse, the statistics on the American financial landscape are downright scary.
To help prevent you from becoming a scary statistic, we major financial indicators for Americans. We’ll also outline some strategies for avoiding the financial pitfalls that many fall into.
Why Financial Statistics Matter
To understand how dire our financial situation is, it’s important to look at the data from a high-level. Financial statistics provide an insightful snapshot of the state of our money. How much debt do Americans have? How much savings do they have? How secure is their retirement? By looking at the facts, you can get reassurance that you are on the right track, or you can start to take steps to prevent yourself from adding to the scary statistics.
5 Startling Financial Statistics
Unfortunately, many of the numbers paint a bleak picture of the financial situations many Americans find themselves in. Here are five startling financial statistics:
- 57% of Americans Have Less than $1,000 in Savings
Recent research conducted by GoBankingRates found that 57% of Americans do not have $1,000 or more in savings. That’s an alarming number considering this is barely enough to cover an automotive repair, let alone a medical bill or other emergency.
- 44% of Millennials Have No Retirement Savings
Another study conducted by Goldman Sachs revealed that 44% of Millennials have no retirement savings at all – a sobering thought. It’s also concerning when you consider that Millennials are expected to outlive their savings.
- 78% of Americans Live Paycheck to Paycheck
The 2018 Money Survey by Erickson reports that 78% of Americans live paycheck to paycheck. That number tells you that many of us are only one setback away from financial hardship.
- 31% of Americans Will Skip Medical or Dental Treatments for Financial Reasons
The same study by Erickson also revealed that 31% of Americans are skipping medical or dental treatments for financial reasons. This can have severe long-term repercussions.
- The Average American Carries $90,000 in Debt
According to Experian, the average American carries $90,000 in debt – a combination of student loan debt, mortgage debt, and credit card debt. That’s a burdensome number that can have detrimental consequences and make it hard to save a rainy-day fund.
7 Strategies to Avoid Becoming a Scary Financial Statistic
There are clear reasons why so many Americans find themselves in such financial distress. Low wages, high costs of living, and lack of guidance are just a few of the root causes. However, there are also measures everyone can take to prevent adding to the scary financial statistics outlined above. Here are seven practical strategies you can use to improve your financial security:
- Create a Savings Plan
The old adage “pay yourself first” is still relevant today. No matter how small your paycheck is you need to prioritize savings. It’s very easy to add a small amount of money to your savings with each paycheck. Or if you get windfall, be sure to add that amount to your emergency fund.
- Pay Off Credit Card Debt
There’s no faster way to save money than paying off your credit card debt. It not only eliminates the interest you’re paying on high-interest debt, but it also eliminates the stress that comes with having a lot of debt.
- Make a Budget
Making a budget is essential to managing your finances. It will help you understand your financial situation better and prioritize your spending. A budget also gives you a more formal structure when it comes to saving and can help you reach your financial goals faster.
- Automate Your Savings
Creating a set-it-and-forget-it savings plan is one of the best strategies for staying motivated. Set up automated deposits in your savings account every month and let that money accumulate over time. The more money you can save each month, the closer you’ll be to having a strong financial footing.
- Take Control of Your Finances
When you’re in control of your finances, it can be empowering. To do this, start tracking your spending and income in a budgeting app or Excel spreadsheet. Once you figure out where all your money is going, you can start taking steps to pay off your debt or save for retirement.
- Invest Wisely
Investing is a powerful tool that can help you build wealth over time. But be sure to do your research, and in general, consider a mix of investments including stocks and bonds. Also, make sure you have an emergency fund before investing.
- Get Professional Financial Advice
If you’re really stuck, consider hiring a professional to help you assess your finances. Whether you need help selecting investments, drafting a budget, or even negotiating with creditors, it can be helpful to have someone to consult with.
Money problems should not be taken lightly, and they could have long-term negative impacts on your financial future if not managed properly. Fortunately, it is possible to start putting yourself on the right track to financial stability. Consider the finance strategies outlined in this article. Take ownership of your finances and look for strategies that will lead you to financial success.
