By Ashlee Ogrzewalla, CFP®, CFDA®, Vice President and Manager of Financial Planning & Marketing
Alarming statistics reveal that many households struggle with their finances. This week, we’ll dive into some of the scariest financial statistics that could affect you or someone you know. Whether it’s the overwhelming debt burden, the housing affordability crisis or the lack of basic financial literacy, these figures shed light on the importance of taking control of your financial future before it’s too late. Let’s explore these chilling numbers and what they mean for the average family.
Emergency Savings and Budgets
- A 2022 Bankrate survey found that 57% of Americans needed to borrow or sell something to cover a $1,000 emergency expense.
- According to Gitnux, only 44% of Americans have more emergency savings than credit card debt. They also report that only 41% of U.S. adults have a budget and keep close track of their spending. Of those who have a budget, 56% deviate from it regularly.
- A 2022 LendingClub report found that 63% of Americans live paycheck to paycheck, even among earners making over $100,000.
Saving for Retirement
- A 2023 survey by PwC found that 25% of Americans have no retirement savings at all, and nearly 40% feel they are not on track for retirement.
- The National Foundation for Credit Counseling reports show only 30% of Americans have a long-term financial plan.
- A 2023 LIMRA report revealed that 40% of Americans don’t have life insurance coverage.
Financial Stressors
- In its annual Stress in America survey, the American Psychological Association (APA) reported that 64% of Americans say money is a significant source of stress, and 55% of U.S. adults report regularly worrying about their financial situation.
- The APA also reported that 66% of Americans say improving their financial situation is a top resolution.
Consumer Debt
- According to the U.S. Federal Reserve’s G.19 Consumer Credit report, U.S. credit card debt surpassed $1 trillion in 2023, with the average household carrying $7,000 to $9,000 in credit card debt.
- Per the U.S. Federal Reserve and the Education Data Initiative, the total U.S. student loan debt reached $1.75 trillion, with the average borrower owing around $37,000.
- A 2022 survey from the National Association of Realtors found that 70% of millennials think they’ll never be able to afford a mortgage due to rising prices.
Financial Literacy
- The Financial Industry Regulatory Authority’s 2022 National Financial Capability Study revealed that about two-thirds of Americans failed a basic financial literacy test.
- According to the Standard & Poor’s Global Financial Literacy Survey, only 57% of adults worldwide are financially literate.
- A National Endowment for Financial Education study found that only 24% of millennials demonstrate a basic understanding of financial concepts, such as inflation, risk and interest rates.
These statistics are unsettling, but they also serve as a wake-up call. The good news is that the right strategies can overcome these financial challenges. From building an emergency fund and tackling debt to improving financial literacy and planning for retirement, there are actionable steps you can take to create a more secure financial future. Work with your Edwards financial advisor to get started or make changes. The key is to start before these scary numbers become your financial reality.
IMPORTANT DISCLOSURES: The information provided is based on internal and external sources that are considered reliable; however, the accuracy of this information is not guaranteed. This piece is intended to provide accurate information regarding the subject matter discussed. It is made available with the understanding that Benjamin F. Edwards is not engaged in rendering legal, accounting or tax preparation services. Specific questions on taxes or legal matters as they relate to your individual situation should be directed to your tax or legal professional.