What’s more frightening than zombies, vampires, and ghosts? The financial status of many Americans. Unfortunately, many face the reality of not having an emergency fund, being unable to save enough for retirement, and having an overwhelming amount of credit card debt. When that’s your financial status, it can feel much scarier than the latest horror film. There are some scary financial statistics out there, and our goal here at Ask the Money Coach is to ensure they don’t become your reality. Take a look at these financial statistics below and see if they apply to your life.
Emergency Fund Statistics
Fifty-eight percent of respondents to a recent study revealed they have less than $1,000 in savings.
Savings are a financial safety net, and financial statistics like this one reveal that many Americans are living without one. Having at least $1,000 in savings allows you to handle pop-up emergencies. Also, it can prevent you from using a high-interest credit card to finance these situations.
Only 18 percent of Americans could live off of their savings for six months.
Many financial experts—including myself—advise you to have six to 12 months of savings in case of a financial emergency. Anything can happen to make this money necessary. For example, if you become unemployed or suffer an injury, you still want to have money to handle your expenses.
Retirement Savings Statistics
A recent study revealed that 45.5 percent of Americans do not have anything saved for retirement.
It may seem far off, but there will come a time when you no longer want—or are able— to work. That’s why you must begin preparing for that time in your life today. Saving for retirement gives you the freedom to not have to worry about what life will be like once you hit 65 or 75 years old. Unfortunately, this financial statistic reveals that many Americans are not in the position to fully retire when the time comes.
Credit Card Debt Statistics
The average U.S. household with credit card debt has $6,829 in revolving balances.
Credit card debt is one of the trickiest obligations to handle. This is because interest rates are typically higher, which causes the owners of the debt to pay more than the principal balance throughout the year. In addition to having a mortgage, car payments, and student loan debt, credit card payments can significantly increase the burden of managing your expenses. Unfortunately, $500 in credit card debt can quickly double or triple due to interest, so it is crucial to pay these off as soon as possible.
One in four Americans making $150,000 or more a year are living paycheck to paycheck
Financial statistics like this one are important because it shows that higher salaries are not the only solution to achieving financial success. Sure, making more money over time can help you meet your financial goals quicker. However, you need to establish healthy spending habits at every salary bracket. It’s easy to justify that new car or larger home if you have more money to spend. No matter how much you make, develop a mindset where you purchase only what you need or what can fit in your budget.
Don’t Let These Scary Financial Statistics Become Your Reality
While these financial statistics are a bit frightening, there is good news. You can avoid them. Developing a budget, building an emergency fund, starting rainy day savings, and beginning the process of saving for retirement can put you on the right path. You can take back control of your finances by establishing goals and living within your means. Before you know it, money struggles can be a thing of the past.
If you want a roadmap to help you get on the path to having a lifestyle you can afford now and in the future, I invite you to join Money Coach University.
Here are three trainings within the university that you might find beneficial while on your financial journey.