If the witches and monsters lurking around this season don’t scare you, these financial statistics will.
Financial problems are like the deep dark secret you have hiding in your closet. No one wants to think about their financial struggles. They’d prefer to just push away their problems and hope they’ll go away.
Yet, financial problems are always hiding within the shadows, just waiting for you to make a mistake and fall flat on your face. If you’re not careful, you’ll inevitably run into some kind of financial crisis and end up paying for it for years to come.
Here are just a few troubling money facts Americans face today – along with some tips to avoid these traps.
1. 44% of Americans would struggle to cover a $400 emergency.
The average out-of-pocket cost for an unexpected medical expense is $1,000. Many Americans wouldn’t be able to come up with this amount of money on a short notice, including many families who make more than $100,000.
Creating an emergency fund of at least $400 can save you from years of paying off credit card or loan debt. It could save you from eviction. And it could give you financial security to know that you can weather whatever setbacks life may throw at you.
2. 38% of households have credit card debt.
American credit card debt surpassed $1 trillion this year, according to the Federal Reserve. In fact, the average credit card debt has risen to $5,427, according to TransUnion statistics.
Pay off your credit card debt by using the debt snowball or paying more than your minimum payment each month.
3. 13.7% of American adults haven’t saved anything for retirement.
Along with this statistic, 28.6% have less than $10,000 saved for retirement. It’s terrifying to think that many Americans won’t be able to afford to retire. Can you imagine working a busy, full-time job when you’re 90 years old? Now that’s a scary thought!
If you haven’t already started saving for retirement, start now. The earlier you start, the better off you’ll be. It’s estimated that Millennials will likely need between $1.8 and $2.5 million in retirement to live comfortably.
4. 32% of Americans maintain a household budget.
Many Americans struggle with their finances because they have no idea how to manage their income. With only 32% of Americans budgeting their finances, it’s no wonder most Americans are struggling to live paycheck to paycheck.
A budget can help you see where your money is going. Making more money won’t help you much if you don’t know how to spend it… or not spend it.
Don’t let these statistics scare you. You don’t have to worry about these statistics if you’re keeping a regular budget, putting money towards retirement, avoiding credit card debt, and building your emergency fund. Learn how to improve your finances today with our financial education program, FinStrong.