10 of the Most Shocking Personal Finance Statistics

Posted on Posted in Personal Finance

Money impacts essentially every aspect of our life, yet many of us aren’t doing so well with it.

Here are 12 of the most shocking financial statistics, and how we can avoid becoming one of them.

#1) 72% Of Us Report Being Financially Stressed Each Month 

Life’s too short to have to worry about money every month. Rather than stressing and missing out on life, we should implement a financial strategy and system that ensures we win with money.

Source: APA

#2) 75% Of Us Can Expect To See Our Assets Disappear Before We Die 

Ouch! If we don’t want to outlive our assets, we better make a plan and invest for our future. If we don’t, it looks like we’re ensuring that someone else will have to keep us financially afloat down the road.

Source: Ernst & Young Study

#3) The Median Retirement Savings For Families In Their Late 40’s Is Only $6,200

I guess that explains why so many of us will outlive our assets. It’s pretty easy to live longer than a few months worth of savings—especially considering our spending habits.

Source: Yahoo! Finance

#4) 33% Of Us Have $0 Saved For Retirement 

Saving for retirement is always something we can do tomorrow, right? Why do something today if you can put it off until tomorrow?

As absurd as this may sound, it’s this type of thinking that many of us fall victim to every day. Any of these sound familiar?

  • I’ll invest when I have more money.
  • I’ll invest when I have more time.
  • I’m young, I’ll start investing later.
  • Investing is complicated.
  • Now is not the right time. 

With each of these comments we act as if we’re going to take action tomorrow, but tomorrow never seems to come.

By the time most of us wake up, we’ve missed years of opportunity and are way off track of where we wished to be.

Check out The 10 Biggest Financial Lies We Tell Ourselves and learn how to prevent these roadblocks from prolonging your inability to reach financial freedom. 

Source: Go Banking Rates

#5) 50% Of Americans Are Living Paycheck To Paycheck

Many folks are caught in a vicious financial cycle where they can’t seem to escape. Before they even get a paycheck, bills have piled up and demand their attention.

If we live paycheck to paycheck, there’s not a whole lot of money left over after the car payment, mortgage, phone bill, cable bill, and other utilities.  When we live AT our means rather than BELOW our means, all of our money is spent on “have to’s” rather than the “get to’s.”

If you want to escape the rat race, live WELL below your means.

Source: Market Watch 

#6) 69% Of Us Have Less Than $1,000 In Savings 

That’s bad. 69% of people are just one emergency away from financial ruin.

No matter what your financial strategy is, it’s smart to have a rainy day fund in case the unexpected expenses that are sure to happen actually do happen. You should set aside at least 3 to 6 months of expenses into an emergency fund.

Source: Go Banking Rates

#7) 40% Of Us Couldn’t Come Up With $2,000 in 30 Days If We Had To 

The average American makes about $4,000 a month, but 40% of us couldn’t come up with half that much in 30 days if we had to.

Why?

Because our spending has gotten out of control. We’ve strapped ourselves with so much debt that it’s hard to cut our spending significantly, because so many of our costs are “fixed” each month. We can’t reduce them if we tried.

Cut the debt and you’ll open up a world of financial freedom. 

Source: National Bureau of Economic Research 

#8) The Average U.S. Household Owes More than $16,000 in Credit Card Debt 

How are you ever supposed to get ahead financially when you’re swamped with credit card debt?

You’re not. So ditch the debt.

If you can’t control your spending, then get rid of your cards. When we swipe a card, we spend 12-18% more than we do if we use cash

Source: Money 

#9) 79% Of Young Adults Fail To Pay Their Credit Card in Full Each Month 

A wise man once told me that he who understands interest, earns it. He who doesn’t, pays it.

Paying interest on credit card debt is one of the biggest financial fiascos we can get ourselves into. If you can’t afford it, don’t buy. If you use a credit card, make sure it’s paid off at least 5 days before the end of the month.

Source: Financial Educators Council 

#10) 40% Of Us Will Never Gain A Net Worth In Excess Of $10,000 

This may be the saddest statistic of them all.

Our net worth (our assets minus our liabilities) is one of the greatest measurements of our financial health. It gives us a good indication of how much we save and invest compared to how much debt we take on. If our net worth is low, we’re either not investing enough or we’re taking on too much debt—either way, we aren’t financially healthy.  

So as a group, we’re not very healthy at all. Those who fail to increase their net worth will never be able to retire. They’ll never escape financial worry. They’ll never be financially free.

Don’t be part of the 40 percent. Crush debt, invest, and grow your net worth.

Source: Financial Educators Council 

Conclusion – 10 of the Most Shocking Personal Finance Statistics

These statistics are shocking and sobering, but we don’t have to become one of them. We must master our money before it masters us.

Here’s the trick. Spend well below your means. Start investing now and consistently invest throughout your lifetime. Have an emergency fund so you can absorb the financial shocks that are sure to come.

Action Steps

Don’t become a sobering statistic.

Master your monthly cash flow. Check out these articles to help. 

Invest and save for your future. I recommend reading and applying these posts:

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