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Things start to feel pretty bleak when I read press releases from Bankrate and articles from GoBankingRates.
For example, one of the latest pieces from GoBankingRates states that 69% of Americans have less than $1,000 saved. And 45% of those respondents say they have $0 saved!
In case that weren’t a bad enough sign, only — well, “only — 58% of people last year said they had less than $1,000 in the bank. That’s a startling — and worrisome — jump.
Meanwhile, according to Bankrate, lower income earners are spending a disproportionate percentage of their income on “vice” expenses: lottery tickets, alcohol, tobacco and gambling. Disproportionate, that is, compared to other income groups — those earning more than $30,000 a year.
Of course, you could argue that the percentages are necessarily going to be higher for those earning less. So the other income groups could be spending the same as (or more than) the lower income folks.
Except that even the next income group up ($30,000 to $49,000) spend a significantly smaller percentage of money than the lowest income tier on lottery tickets (3% vs 13%), alcohol (7% vs 11%) and tobacco (6% vs 13%). The only place the two groups were about the same is gambling (4% for the under-$30,000-a-year crowd vs. 3% for those earning $30k to $49k).
To be clear, those figures don’t include the answers of people who said they spend $0 on the four categories.
It’s not great by age range, either. Even taking into account those who abstain, Millennials spend on average over $1,000 more a year than Gen Xers or Baby Boomers: $2,995 compared to $1,885 and $1,950 respectively.
And Americans’ credit card debt is ballooning. It’s’ up to $830 million, a 6% increase from 2018. This means that the average American now has $6,200 in credit card debt. Hoo boy.
Counterintuitively, those with a net worth between $100,000 and $1 million were the most likely to have credit card debt. Whaaaa?
Of course, when you realize that “net worth” probably includes a house (and that homeownership tends to bring a fair number of bills), perhaps it makes sense that those with a higher net worth are more likely to charge things that can’t be paid off immediately. Or maybe it’s just that people with higher net worths have more access to credit card than those with less than $100,000 in assets.
Whatever the reason, the numbers are disheartening. If people with a high net worth can’t get it together, what hope does the rest of the country have?
Add to all this how little Americans have saved for retirement, and the outlook for our citizens’ finances is pretty bleak.
But still I have hope.
First of all, there is a pretty strong contingent of people dedicated to reading and/or writing about personal finance and how to better their situations. Sure it can become a bubble, so that results like the ones above are shocking/disheartening. But the fact is that there are a large number of people who are prioritizing their finances.
Second, we have to remember that these percentages are based on a small number of people (relative to the size of this country’s population). And the people who take surveys may not represent the average person in America.
After all, a lot of survey-takers do so through rewards sites like Swagbucks, Inbox Dollars or SurveyJunkie. People working for rewards may be those in worse financial situations than the people who are saving.
Third, (for now at least) the economy is going strong. This means that people still have their best chance to start putting money aside or to ramp up their existing savings efforts. (As long as they’re not barely scraping by paying for necessities, obviously.)
Fourth, cities seem to be increasingly looking at raising the minimum wage to something more livable, and that’s likely to boost regular salaries as well. Given that 38% of the GoBankingRate survey’s respondents said that they needed more money to save… Well, they might just get their wish.
Fifth, a recession is inevitable — which may be better news that it sounds.
While the next one will cause a lot of financial strife — especially for those with all that credit card debt and low savings — it may also be a good wake-up call for a lot of people. The Great Recession was pretty dire for a lot of folks, but it also got a lot of Americans to shape up their finances. And many of them continued their good habits even after the worst of the recession’s effects were over.
Obviously, ideally it wouldn’t take financial life or death to kick people’s monetary health into high gear. But frankly at this point, we may just have to take what we can get.
And sixth, when they do start looking for ways to get in good financial shape there are a ton of guides and how-to articles. And a lot of pretty simple, easy steps to trim bills and earn more.
So there are reasons to have hope, despite the seemingly endless barrage of negative news about our countrymen’s finances.
Are you depressed by the constant bad news, or does some hope survive?