The Good the bad and the Ugly

/ Budgeting, Investing / By

personal finance stats

Ahh, the state of personal finances in America. While it doesn’t take an expert to know there are some major problems, how bad really is it?

To try and answer that question, compiled below are three different types of stats I have affectionately called the good the bad and the ugly.

THe good

These facts and statistics are all positive. They bode well for both the current state of peoples personal finances as well as their future state.

  • three-fourths of adults were doing at least okay financially, meaning they reported either “doing okay” financially (40 percent) or “living comfortably” (35 percent) as reported by a Federal Reserve Survey

Three, only three. Before we dive any deeper into the bad and the ugly I would like to mention one thing. Even though the state of personal finances in America needs major work there are other reasons to be optimistic. Globally, cost of living standards have increased dramatically as well as life expectancy. Medical research continues to advance, curing diseases that would be considered a death sentence 20 years ago. Technology has opened up an entirely new world of possibilities from connectivity to automation. Even with the threat of war looming in Ukraine, we still live in one of the most peaceful time periods in human history.

Now back to personal finance

the bad

These facts range from moderately frightening to down right depressing. Their implication and impact however are primarily impacting peoples current financial state

  • 30% of people would not be able to cover a $400 unexpected expense
  • 3% said their last move was due to an evection or threat of one. 5% of non homeowners with children reported the same thing
  • 40% of people who went to college have some degree of college debt.
  • Of people with student loans 21% had borrowed with credit cards
  • 83% of adults had credit cards (not a bad thing),  almost 50% of them though carried a balance month to month
  • 29% of adults reported issues with the banking system from unexpected fees, customer service delays to fraud.  Besides fraud these issues disproportionately affected those making under 50,000 a year.
  • Only 51% of respondents thought the benefits of higher education outweighed the costs with about 28% saying the costs and benefits are the same
  • Of those that did not complete a college degree 71% would have liked to complete more education
  • 93% of Retires receive income from SS,  68% receive income from a pension, 50% received income from interest, dividends or rental income.

the ugly

While less immediately impactful, these facts and statistics are the ones that are going to have major implications on the future state of personal finances in America.

  • Only 36% of Non-retirees thought their retirement savings were on track
  • “More than 6 in 10 non-retirees with self-directed retirement savings expressed low levels of comfort in making investment decisions with their accounts”
  • Only 25% of women with a high school degree or less felt comfortable investing
  • 22% of students did not have basic financial skills
  • 74% of teens reported that they don’t feel confident in their personal finance knowledge

so what?

In a vacuum, these statistics are basically meaningless. They don’t help you or I actually change our own finances and learn how to manage our money better. What I think they do show, however is that we are not alone. Millions of Americans across the county are struggling with what to do as well.

In some later posts I will unpack some of these individual statistics and what I think they mean more specifically about individuals finances, and what we can do to change it.

GT