Financial planning statistics are essential for individuals and businesses alike.
By understanding which financial planning statistics are most important, you can make better decisions with your money.
Here are the top financial planning statistics you should know.
How is the Average American Doing Financially?
Financial statistics can be difficult to interpret, but they can give us a general idea of how the average American is doing financially.
According to the Federal Reserve, the median household income in the United States was $67,251 in 2020.
While the average American household has some debt, they are still bringing in more money than they owe each year. However, this doesn’t necessarily mean that everyone is in a good financial situation.
In fact, the Federal Reserve reports that about 4 in 10 adults say they would have difficulty paying an unexpected $400 expense. This shows that even though many Americans are doing alright financially, there is still a significant portion of the population that is struggling.
When it comes to personal finance statistics, it’s important to remember that averages can be misleading. Everyone’s financial situation is unique, and what might be considered “average” might not actually be typical for you.
It’s always a good idea to take a close look at your own finances and make sure you are doing everything you can to stay on track.
Financial Planning Statistics – Highlights
- Only about 30% of American households have any kind of long-term savings or financial plan.
- 84% of Americans have a higher income than their parents did at the same age.
- 20% of Americans don’t save any amount of their yearly income – at all.
- 42% of Americans have less than $10,000 saved for retirement.
- 44% of people expect their personal finance situation to improve in the next year.
Only about 30% of American households have any kind of long-term savings or financial plan.
Source: Gallup
This means that the vast majority of people are not prepared for unexpected expenses or retirement. The reasons for this are numerous, but one major factor is the increasing cost of living.
Another reason is the insecurity of many jobs, which make it difficult to save for the future. Whatever the reasons, it is clear that more people need to start planning for their financial future. Otherwise, they will find themselves struggling to make ends meet when they retire.
Financial planning does not have to be difficult or time-consuming. There are many helpful resources available, and it is never too late to start saving for the future. However, it is important to make a plan and stick to it in order to achieve financial security.
84% of Americans have a higher income than their parents did at the same age.
Source: Pew Charitable Trusts
The cost of living has increased significantly over the past few decades, and wages have not kept pace. As a result, many Americans are struggling to make ends meet. A study found that 84% of Americans have a higher income than their parents did at the same age.
However, the study did not take into account the cost of living or inflation. When these factors are accounted for, the picture looks very different. In real terms, wages have stagnated or even declined for many Americans. This explains why so many people are struggling to get by, despite working hard.
Americans who have a poor level of financial literacy are late on mortgage payments 25% of the time.
Source: Federal Reserve Bank of Atlanta
This is likely due to a lack of understanding about simple financial concepts like budgeting, interest rates, and compound interest. Without this basic knowledge, it is difficult to make informed decisions about big purchases like homes and cars. As a result, many Americans find themselves in debt and struggling to make ends meet.
The good news is that financial literacy can be learned relatively easily. By taking some time to understand basic personal finance principles, Americans can improve their financial wellbeing and avoid the stresses of being in debt.
In 2017, the average household pre-tax income was $73,753.
Source: Bureau of Labor Statistics
These personal finance stats from the Bureau of Labor Statistics are important to note.
Household income includes all the money that members of the household earn from wages, salaries, investments, or other sources. Pre-tax income is the total income before taxes are deducted. The average household pre-tax income gives us a good idea of the overall financial health of households in the United States.
It is important to note that this number does not take into account the cost of living or other expenses. Households with a higher pre-tax income may have a lower standard of living if they live in an area with a high cost of living.
20% of Americans don’t save any amount of their yearly income – at all.
Source: Bankrate
This lack of savings can have devastating consequences down the road, as it leaves individuals without a cushion to fall back on in times of financial difficulty. It can also make it difficult to plan for retirement, as there will be no nest egg to draw from.
The reasons why so many Americans don’t save are varied, but they often boil down to two factors: low income and high expenses. For many people, simply making ends meet on a month-to-month basis is a challenge, and there is little left over at the end of the month to put into savings.
As a result, it’s important to raise awareness about the importance of saving, and to provide resources and assistance to those who are struggling to do so.
42% of Americans have less than $10,000 saved for retirement.
Source: GoBankingRates
There are a number of factors that contribute to this statistic.
First, there is a lack of financial education in the United States. Many young people enter adulthood without a basic understanding of personal finances, and as a result, they are ill-prepared to make sound financial decisions.
Second, many Americans live paycheck to paycheck and do not have any extra money to put into savings. Even if they wanted to save for retirement, they simply could not afford it.
Lastly, the cost of living has increased significantly over the past few years, making it difficult for people to keep up with their bills, let alone save for the future.
Women are far less likely than men to have a retirement fund.
Source: GoBankingRates
It’s no secret that women face unique challenges when it comes to personal finance. From unequal pay to the gender-based financial biases that persist in our society, women often have to work harder than men to earn and save the same amount of money. As a result, it’s not surprising that women are far less likely than men to have a retirement fund.
There are a number of factors that contribute to this disparity. First and foremost, women tend to live longer than men, which means they need more money saved in order to maintain the same standard of living during retirement.
Additionally, women are more likely than men to take time out of the workforce to care for children or aging parents, which can lead to lower earnings and fewer opportunities to save for retirement. Finally, financial education is still sorely lacking in our society, which leaves many women ill-prepared to make sound financial decisions throughout their lives.
The good news is that there are ways to close the retirement savings gap between men and women. For starters, employers can do more to provide financial education benefits for their employees. Furthermore, personal finance should be included in school curriculums so that young people grow up with a better understanding of how to manage money. Finally, we need to continue working towards gender equality in the workforce so that women have the same opportunities as men to earn a good income and put away money for retirement.
39% of Americans say that they don’t save anything because their expenses don’t allow for it.
Source: Bankrate
Many Americans find personal finance to be a daunting task, which may explain why only 39% of us are saving any money at all. Financial education can help to empower people to take control of their personal finances and make informed decisions about their money.
With a better understanding of personal finance, more Americans can start saving for retirement, build up an emergency fund, and reach their financial goals.
Personal financial statistics show that 39% of Americans would have a hard time covering unexpected expenses of just $400.
Source: Federal Reserve
This statistic is alarming, but it’s not entirely surprising. After all, personal finance is not taught in most schools, so many people are left to figure it out on their own.
Without a solid understanding of personal finance, it’s easy to make costly mistakes that can have a lasting impact on your financial well-being. That’s why it’s so important to seek out financial education from reliable sources. By increasing your financial literacy, you can take control of your personal finances and set yourself up for a more secure future.
44% of people expect their personal finance situation to improve in the next year.
Source: Bankrate
This is an encouraging statistic, especially in light of the current economic climate. However, it is important to remember that personal finance is a complex topic, and there are many factors that can affect one’s financial situation.
For example, personal finances can be impacted by job security, income levels, inflation, interest rates, and investment choices.
As such, it is important to stay informed about personal finance matters and to make sound financial decisions in order to improve one’s personal finance situation. Additionally, diversifying one’s retirement savings and investing in quality financial products can also help to improve one’s personal finance situation.
By taking these steps, people can increase their chances of achieving improved personal finance in the coming year.
Young adults who receive personal finance education are less likely to carry credit card debt – and are more likely to apply for financial aid for college.
Source: Council for Economic Education
Student loan debt in America is now the second largest form of consumer debt, behind only mortgage debt. And, unfortunately, it’s only getting bigger. The average student loan borrower now owes over $37,000.
But it’s not just student loan debt that young adults have to worry about. Credit card debt is also a major problem, particularly for those who don’t have a firm grasp on personal finance. In fact, the average credit card holder owes over $5,000. This is where personal finance education comes in.
Young adults who receive personal finance education are less likely to carry credit card debt – and are more likely to apply for financial aid for college. This is because they understand the importance of budgeting and saving for future expenses. As a result, personal finance education can play a key role in helping young adults avoid the financial pitfalls of adulthood.
59% of American adults live paycheck to paycheck.
Source: Schwab
One reason why so many American adults live paycheck to paycheck is because of student loan debt. According to a recent study, the average student loan debt for graduates is $37,000. This can make it very difficult to save up for a down payment on a house or car, or even to have enough left over each month to cover unexpected expenses.
Credit card debt is another major factor that can contribute to living paycheck to paycheck. The average credit card debt for Americans is $5,700, and the interest rates on credit cards are often quite high. This can make it difficult to get ahead financially, as any extra money that is available often goes towards paying off debts rather than being saved or used to make investments.
Of course, there are other factors that can contribute to living paycheck to paycheck as well. For example, some people simply do not have enough income to cover all of their expenses.
Others may have poor personal finance skills and find it difficult to budget and save money effectively. However, student loan debt and credit card debt are two of the most common reasons why people struggle to make ends meet each month.
At age 30, the average millennial has student loan debt that is roughly 45% of their annual total income.
Source: National Endowment for Financial Education
For many millennials, student loan debt is a significant financial burden. In fact, at age 30, the average millennial has student loan debt that is roughly 45% of their annual total income. This can make it difficult to save for retirement or make other major financial purchases.
In addition, millennials are also more likely to have credit card debt than previous generations. The average credit card debt for millennials is $5,000, which can add even more financial strain.
Personal finance can be a daunting topic, but it’s important to understand all of your options when it comes to managing your student loan debt. Speak with a financial planner or advisor to develop a plan that works for you and your unique situation.
By taking control of your student loan debt, you can start working towards a bright and financially secure future.
66% of Americans don’t feel on track when it comes to retirement savings – largely due to the burden of high housing costs.
Source: TD Ameritrade
For many Americans, the dream of a comfortable retirement is out of reach. A recent study found that 66% of Americans don’t feel on track when it comes to retirement savings, and the primary reason cited was high housing costs.
With more and more people struggling to make ends meet, it’s no wonder that saving for retirement is difficult.
Housing costs have been on the rise for years, and they show no signs of slowing down. This puts a huge strain on families, who are already struggling to keep up with the cost of living. In addition, many people are burdened with debt from student loans or credit cards. All of this makes it very difficult to save for retirement.
The situation is particularly dire for millennials, who are just now starting their careers. They face daunting housing costs and an uncertain job market, making it hard to imagine ever saving enough for retirement.
However, it’s important to start saving as early as possible. Even small contributions can add up over time, and every little bit helps. If you’re not sure where to start, there are plenty of resources available to help you get started on the road to a comfortable retirement.
When it comes to basic financial literacy, 25% of parents admit that they have not talked to their children about household finances.
Source: Guidant
A recent study found that 25% of parents have not talked to their children about household finances. This is a troubling statistic, as financial literacy is an essential life skill. There are a number of reasons why parents may avoid discussing household and consumer finances with their kids. For some, it may be a taboo topic that they are uncomfortable discussing.
Others may feel that their own financial knowledge is insufficient. However, the fact remains that children need to learn about money in order to make sound financial decisions as adults.
One way to start these conversations is by teaching kids the basics of budgeting and saving. Helping them to understand how credit works and how to avoid debt can also be invaluable. By starting early, parents can give their children the tools they need to make smart financial choices throughout their lives.
Final Thoughts: Financial Planning Statistics
While the financial statistics mentioned above may seem daunting, there are ways to overcome the trends. Consider these tips today and you’ll be on your way to a more financially secure future.
