We’re making a lot of financial mistakes
You can take this to the bank: Americans are messed up about money.
A slew of new surveys and data have come out revealing that we don’t save enough, we spend money we don’t have, we have our financial priorities backwards — and more. Here are five new stats that prove Americans are backwards about money.
More than half of Americans have less than $1000 in savings.
Data released Tuesday from GoBankingRates.com found that nearly 57% of Americans say they have less than $1,000 saved in their savings account, and 39% say they have nothing.And that’s just the latest in a slew of similar findings. A survey released in June by Bankrate.com found that 24% don’t have even a single dollar saved for an emergency. And a survey released in January by Bankrate found that nearly 60% of Americans wouldn’t have enough savings to pay for a $500 expense if it came up unexpectedly.What’s more, more than one in five say they’d slap down their credit card to pay that expense and more than one in would mooch off family to get the cash. Experts recommend that Americans have a least three to six months of income in the bank to pay for unexpected emergencies.
- We are more worried about paying for our next vacation than about saving enough for retirement. That’s the finding of a study released recently by COUNTRY Financial, in which Americans report being more concerned about affording that vacation (36%) than having adequate retirement savings (32%). That may explain, in part, why more than half of Americans will be broke when we retire, according to a survey from GoBankingRates.com.
- Millions of us hide money from our spouses and partners. An estimated 12 million Americans confess they have kept a source of money secret from their romantic partners, according to CreditCards.com. That’s typically not smart, experts say: “Any time you get into these kinds of things where you are operating behind the scenes, it usually comes out at some point,” Corey Allan, a marriage and family therapist told Credit Cards.com. “We can’t keep things hidden, especially in today’s technological world. Any spouse who has any kind of suspicion can become a detective and find it.” (Also see: If you have sex with a rich millennial, expect this power dynamic.)
We prioritize paying the wrong bills first. When we can’t pay all our bills, we make bad choices about which to pay. “Consumers in financial distress tend to prioritize unsecured personal loans ahead of other credit products such as auto loans, mortgages and credit cards,” according to a study of roughly two million consumers who had all four types of debt out this year from credit monitoring service TransUnion. But experts say that’s a backwards way to handle these bills.
We’ve racked up $1 trillion in credit card debt — and that’s just a fraction of what we owe. That’s according to data released this year from the Federal Reserve, which found that U.S. consumers owe $1.0004 trillion on their cards, up 6.2% from a year ago; this is the highest amount owed since January 2009. What’s more, this isn’t the only consumer debt to top $1 trillion. We now also owe more than $1 trillion for our cars, and for our student loans, the data showed.This story was originally published in May and has been updated.
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