As a personal finance expert, I always come across spending statistics that surprise me, make me sad, and some that make me worried.
The statistics in this blog post are about people’s average money habits, and they may surprise you. But, I want you to be aware of them so that you can be better than “normal.”
Maybe you will find them so shocking that you will think twice before you buy something, or they may even cause you to drastically change how you spend money.
I do also want to mention that even if you are doing better than the average person, there is always room for improvement.
You should always strive to do your best as sometimes “average” is not good enough for you to live a financially successful life. Keep in mind that the average person is not the greatest with money, and many are wrecked with stress and hardship due to their unfortunate financial situation.
I've talked about shocking money statistics before, which you can find below:
- 14 Shocking Statistics About The Things We Spend Money On
- Are You Better Than Average?
- Money Statistics That May Scare You
Today, I want to show you more because I just find them so interesting!
Below are some statistics on money habits that will hopefully get you into better financial shape.
1. The average American household has $132,529 worth of debt.
The average American household, that doesn’t have a mortgage, is $132,529 in debt. But, if you factor in those with a mortgage, that number goes up to $172,806. This debt includes things such as credit cards, mortgages, auto loans, student loans, medical debt, and more. The average credit card balance alone is $16,061.
And, the average household with a car loan has loans of $28,535.
At first, I thought that perhaps the $132,529 wasn't too bad because I thought most of it had to have been a mortgage, but that is only the amount for those without a mortgage. Plus, if you figure how much of it is because of credit card and car loan debt, that average household debt is pretty scary.
Many people take out a car loan that is half their annual salary or even their full yearly salary, and that can be a huge mistake. Working a whole year for a car is something that most people would regret if they really thought about how much that monthly payment is actually costing them.
2. Average percentage of budget categories.
Have you ever wondered what the average person spends in each category?
- 32.9% goes towards housing.
- 17% goes towards transportation.
- 12.5% goes towards food.
- 11.3% goes towards insurance.
- 7.8% towards healthcare.
- 5.1% on entertainment.
- 3.3% on clothing.
- 3.2% on cash contributions.
- 2.3% on education.
That's a lot going towards housing and transportation each month and each year.
3. 30% of American households have a long-term financial plan.
This one really shocked me, but sadly, I guess I'm not really too surprised. Everyone should have a long-term financial plan, especially if they are not retired or financially independent.
Without goals, it's hard to know what you're working on, which could make it difficult to stay focused.
While How To Reach Your 2018 Goals – Setting Goals for 2018 is about reaching your 2018 goals, it all can also be applied towards reaching your long-term goals. I definitely recommend reading that post and applying it towards your life so that you can reach your financial goals.
4. In 2015, the average American donated $5,491.
Now, that is everyone, so if you are thinking about the amount you donate annually, this may sound skewed. However, the average taxpayer making between $50,000 to $100,000 claimed a charitable deduction of $3,244.
5. You're less likely to budget if you earn less than $75,000 per year.
You're also more likely to coupon if you earn more than $75,000 per year!
There are many reasons for budgeting, yet it seems like the majority of people still do not have one. I believe that if more people started making a budget, they could stop living paycheck to paycheck, increase their savings, reduce and/or eliminate their credit card debt, and more.
Budgets are extremely important, and I believe that nearly everyone should have one. Rich, poor, middle-class, no matter where you are financially, a budget can most likely improve your financial situation.
Budgets are great because they keep you mindful of your income and expenses. With a monthly budget, you will know exactly how much you can spend in a category each month, how much you have to work with, and what spending areas need to be evaluated, among other things.
6. 44,000,000 Americans have student loans.
That's a lot of student loan debt!
I know it can be difficult, but learning how to pay off student loans can lead to many positives, such as:
- You may finally feel less financial stress.
- You may be able to use that money towards something more important, such as saving for retirement.
- Getting rid of your student loans may allow you to pursue other goals in life, such as traveling more or looking for a better job.
I know these things are true because learning how to pay off my student loans is one of the best decisions that I've ever made.
Related reading: How I Paid Off $40,000 In Student Loans in 7 Months
7. 10,000,000 American households don't have a bank account.
That is a lot of people without a bank account. I'm going to assume that many of these same people also don't invest.
Investing is important because it means you are letting your money work for you. If you weren’t investing, your money would just be sitting there and not earning a thing.
This is important to note because $100 today will not be worth $100 in the future if you just let it sit under a mattress. However, if you invest, then you can actually turn your $100 into something more. When you invest, your money is working for you and hopefully earning you income.
For example: If you put $1,000 into a retirement account that has an annual 8% return, 40 years later that would turn into $21,724. If you started with that same $1,000 and put an extra $1,000 in it for the next 40 years at an annual 8% return, that would then turn into $301,505. If you started with $10,000 and put an extra $10,000 in it for the next 40 years at an annual 8% return, that would then turn into $3,015,055.
8. There are 1.9 billion open credit cards in the U.S.
There are 199.8 million cardholders in the U.S, which means that there are almost 10 credit cards per person. This does include both corporate and personal credit cards, but it still seems like a lot!
9. 20,000,000 Americans own their homes.
Yes, this means 20,000,000 Americans don't owe anything on their homes or have a mortgage.
That is actually pretty amazing, and I'm surprised the number is so high. I hope it continues to increase well into the future.
10. Two out of five Americans have committed financial infidelity.
For every five Americans with combined finances, two of them have, at some point, committed financial infidelity. And, the survey found that financial infidelity has increased in just the past two years.
Whether it’s secret credit card debt, a large secret purchase (such as a house or car even!), or something else, some relationships do experience these problems. I have heard of people finding out that their spouses had hundreds of thousands of dollars worth of debt they didn’t know about, a second house they kept without the spouse knowing, and so on.
The problem with financial infidelity is that it can lead to even bigger financial problems, such as debt piling up beyond what’s imaginable, stress, unhappiness. It has the potential to start impacting other areas in a person’s life (such as work), and it may even lead to divorce.
Related reading: Financial Infidelity And The Problems It Can Create
Sources for these statistics on money habits:
- 10 Incredible Financial Statistics That Sum Up the Average American
- Personal Finance Statistics
- 20 Money Stats That Will Blow You Away
- More Than 20 Million Americans Own Their Homes Outright
- Two in Five Americans Confess to Financial Infidelity Against Their Partner
What statistics above shocked you? How are you doing when compared to the average person?
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