The state of financial preparedness is frightening when you consider the statistics about how
people handle their finances, savings habits, and what we do with our money.
Over 82% of people cite financial stress as the #1 distraction in their lives, but yet 48% don’t
save anything. According to the Social Security Administration, 68% of adult Americans have
NO savings for an emergency. It is also the #1 cause of divorce.
The average credit card debt is over $ 16,000 per household. Student loan debt averages over
$36,000, with 40% of people behind on their payments.
Our National debt is over $19 trillion dollars last year, which is more than our annual GDP, or the
value of all goods and services sold in a year. Estimates are that underfunded liabilities for
Social Security and Medicare could be over $90 trillion dollars. According to the Social Security
Administration, over 34% use social security as their only income, and 31% of people claim to
have NO retirement savings at all! The average retirement savings balance is only $ 104k, or
roughly 2 to 3 years of most traditional income needs.
According to several statistics on Disability, a 35 year old has a 50% chance of a disability
lasting longer than 90 days before age 65, but only 2% of people believe it will happen. 90% of
working people feel that “earning a paycheck, or income” is their most important asset.
However, over 100 million workers have no long-term disability insurance. 90% of disabilities
are caused by illness, not accidents, but 14% of disabilities will last over 5 years, 24% for 3
months, and 38% of people couldn’t pay their bills for 3 months. Some 46% of people have
never discussed disability planning, but consider that the #1 cause of bankruptcy is unplanned
medical bills or illness/disabilities.
50% of people have no budget, but over 80% feel that it would help. Most people don’t realize
the power of saying a little every month, with most experts feeling 10 to 20% annually of your
paycheck a great place to start. Senator Elizabeth Warren has the 50/20/30 plan, 50% for
necessities, 20% for savings, 30% for discretionary spending. Over use the 4% rule as the
withdrawal factor of your money for retirement, such as 4% of $ 500,000= $ 20,000 of annual
income..it starts with SAVING!
Part of a Cure – Over 70% of people in the Personal Finance Employee Education Foundation
survey desire basic financial education in the workplace. Over 47% of employees spend more
than 3 hours a week at work thinking or trying to solve their financial problems. According to
the Federal Reserve, this causes businesses about $ 5000 a year in lost revenue, totaling over
$300 billion in lost productivity. The American Medical Association feels stress related diseases
runs into the billions each year.
The Problem…..We Need To Change!