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What Happened to Your Paycheck? 21 Personal Finance Statistics

Personal Finance Statistics - Calculator, pen and a document

One of the first indicators of adulthood is the harsh reality that from now on, nobody else is going to pay the bills.

This is your sink-or-swim introduction to personal finance, a new world of worrying and strategic calculations. Making it through the month is an art that requires skill, knowledge, and discipline.

We’ve gathered here some of the most revealing personal finance statistics on the web. Strap yourself in and hold tight to your wallet, ’cause you’re in for a ride.

We’ll start things off slowly with general stats about U.S. households and their budgeting habits. Are people who are born in extreme poverty more likely to stay poor in adulthood? (Hint: Yes.) We’ll touch on the sensitive matter of financial literacy. We’ll continue with saving money statistics that will put us all to shame and make us worry about the future. Then a dose of reality: the rising cost of living and the shrinking buying power of the American paycheck.

Finally, we offer stats on newcomers to the world of personal finance: millennials. How are they getting by? Are they prepared for mortgages and credit cards? What can they reasonably hope for in the future?

Let’s begin.

Staggering Personal Finance Stats

  • 58.1% of millennials have less than $10,000 in savings. 
  • Only 30% of U.S. households have a long-term financial plan.
  • In 2017, the average before-tax household income was $73,753.
  • On average, Americans spend 10.5% of their income on food.
  • Only 24% of millennials show signs of basic financial literacy.
  • Data from 2018 shows that 39% of Americans would have a hard time covering an unexpected cash expense of just $400.

Financial Planning Statistics

1. Only 30% of U.S. households have a long-term financial plan.

(Gallup)

The percentage is better for those with higher incomes. Among households with $75,000 or more in annual income, 43% have long-term plans. Research says that 32% of households create a written or computerized plan to track the expenses, while 24% hire professional financial planners.

2. Households in America with a savings account have a median balance of $7,000.

(Federal Reserve)

In order to understand U.S. retirement stats and other financial realities, it’s necessary to observe the median and not the average balance. Average savings seem high because a small number of very wealthy Americans save a great deal, but the reality is quite different. The median is more representative of the amount most people save.

This statistic is based only on the amounts reported by people who have savings accounts. The number would be much lower if people without savings accounts were assigned a value of $0.

3. 43% of Americans whose childhood homes are in the bottom economic quintile remain there as adults.

(Pew Charitable Trusts)

U.S. financial statistics show that people who are born poor are more likely to remain poor throughout their lives. Only 4% of children born at the bottom rise to the top.

By the same token, 40% of people who are born in the top quintile remain there for the rest of their lives.

This rule is referred to as “stickiness at the ends,” as the people born on both ends are more likely to stay there.

People born in the middle part of the spectrum have a 50-50 chance of ending up in a higher or lower quintile.

4. 84% of Americans have higher family income than their parents did at their age.

(Pew Charitable Trusts)

While 84% is the average, the numbers in these American personal finance statistics are even higher if we focus only on the bottom quintile, where 93% of people manage to financially surpass their parents. In fact, the numbers are higher than average in all four bottom quintiles. In the top quintile only 70% report surpassing their parents’ incomes.

Of course, any rise in income should be mapped against inflation and the rising cost of living. Earning 10% more than your parents did is small comfort if the cost of living has risen 30%.

5. Americans with low levels of financial literacy are late on their mortgage payments 25% of the time.

(Federal Reserve Bank of Atlanta)

On the other hand, people who had a high score when it comes to financial literacy in the U.S. are late only 10% of the time. In addition, 20% of low-scoring individuals have experienced foreclosure compared to only 5% of high-achievers. There is obviously a connection between having knowledge about finances and the ability to deal with debts.

6. In 2017, the average American household’s before-tax income was $73,753.

(United States Bureau of Labor Statistics)

The figure from this official United States financial statistics report is a 1.5% decrease from 2016, when it reached $74,664.

Expenditures have not decreased, but increased. In 2016, the average household’s total expenditures were $57,311. The number rose 4.8% to $60,060 in 2017.

For a family of four in Newark, New Jersey, a household bringing in the national average of $73,753 before taxes would have take-home pay of $59,664 according to Smart Asset’s free Federal Paycheck Calculator. Given average annual expenses that are within a percent or two of the same value, it’s no wonder American families worry about finances.
Statistics about Saving Money

7. 20% of Americans don’t save any part of their annual income.

(Bankrate)

About 1% of people have no declared income. The remaining 19% can’t afford to save or choose not to put anything aside. A slightly higher percentage of respondents (21%) set aside 5% or less of their annual income for a rainy day. Another quarter of surveyed Americans place 6-10% in savings accounts, 11% put away 11-15%, while only 16% save more than 15% of income.

8. 42.3% of Americans have less than $10,000 saved for retirement.

(GoBankingRates)

According to commonsense personal financial statistics, that’s the same as being broke. It is clearly not enough to cover basic living expenses.

At the other end of the scale are 16.5% of survey respondents who said that they managed to save more than $300,000 in hopes of a financially stable retirement.

The average American retirement age is 63 and the average life expectancy of retirees is 79. Experts say a comfortable retirement therefore requires living expenses for at least 16 years. Cost of living depends upon many factors, including location. Using average retiree cost-of-living figures, $1 million in retirement savings will last 16 years or more in 48 U.S. states – assuming a 0% rise in the cost of living.

9. On average, Americans save less than 5% of their income.

(Los Angeles Times)

That’s not nearly enough. Experts suggest saving at least 10% to 15% in order to fund retirement – plus more to cover unexpected expenses during working years. Average retirement savings statistics show that people save a lot less than they did in the past. During the period from 1950 to 2000, Americans saved an average of 9.8% per year, peaking in May 1975 with an astounding 17%.

10. In the period from 2008 to 2018, the total amount saved by Americans has grown by more than 124%.

(ValuePenguin)

Back in 2008, personal savings accounts amounted to $4.1 trillion. That figure grew 29% over the next five years. After another five years, statistics on saving money show that the number has reached $9.2 trillion – an increase of more than 124%.

This doesn’t necessarily mean that people are investing more for retirement. It’s more likely that the top earners are earning more and more every year, and their huge savings accounts are pushing the average upward.

11. Women are less likely than men to have a substantial retirement fund.

(GoBankingRates)

Personal finance statistics from 2018 show that women generally don’t save as much as men. Although about the same number save nothing, differences emerge when we compare the amounts saved. Surveys show that 31.4% of women have saved less than $10,000 for retirement, compared to 26.3% of men. The same gap is evident among top savers. About 19.2% of men have saved more than $300,000 toward retirement, compared to just 13.2% of women.

12. Women’s median savings are less than one-third as much as men’s.

(ValuePenguin)

These figures come from a 2016 Federal Reserve survey that tells us women’s median savings balance is just $2,500 compared to $9,200 for men. The difference is just as dramatic if we take a look at the average balances: $16,986 versus $34,942. These numbers reflect women’s unequal participation in the workforce and exclusion from better-paying jobs.

Cost of Living Statistics

13. 39% of people don’t save anything because their expenses don’t allow it.

(Bankrate)

Living expenses take a huge chunk out of the American household budget. About 20% say they have no savings because there’s no money to save after paying the bills. Another 36% have savings accounts but say they don’t add to them because they can’t afford to or their jobs don’t pay enough. We could add to that figure the 13% of Americans who say they must settle outstanding debts before they begin saving. The bottom line is that more than half of Americans don’t save because they can’t afford to.

Personal finance statistics also tell us that 6% of Americans don’t save because they have no need for it. Good for them.

14. 54% of Americans with only a high-school education aren’t able to come up with $1,000 for sudden expenses.

(Associated Press-NORC Center for Public Affairs Research)

These somewhat bleak results came from an AP-NORC poll of 1,062 American adults.

On the plus side, 58% of college graduates feel confident about coming up with $1,000 in case of an emergency. That is quite a bold statement, considering that two-thirds of Americans who make more than $50,000 say they wouldn’t be able to afford that emergency expense.

15. Personal finance stats from 2018 show that 39% of Americans would have a hard time covering an unexpected cash expense of just $400.

(Federal Reserve)

Some of the most popular methods for coming up with cash include credit card loans and borrowing from friends or family. About 12% of respondents said they wouldn’t be able to cover a $400 expense in any way.

16. 17% of Americans skip dental care due to costs.

(Federal Reserve)

2018 personal budget statistics reveal that 24% of Americans have skipped medical treatments due to personal financial problems. The type of medical service that is most commonly avoided is dental care, with 17% of Americans skipping appointments. Another 12% of people postponed going to regular doctor checkups because they didn’t have the money, and 10% couldn’t afford a prescription medicine.

17. On average, Americans spend 10.5% of their income on food.

(Bureau of Labor Statistics)

Cost-of-living stats tell us that Americans spend nearly $8,000 per person for food each year, counting groceries and meals eaten out. Housing expenses take the biggest chunk with $19,884, followed by transportation at $9,576, and personal insurance and pensions costing $6,771. We spend a lot less on the education (just $1,491), which probably affects our overall financial literacy and money-spending decisions.
Personal Finance for Millennials

18. 58.1% of millennials have less than $10,000 in savings.

(GoBankingRates)

Researchers consider this amount equivalent to bankruptcy because it’s not nearly enough to cover a year’s expenses.

Millennials are far away from retirement and perhaps don’t yet see it as a real problem. Still, this generation is slightly moving forward with 9% of them saving more than $300,000 – a 4% increase from just a year before.

19. Only 24% of millennials show signs of at least basic financial literacy.

(National Endowment for Financial Education)

The biggest money problem facing the millennial generation may be its lack of financial literacy. Researchers say there is a clear gap between what they know and what they think they know about finances. A generous 69% believe they are sufficiently financially literate even though experts conclude that only 24% barely deliver on that promise. Out of that number, only 8% have the high level of financial literacy that is necessary to come out on top in today’s world. Millennials have to deal with a lot of financial obligations, and it doesn’t stop with student loan debt. More than half of millennials (53%) feel they have too much debt.

20. Millennials earn less than Gen-Xers and Baby Boomers did when they were new to their careers.

(Center for Retirement Research at Boston College)

Researchers analyzed millennial income statistics to see how this group earns compared to other generations. The results? Millennials almost always lag behind Generation Z who, in turn, fall behind the Baby Boomers. The difference is pronounced at the age of 30, when the ratio of millennial men’s wages compared to median income is only 90% – compared to 100% for Gen-Xers and 105% for Baby Boomers.

21. At 30, the average millennial is deadline with student loan debt that is about 45% of total income.

(National Endowment for Financial Education)

Personal finance statistics warn us that millennials have a lot more problems with student loan debt than members of other generations. It’s worst for those aged 29 to 31, whose student loans account for 45% of household income. At least in part because of debt and lower income, millennials buy homes and get married later than members of other generations.

Q&A

How many Americans are financially healthy?

A recent study on American financial health revealed that only 28% of people are financially healthy, meaning they are able to cover their expenses, invest in their retirement plans, and contribute to their savings. The same report indicates that 55% of Americans are coping financially, while 17% are considered financially vulnerable.

What’s the average debt of an American?

Research shows that the average debt of an individual in America rose to slightly over $38,000 in 2018, a $1,000 increase from 2017.

How much money does the average American have in the bank?

According to personal finance statistics research, Americans with money in savings have an average of $9,312 in their accounts. The median balance may give a more realistic picture. It’s $2,900.

Sources

Associated Press-NORC Center for Public Affairs Research
Bankrate
Bureau of Labor Statistics
Center for Retirement Research at Boston College
Federal Reserve
Federal Reserve Bank of Atlanta
FinancialHealthNetwork
Gallup
GoBankingRates
Los Angeles Times
National Endowment for Financial Education
Northwestern Mutual
PEW Trusts
Smart Asset
Value Penguin

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