Avoiding Scary Money Facts with your financial institution (2024)

Five Scary Financial Facts

LISTEN TO SAFE 1 TALK WITH THE MONEYWISE GUYS ON THIS TOPIC

While Halloween is meant to be a scary time, handling your finances should not be. Eerily enough, and despite all the information we have as Americans, many of us refrain from taking part in the types of financially sound activities in which we should.

With this is mind, here are five scary financial facts as well as ways to avoid becoming a part.

54% of Americans Live Paycheck to Paycheck

• According to a recent LendingClub survey, more than half of the U.S. population lives paycheck to paycheck.
• 40% of people earning more than $100,000 per year, do the same.

How Can You Help Avoid This?

• Always remember, it is never too late to create a budget and start living within certain restrictions.
• When you create a budget, you know where your money is going.
• In addition to the availability of budgeting apps, there are also debt professionals and debt-relief attorneys whose mission is to assist in such efforts.
• When working with such professionals, debt settlements can be made without doing damage to your credit score.

Paying for an Emergency is Something 61% of Americans Cannot Do

• A recent Bankrate study found more than three out of five Americans are unable to afford a $1,000 emergency.
• This statistic includes families with a household income in excess of $100,000.
• So, when it comes to home repairs or a visit to the doctor, most American would not be able to pay.
• Furthermore, a Federal Reserve study found 37% of Americans lack enough money to cover a $400 emergency expense.
• That means more than one-third of Americans are a single traffic ticket away from their financial house of cards falling.

How Do You Avoid Being a Part of This Statistic?

• The importance of an emergency fund can never be understated or overestimated enough!
• Starting an emergency fund takes conscious effort – it doesn’t just happen!
• Financial experts generally recommend having an emergency fund that is the financial equivalent of six to 12 months living expenses.
• Keep in mind, this is not the financial equivalent of your paycheck for six to 12 months, but rather just living expenses – food, shelter, utilities, etc. (i.e., the basics of life).
• When doing so, here are a few things to keep in mind:
  • Don’t Try to Save Everything at Once. Instead, start small with a specific goal that is measurable and achievable. For some individuals this may be $100, while for others it could be $500. Whatever the amount, be sure it is something you can achieve within 60 days.
  • Once this first goal – whatever it may be – is achieved, quickly add to it! So, $100 may become a new goal of $250 or $500 may become $750, and so on.
  • Pay Yourself First! Be sure to set aside savings at the time you have it, such as when you receive your paycheck. Don’t wait to do this at the end of the paycheck period, as this never works.

Only 24% Of Millennials Have Basic Financial Literacy

• While a National Endowment for Financial Education study found that 69% of Millennials consider themselves to be financially knowledgeable, when tested only 24% showed basic understanding.
• Only 8% of the Millennials tested had what was considered “high” financial knowledge.

If You’re a Millennial, What Can You Do?

• One simple truth is most individuals learn how to handle their finances based upon the practices of their parent(s).
• So, if your parent(s) properly handled their finances, then chances are you have a head start on doing the same.
• However, if the opposite is true then you may have a thing or two to learn.
• Obviously, one hard and painful way to enhance financial literacy is by learning from your mistakes.
• If you prefer an easier and less harmful way of gaining financial literacy, then make a conscious effort to do so.
• Whether it be articles, blogs, or YouTube videos, information abounds to assist you.
• Be sure to also choose a financial partner or partners that provide such assistance to help you on your financial journey.
• Whoever you partner with should provide workshops, information, as well as one-on-one assistance to meet your needs.
• And, as previously noted, having a budget and emergency fund will go far to help you in your efforts.

21% Of Americans Don’t Save Anything from their Income

• CNBC recently reported more than one in five Americans do not save anything from their annual income.
• This lack of saving includes setting funds aside for retirement, financial emergencies, and other financial goals.

How Do You Avoid Being a Part of This Percentage?

• The obvious answer is to start saving, however, here are a few simple ways to do so without creating any major life changes.
  • Start Now – Simply stated, the sooner you start saving the better. And, as previously noted, be sure to properly budget and start an emergency fund as soon as possible.
  • Avoid Impulse Purchases – Slickdeals found that, on average, people spend $3,300 per year on impulse shopping – up 51% from last year.
  • Buy “Generic” – Purchasing “generic” products as opposed to “name brand” allows you to get the same quality at less of a price.
  • Used v. New – Consider this for vehicles, home/office equipment, some types of furniture, etc.
  • Become a Do-It-Yourselfer – House cleaning, yard work, washing the car, painting your home, and other types of home improvement are all perfect examples of how you can save money. And, let’s face it, no one ever does as good a job on what you own as you do!
  • And, let’s not forget, the best things in life – walking, jogging, hiking, playing in the yard, conversation, worship, smiling, etc. – are free!

1 In 3 Americans Have Saved $0 For Retirement

• Given all we know about the importance of starting to save at a young age, the compounding interest of money, etc., it is hard to believe 33% of Americans have saved nothing for their “golden years.”

So What Are you Waiting For?

• Whether you’re just starting out well into your career, get in the habit of contributing to your retirement.
• Even if you start small, do so sooner rather than later.
• And when you do, be sure you include the assistance of a financial planner who can assist you during the process and assess your personal risk tolerance.
• It is also important to Know Your Money Psychology!
• Remember, people who are “ultra conservative” and afraid of losing money also miss opportunities for growth.

Remember, while it is all right for Halloween to be scary your finances should never be. Take heed of the statistics provided above and do what you need to not be a part of them.

Source: https://radicalfire.com/scary-financial-statistics/