It’s Financial Literacy Month and we at Go Banking Rates are working to educate Americans on how to improve their financial savvy so they can get smarter and grow richer. To kick things off, we created this infographic — the Balance Sheet for the American Family. After all, how can you get your financial house in order if you don’t know what’s wrong to begin with?
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Americans Aren’t Planning for the Future
The data shows that one area where Americans need to seriously improve their financial knowledge is retirement planning. More than 1/3 of Americans aren’t contributing any money to retirement funds like 401(k) plans or IRAs. Once they do retire, these people rely solely on Social Security for income.
More than half of today’s retirees have less than $25,000 in savings. That means that if they face major unexpected expenses such as a large medical bill, senior citizens will rely on more state-provided aid to foot the bill, like Medicare and Medi-Cal.
But the lack of a nest egg doesn’t just apply to our seniors. It turns out that the majority of Americans lack an emergency fund of $25,000 in savings.
The Average Credit Score is 691
If you had to guess, would you think the average American had a credit score in the “Good” range? Well, they do! If our consumer-centric culture is good for anything, it means that Americans are in a long-term relationship with credit in all its forms: mortgages, auto loans, student loans, and credit cards. A long history of taking out loans and paying them back results in a high credit score.
The downside to all this consumption is, of course, debt. The average American doesn’t pay his or her credit cards off in full each month, and instead carries a balance of nearly $8,000. Unfortunately, crushing debt often leads to bankruptcy. In 2010, at the height of the economic crisis, about 1 in 160 Americans had filed bankruptcy in his or her lifetime.
Educate Yourself and Grow Richer
We all want to reverse the alarming statistics around bankruptcy, debt, and retirement. Financial Literacy Month is the perfect time to get involved! Join our movement, make the pledge to become financially literate, and don’t forget to take our quiz to see how you measure up.
This article is part of the Go Banking Rates Financial Literacy Movement, helping Americans get smarter and grow richer. Take our credit card quiz to test how knowledgeable you are!
Provided by Go Banking Rates