Our finances may be on shaky ground.
At least according to financial institution Primerica, which on Wednesday released a survey of 1,000 middle-income Americans (with household income maxing out at $106,000), which revealed that most of us are far behind where we should be financially.
Indeed, when asked whether or not they engage in the following five financial preparedness basics, only about one in 10 engaged in them all.
1. Making more than the minimum payment on credit card bills every month;
2. Having $50,000 or more in life insurance coverage;
3. Saving some money every month;
4. Investing some of their money in accounts outside traditional savings accounts;
5. Having enough savings to cover three months of expenses if the primary breadwinner loses his or her job.
Nearly seven in 10 of us, in fact, got a ‘C’ or lower.
Grade Percent of population answering “yes” A = All 5 10% B = 4 21% C = 3 26% D = 2 20% F = 1 23%
* Source: Primerica; percentages rounded to nearest whole number.
Of course, it’s important to point out that not everyone needs life insurance — if you don’t have any dependents or people who might need that money if you passed away, there may be no need. And if you have high-interest debt, it’s probably more prudent to pay that down rather than put the money into savings each month.
Still, these findings mirror other findings that show just how troubling America’s financial situation really is.
First up, our massive unpaid credit card bill: The average credit card balance is now $5,736, up more than 7% in the past three years. And the total amount of unpaid revolving debt (this is usually credit card debt) hit a record $1.044 trillion at the end of 2018, according to the Federal Reserve.
Couple that with our lack of emergency savings and an even more stark picture arises: Only four in 10 Americans have enough in savings to pay for a $1,000 unexpected expense, according to a Bankrate survey released this year.
What’s more, another Bankrate survey from this year found that only 44% of households have more money in emergency savings than what they owe in credit card debt — down from 58% last year and “the lowest amount in Bankrate’s nine years of conducting the survey.”
Retirement saving amounts aren’t so great either. Nearly half of families have nothing saved for retirement.
Plus, we’re often underinsured, which could imperil loved ones or wipe out people’s savings if they even had savings. More than one in 10 Americans ages 19-64 don’t have enough health insurance. And only about 60% of households have life insurance — and many of those don’t have enough.
