When it comes to how Americans are handling their finances, the numbers are concerning.
For example, the stats aren’t good on saving for retirement or saving for an emergency. The numbers are just as bad when looking at credit card debt and student loans. And let’s not even get started on financial literacy – or the lack thereof. “We really try to avoid scaring people, but I am continually surprised and concerned about some of the statistics,” says Ted Beck, president and CEO of the National Endowment for Financial Education.
Want to avoid becoming a scary personal finance statistic? Good idea. Here are eight troubling money facts – and how to sidestep the quicksand.
Let’s say you had to pay a $1,000 car-repair bill tomorrow. Can’t? You’re not alone. Most Americans couldn’t come up with $1,000 to fund an emergency, including many families who make more than $100,000, according to the study.
But don’t despair. The good news is that even a little bit of savings goes a long way. Just $250 to $749 squirreled away in a savings account can help families avoid eviction, missing housing payments and other financial downfalls, according to an analysis from the Urban Institute. So, start small, and you’ll see a big change in your financial security. That financial cushion will help you weather setbacks while you work on building a true emergency fund of three to six months’ worth of expenses.
Fact: Only 24 percent of millennials demonstrate basic financial literacy, according to a study from the National Endowment for Financial Education.
This statistic is made even more worrying considering that 69 percent of the millennials surveyed rated their financial knowledge highly, according to the study, done in partnership with the Global Financial Literacy Excellence Center at George Washington University.
Learn to recognize – and learn from – your money mistakes. “Personal finance is a trial-and-error exercise,” says Dylan Ross, director of communications and financial planning for the Garrett Planning Network, a group of hourly-based, fee-only financial planners. “If we don’t recognize that we’re making errors first, we won’t get better at it.”
Fact: Among adults who have combined finances in current or previous relationships, 2 out of 5 fess up to committing financial infidelity, according to the National Endowment for Financial Education.
An open and honest attitude toward money is important in any relationship with shared finances. It can ensure that you’re on track to meet financial goals and are sticking to a shared budget. Couples can use myriad strategies to co-manage their money, from joining every single account to managing everything separately.
Some couples find success with combining most things, but agreeing on a no-judgment allowance for discretionary spending. “If it’s important in a relationship that you have separate accounts, or that you want a little spending money that you don’t want to be held accountable for, just set some limits,” Beck says.
Source: https://money.usnews.com