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How Bad Are Americans With Their Money?

Updated: Nov 4, 2019

In 2010, during the Great Recession following the housing crash, President Obama officially designated April as Financial Literacy Month. Paradigm Learning focuses on business acumen, an in-depth understanding of how a business works, how it makes money, and how strategies and decisions impact financial, operational, and sales results. They've written dozens of blogs and whitepapers on the subject. In honor of Financial Literacy Month, let's switch gears from business finance and strategy to personal finance.

First, let’s get an idea of how well Americans handle their money:

  • Emergency savings: More than half of Americans have less than $1,000 in savings. General guidelines suggest having 3-6 months of expenses saved. (source)

  • Credit cards: 21% of Americans have more credit card debt than emergency savings. Overall, 38% of Americans have credit card debt, with an average balance of $16,048. (source)

  • Student loans: 65% of seniors graduating in 2017 had student loan debt and the average debt was $28,650 (source). Of all student loan holders, 43% are not making payments. (source)

  • Car Loans: Auto loans are becoming an increasing percentage of American debt, up to 8%. Average payments ($580 new, $381 used), loan amount (almost $30,000), and loan terms (68.5 months) are all increasing as well. (source)

  • Retirement: One-third of Americans have nothing saved for retirement. A little more than half (56%) have less than $10,000 saved. These are sobering statistics when you consider you may need about $2 million to retire. (source)

On the bright side, personal finance information is more freely available and accessible than ever before. It’s never been easier to educate yourself about money. Here are a few specific options:

Listen to podcasts. I can personally recommend the BiggerPockets Money podcast. Dave Ramsey has another popular one.

Read some books. Here are 5 of my favorites:

  1. The Richest Man in Babylon by George S. Clason

  2. Rich Dad Poor Dad by Robert T. Kiyosaki

  3. The Millionaire Next Door by Dr. Thomas J. Stanley and Dr. William D. Danko

  4. Set for Life by Scott Trench

  5. Your Money or Your Life by Vicki Robin

Read blogs, like Mr. Money Mustache.

Subscribe to Money Magazine.

Regardless of our individual financial situations, we all can work together to spread the word about the importance of financial literacy. Millennials are already falling behind on retirement savings. Increasing numbers of American seniors are living in poverty. Education is the first step to slowing these frightening trends.

Do you have a podcast, book, blog, or other recommendations for personal finance education?

November 2019 update: you can no longer subscribe to Money Magazine.

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