Americans seem to be increasingly unaware of just how bad things can get when it comes to basic financial security. Just one in 10 were able to score an A on a financial security test. How would you fare? Are you financially secure?
As a nation, our finances are in messy and downright scary. The statistics say 78% of Americans live paycheck to paycheck while 40% could not cover a $400 emergency without borrowing money and going further into debt. And a set of newer data suggests things could be even worse now.
https://www.shtfplan.com/headline-news/new-statistics-show-just-how-tight-most-americans-finances-have-become_05232018
According to the financial institution Primerica, most of us are far behind where we should be financially considering our incomes. Primerica released a survey of 1,000 middle-income Americans whose household income maxed out at $106,000. According to Market Watch‘s report on the survey, when asked whether or not they engage in the five financial preparedness basics, only about one in 10 engaged in them all.
The 5 basic financial preparedness basics are:
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.
Seven in 10 Americans scored a C or lower which means they are doing 1 to 3 of the 5 things necessary to gain financial security. These findings shine even more light on some other points of data that show just how troubling America’s financial situation really is. We are a nation of over spenders and debtors. This mentality will not work well when another recession hits, however.
One major problem is 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. 37 million credit card accounts are in serious delinquency. 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. And only 44% of U.S. households have more money in an emergency savings fund than what they owe in credit card debt. That’s down from 58% last year and “the lowest amount in Bankrate’s nine years of conducting the survey.”
The average car payment rose to $530 per month in 2018 sucking a good chunk of money from Americans paychecks. And many make payments on two cars.
The key to financial security is simple: live on less than you make. A shift in mindset is all it takes, and although difficult, it’s worth it!
Not a test, more common sense than anything. FYI, I got an A on this one.
I score 4 out of the 5 with the Life Insurance coverage not applicable (no dependents). I also get an ‘A’.
Grade: A, way to go!!
A+ here.
People by home insurance also, but how many claims have you filed in the last 50 years..??
I asked my mother that question when she insisted I get home insurance. So I asked her when was the last time she filed a home insurance claim. Her response was dead silence, you could hear crickets. Its a waste of money, I never filed a single claim in 30 years and after a dozen hurricanes. I just live a smart lifestyle and make sure your house wiring is done my a licensed electrician. And have plenty of smoke alarms and fire extinguishers handy to handle your own emergency.
Live Free Off the Grid!!
More importantly are you food secure. Or are you in a state of food insecurity?
Make sure your house wiring is done my a competent electrician.
#2 is horse shit!
Here is my 5.
#1 Pay off all credit cards every month.
#2 If and only if you are in debt, have sufficient insurance or funds to pay any debts your survivors may be responsible for
in the event of your death.
#3 Save a minimum of 10% of your income every month.
#4 Investing some money in accounts outside traditional savings accounts.
#5 Have stashed away a minimum of one year of expenses in the event you lose your job.
I’m old and retired and go by a different set of rules now, but these rules are ones I went by when I was younger and pretty much had this all covered by age 30.
Agreed on #2. Life insurance is bullshit.
My top five for economic freedom:
1) no credit cards… they are no linger needed now that we have debit MasterCard.
2) Paid off mortgage, no house note.
3) paid off cars, no car note.
4) fat stack of cash, gold and sliver in the safe at home, not in a bank that may or may not have it available.
5) internet connection so I can waste all day goofing off on this web site.
cash? that is gold and silver coins. . .are you referring to this fiat caca as “money”? American money has the same status as Zimbabawe “money”. . .RU suggesting that this (((filth))) should actually be saved?
Grade: A++, way to go!!
#5, EXCELLENT
Grade: A++, way to go!!
#5 that’s the life, EXCELLENT,
#1 pay off all credit cards every month. Use them just enough to keep a credit score in existence
#2 no dependents. Fuck it.
#3 trying but with the medical expenses… I’m probably barely breaking 10% all at once with the tax refund but that’s about it
#4 define what this means. I haven’t been in a position to do this in basically ever. I may be in the near future. You talking mutual funds?
#5 Five to six years worth. At least there’s that. Not spending it down either. May start shoveling it into #4 but I’m very inexperienced at this.
CAR NOTE? BAHAHA what? My last car cost $400. Just replaced the oil pan because prior owner took it to f*%&#^% Jiffy Lube (or equivalent) regularly and they always strip out the drain pan bolt hole sooner or later. I know, it takes a monkey to strip that out but there you are…
78% of Americans live paycheck to paycheck
That number seems low. I bet it is more like 95%.
#6 – give some of your $ to others, every month, who are in need, while teaching them the basics on the List (or your modification of it) so they can become whole in this area.
Ideally, as they move into a more stable place then can repeat what you did.
Start with Family – usually candidates are close by…
Yeah, it is idealistic, but give it a try if you don’t do it already.
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. . .give some of your $ to other Whites, every month, who are in need. . .
Maffs is too hard for most to figure out a budget.
Moral of the story? Don’t be poor.
A here….wife is our accountant. Came home one night with candles and wine on the dining table and I thought uh oh,what did I forget now? she said honey…I paid off the mortgage early. Been breathing easy ever since then. She is tight with a dollar. She didn’t care much for the prepper mentality but she has been holding her end while I’ve been stocking up.
No insurance. I even turned down Medicare part B. Im leaving my Heirs paid for land that’s enuff. Im not a fan of insurance companys. Insurance companys always try and weasel their way out of paying off. They are crooks liars and deadbeats.
Old Guy, We are still too young for medicare but I have a question for you. Looking at your post can they attach your property for medicare payments? If so, is it part B? Thanks.
When I turned 65 they sent me a letter informing me that they where going to deduct a sizeable amount of my Ponzi check to pay for Medicare Part B. I has to go to the social security office in person to turn it down. They would not let me turn down part A because they said it was Free? I told the clerk I didn’t want nothing that was free. It didn’t register with her. Medicare will not pay 100% of any medical bills. The patients must pay a share usually 20%. No one can arbitrarily attach your property. They have to take you to court and get a Judges order to place a judgement on you. That judgement is recorded at the courthouse. If you try and sell land you have to pay the judgement from the proceeds.
There is a medicare and medicaid recovery process in the event your care such as a nursing home is being paid either in whole or partially by the government.
A veteran or the spouse of a veteran can receive up to 1500 dollars per month towards nursing home care.
This is a little known program and it takes a while to get through the paperwork .
George,
Do you have details, on the “up to $1500 per month”?
I’m enrolled in VA medical and was aware they pay for some nursing home care, but wasn’t aware my spouse was also covered.
Thanks.
Safe in the arms of God
Did you eat the wrong mushrooms?
When someone goes into a nursing home. quite often medicare and insurance cant cover the expence. Then the DHS covers the bill. The DHS thru a court order or the consent of a guardian or other responsible party places a lien on the real property. Many times the lien is more than the value of the property. and the DHS doesn’t go after the estate. and the places just set abandoned. and many times the taxes are not paid and ownership reverts to a state agency. and it never sells because the DHS lien is still in place.
Those nursing homes will take every bit of it….
Life insurance…?? If yur spouse croaks the gubmint gives ya $200…ain’t that nuff?? Crap, if I go first, they’re in good shape. Overall, A+, now that I’m in my 60’s and finally got smart about finances.
Well, lessee…
1. I don’t have a credit card.
2. No wife, no kids, no debts, why bother?
3. Well, sure.
4. If you count buying silver as “outside savings,” then yes.
5. Well beyond.
I guess I passed?
Same here except the life insurance.
Enough food storage for a very long time…
Silver…check
Cash enuff on hand for six months vig, without touching the silver.
Been unemployed for going on five years too. Careless driver took care of disabling me… Florida no fault insured that I got screwed for a settlement too.
If I can be self sufficient then anybody should be too !
Home is payed off, no vehicle payment, no credit card debt, several passive sources of income. Life insurance that my wife made me get when I bought a motorcycle. I’m what most of the experts would consider “low income”, but I’ve done more with less than most folks have.
I would suggest that grade inflation is in effect.
Pass everything on that list?
C-minus
That is not even close to financial preparedness