A post over at Good Financial Cents this week, “Why You Might Not Want to be an “Average” American” by Miranda Marquit pointed to some “average” U.S. statistics that you should probably strive to be better than:

  •  “the average household credit card debt was $7,149” – Certainly not insurmountable, but with credit card interest rates typically high, carrying that amount of debt on credit cards can lead to large monthly payments. It also can mean many years of paying it down, assuming of course, that you aren’t adding new debt in the meantime.
  •  The average indebted household debt (this doesn’t include the mortgage) was $15,325” – More than double that of the average credit card debt. We would guess that in many cases, this would include debt for a car. Monthly payments on debt this size could be crippling to your finances, especially for lower income families, making it even more difficult to get out from under.
  •  “the savings rate at the end of September 2012 was 3.30%” – This amount wouldn’t even be enough to fund an emergency fund for many families, let alone allow them to save for other necessities and goals. It wouldn’t be unthinkable to say this savings rate is likely why the average debt is so high—when emergencies or other needs and wants pop up, families just don’t have enough cash saved to cover them, so they turn to their credit cards.
  • “According to the Social Security Bulletin, only about 1/3 of people aged 65 and older has an IRA or a 401(k)” – Since Social Security is often not enough to cover people’s retirement expenses, retirement funds are relied upon to cover the gap. However, for those who have no retirement funds, they have no choice but to make do. And with the savings rate so low, it unlikely they have funds elsewhere to turn to.
  •  “Those in the younger age bracket of 18 to 34 aren’t really saving, either: 56% are not saving at all” (referring to retirement) – These years are the best time to get started saving for retirement. Even though it is often the case that you will be making less during these years than later in your career, you will likely have less financial commitments. Maybe you haven’t bought a house yet, haven’t gotten married yet, or haven’t had kids. So, putting money aside may not hurt as badly as when you do these things. Unfortunately, the idea of “I have plenty of time” gets to many people. By the time you realize you need to get serious about retirement, it may be too late for you to make up the ground you lost during these years.

Obviously these statistics don’t tell the whole story. There are always mitigating circumstances: illness, job loss, disability, etc. However, the earlier you start taking these “averages” seriously, the better off you’ll be down the road.

 

  • Disclaimer: The information on this blog is not meant for specific financial advice. The ideas/opinions stated are not suited for everyone, and readers should use their own judgment in applying them in their financial lives.
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