50+ Reasons for Money 101: A Collection of Personal Finance Statistics

Adults & Parents

  1. Only 25% of Americans feel that they are well informed about managing their personal finances. (4)
  2. Among parents with children ages five and older, only 26% feel that they’re “well-prepared” to teach their kids about personal finance. (4)
  3. Eighty-percent of parents surveyed feel that schools should teach students basic money management and budgeting skills.  (8)
  4. According to Capital One  (9)  – Over 70 percent of parents say that they have spoken to their teenage children about using credit cards, and yet, less than 44 percent of the children of those respondents indicated that their parents spoke to them about credit cards.
  5. Fifty-four percent of parents rated their teenager’s knowledge of money management as either “good” or “excellent,” but seventy-eight percent of the children of those respondents rated their own knowledge of money management as merely average or even poor.
  6. According to Northwestern Mutual:  (11)
      • Almost half of parents admit that they do not set a good example for their children in how they manage their own finances.
      • Seventy-percent of parents say that young adults feel that they are financially entitled—that is, they expect to have money for whatever they want whenever they need it.
      • Fifty-seven percent of parents say that students on the cusp of adulthood do not understand the value of money.
  7. Total U.S. credit card debt is 866 billion—more than $9,000 per family, up from $2,966 in 1990. (44)
  8. One-in-five workers making $100,000 or more live paycheck to paycheck. (45)

 

Young Adults & Personal Finance

  1. Sixty-four percent of consumers ages 18 to 24 do not know what interest rate they’re paying on their credit card(s).  (13)
  2. According to the JumpStart Coalition for Financial Literacy, only 26% of 13 to 21 year olds surveyed said that their parents taught them how to manage money.  (28)
  3. In a survey by USAA, 86% of teenagers rely on their parents for financial guidance. Meanwhile, 49% of parents say that their own financial knowledge is either “okay” or “terrible.” (40)
  4. In 2003, teenagers spent $175 billion, or $103 per week.  (6)
  5. On average, adolescents spend roughly $264 a month.  (24)
  6. Eleven percent of teens have their own credit card(s). Of these, 10% have access to a parent’s credit card.  (5)
  7. Children’s spending has nearly doubled every 10 years over the past three decades. In 1968, kids between the ages of 4 to 12 spent $2.2 billion. In 1984, this figure swelled to $4.2 billion. By 1994 it exceeded 17.1 billion. In 2002 it topped $25 billion. Kids’ direct buying power is expected to surpass $33 billion by 2006.  (25)
  8. According to Undergraduate Students and Credit Cards, published by Nellie Mae in May 2005:
  • Seventy-six percent of college undergraduates in 2004 began the school year with one or more credit cards.
  • On average, undergraduate credit-card debt in 2004 was $2,169.
  • Undergraduates say that freshman year is typically when students acquire credit cards. Fifty-six percent of undergraduate students obtain their first credit card at age 18.
  • As students progress through school, credit card usage swells. Ninety-one percent of senior-year undergraduate students reported having a credit card, compared to only 42% of freshmen undergraduate students. Fifty-six percent of final year undergraduate students carry four or more credit-cards while only 15% of freshmen undergraduate students reported carrying that many. Undergraduate seniors carry an average balance of $2,864 while undergraduate freshman carry an average balance of $1,585.
  • Undergraduates say that Internet and direct mail solicitations are their primary source for selecting a credit card vendor.
  • Twenty-one percent of undergraduates report paying off their credit card balances in-full each month; 44% say they make more than the minimum payment but generally carry forward a balance; 11% say they make less than the minimum payment each month.
  1. Median student-debt carried by college graduates: $16,432. (39)
  2. Although 80% of college upperclassmen rate themselves as “financially knowledgeable,” many will still make mistakes that could tarnish their credit history. (35)
  3. Thirty-two percent of college students have either missed or been late on a credit-card payment. (35)
  4. Twenty-four percent of college students have bounced a personal check. (35)
  5. Seventeen-percent of college students have received calls from a bill collector. (35)
  6. Maximum debt carried by top 8% of student borrowers: $40,000. (39)
  7. Adults in this country with a net-worth of $1 million or more: 1.2%; high-schoolers who expect to become millionaires by age 40: 39%. (43)
  8. 40% of recent college grads owe more than $10,000. (46)

 

Personal Finance Education

  1. From 2000 to 2002, the number of states with personal finance standards dropped from 40 to 31. (3)
  2. Only seven states (Alabama, Georgia, Idaho, Illinois, Kentucky, New York, and Utah) require students to demonstrate a minimum level of proficiency in personal finance before graduating high school. (3)
  3. In a study analyzing the impact of financial literacy, Annamaria Lusardi (professor of economics at Dartmouth College) and Olivia Mitchell (professor of insurance and risk-management at the University of Pennsylvania) quizzed people on simple calculations such as compound interest and percentages and then compared their knowledge with their net-worth. The findings: More right answers matched up with greater wealth. Those who grasped compound interest, for example, had a median net-worth of $309,000 vs. $116,000 for those who missed the question. (41)

 

U.S. Families

In General

  1. Approximately 40% of families live off 110% of their incomes.  (27)
  2. Eighty-five percent of adults polled feel that young people lack the financial skills required to become financially self-reliant adults. Forty-nine percent of parents say that their children think they are more likely to become millionaires by staring in a reality TV show than by learning how to budget and save.
  3. Seventy-five percent of teens rely on their parents for financial information.  (18)
  4. Twenty-five percent of young adults ages 18 to 24 lived with their parents in 1990. By 2000, this figure increased to 52%. (40)

 Debt

  1.  The average credit card debt for people ages 45 to 64 is $6,094.  (30)
  2.  Seventy-five percent of credit card holders have maxed out at least one credit card in the last year.  (31)
  3.  It can take decades to pay off a $3,000 credit card balance by making only the minimum monthly payment.  (13)

Saving & Investment

  1.  Only 20% of Americans feel confident in their ability to make good investment decisions.  (1)
  2.  Twenty-three percent of Americans have nothing at all saved for long-term goals such as retirement.  (12)
  3. Personal savings as a percentage of personal income declined from 7.5% in the early 1980s to 2.3% in the first 3 quarters of 2003. According to the Bureau of Economic Analysis, personal savings dropped precipitously from there, to a negative 1.5% during the second quarter of 2006.  (21)
  4. American households, on average, have saved only $40,000 for retirement.  (20)
  5. Most Americans think that they’ll be able to retire comfortably, but most aren’t saving nearly enough to meet that goal. Sixty-eight percent of workers are confident that they will have adequate funds for a comfortable retirement. And yet, more than half of those workers have saved less than $25,000 for retirement. Only 20% of Americans have saved $100,000 or more. Only 10% of Americans have amassed retirement savings of $200,000. (34)
  6. Forty-two percent of employees ages 25 to 34 don’t invest in a 401k. (42)
  7. Seventy-two percent of college students have a regular full or part-time job. (10)

Bankruptcies, Defaults, & Foreclosures

  • Personal Bankruptcy filings increased 12.9% in the 12 months ended March 31, 2006. (33)
  • The fastest growing group declaring bankruptcy is young adults, ages 20 to 24. (26)
  • Nearly 2.7 million personal bankruptcies were filed in 2005. (33)
  • This year, more people will file for bankruptcy than will graduate college, and more Americans will file for bankruptcy than will divorce. (17)
  • Over the past decade, personal bankruptcies have nearly doubled. (21)
  • Seventy-percent of Americans live from paycheck to paycheck. (37)
  • From a survey of employees from 1,000 different companies, 28% reported that they are  “one major setback away from financial disaster.” (38)

 

Sources:

 

  1.     Boston Research Group
  2.     NCEE
  3.     NCEE, April 2003, Survey of The States, P14
  4.     FleetBoston
  5.     Teenage Research Unlimited (TRU)
  6.     Teenage Research Unlimited (TRU), Jan 9, 2004
  7.     National Retailers Federation, Jan 28, 2004, Retailers: Attach Bankruptcy Reform to Ag Bill
  8.     George Chamberlin, Oct 15, 2003, “Kids need to learn about money, too”, North Country Times
  9.     Capital One and Consumer Action, Oct 23, 2003, Financial Educational Survey
  10.     Capital One, July 29, 2003, Third Annual Back-to School Survey
  11.     Northwestern Mutual, October 2003, “Teaching Kids About Money” Parent Survey Summary
  12.     Northwestern Mutual, 2000, “Money Maladies”
  13.     My Vesta Organization
  14.     Consumer Bankers Association (CBA), April 14, 2003, CBA’s 2003 Financial Literacy Survey
  15.     Nellie Mae, April 2002, Undergraduate Students and Credit Cards, P1, 2
  16.     Nellie Mae, February 6, 2003, College on Credit: How Borrowers Perceive their Education Debt, Page v, vi, 1, 29
  17.     Natalie Ghidotti, Feb 2004, “In too deep”, Little Rock Family, P9
  18.     Visa USA
  19.     Harvard University, 2001, 2001 Consumer Bankruptcy Project
  20.     Merrill Lynch, August 2003, Retirement Preparedness Survey
  21.     Senator Alaska
  22.     Harris Interactive
  23.     MarketResearch.com
  24.     Coinstar, Inc.
  25.     Packaged Facts, 2002, The U.S. Kids Market
  26.     Alejandro Cabezut, Jan 25, 2004, Laredo Morning Times
  27.     The Observer; Jan 12, 2004
  28.     Dr. Lewis Mandell
  29.     Steven N. Taieb, Esq., Bottom Line-Personal, Nov 1, 2003
  30.     Steven N. Taieb, Esq., Bottom Line-Personal, Nov 1, 2003
  31.     Summit Daily News, Oct 23 2003
  32.     Stanley H. Breitbard, Journal of accountancy, Dec 2003
  33.     http://www.bankruptcyaction.com/USbankstats.htm
  34.     Kron4 TV’s Rob Black & Your Money, 4/5/06
  35.     BusinessWeek; June 27, 2005
  36.     Personal finance expert and author, David Bach
  37.     ComPsych; an Chicago employee assistance company
  38.     Money Magazine; Sept. 2006
  39.     Kiplinger; October 2006 pg. 65
  40.     Money Magazine; October 2006 pg. 37
  41.     Money Magazine; October 2006, pg. 126
  42.     Vanguard
  43.     Money Magazine; December 2006, pg. 32
  44.     Kiplinger June 2007, pg. 24
  45.     Careerbuilder.com
  46.     Harris Interactive Study

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