Americans and Financial Planning
Planning for your financial future should not be something that is an afterthought. For many Americans, the reality of the situation is they are in debt, and that means their future is not assured. The average household with a mortgage apparently owes $172,806, while credit card debt is even scarier. At least with a home you have equity and the possibility of the property appreciating over time, while credit card debt is just that, debt with an interest payment attached to it. The average household that carries credit card balances owes $16,061, and the average household with car loans owes $28,535. Staggering stuff when you think that some of the debt could have been avoidable or at least lessened by smart planning.
Unfortunately, it seems that many American families are not taking control of the situation, and this could leave them in trouble later on in life. Only 30% of Americans have a long-term financial plan that includes savings and investment goals, and only about one third of Americans (32%) maintain a household budget.
A basic budget is the foundation of setting up adequate financial planning. If you have no budget, there is no way of making sure that things that are needed get paid for, and there is no certainty in just spending and hoping for the best. If you do not know how much you need every month and every year, how can you plan for it in the future? Forty-nine percent of Americans are “concerned, anxious, or fearful” about their current financial security and well-being. It is no wonder that they are worried about it as 19% of us have nothing saved to cover emergency expenses. Nothing…zero dollars, a frightening set of circumstances.
Thirty-one percent have less than $500 saved, which in case of an emergency like a hospital visit or not being able to work for a month due to an accident or illness, will certainly not be enough to get by.
Saving now for the future could mean the difference between feeling safe and secure in your later life or being consistently worried about what will be next. Financial planning and budgeting correctly is the best way to try and ensure financial stability and longevity.
IMPORTANT DISCLOSURES
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
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David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC