Survey Shows Americans’ Struggle With Debt, Savings
MINNEAPOLIS (WCCO) — A new survey by Bankrate.com shows a slight silver lining when it comes to our financial health, but reveals some problems, too.
A poll of more than 1,000 Americans shows that 54 percent have more savings than credit card debt, but one in four Americans have more credit card debt than emergency savings. The study says 16 percent have neither credit card debt nor emergency savings.
The results also showed that parents are the most likely to have more credit card debt than emergency savings. And overall, the survey reveals many Americans are living on the edge without a safety net, with 40% of people admitted they are one emergency away from financial crisis.
Rashad Butler, an assistant manager at a Minneapolis Jazz Club, is among them after a painful detour in debt while trying to make it as an artist.
“I had no safety net, no foundation, so what I have now is all I have,” said Butler, who says he is undergoing debt counseling. “I am really trying to avoid bankruptcy, just out of pride I’d say.”
Bankrate.com says those likely to have neither credit card debt nor emergency savings are households with income of less than $30,000 per year, those with a high school education or less and the unemployed.
Households with income of $75,000 or more per year, college graduates and retirees are the most likely to have more in emergency savings than credit card debt.
Savings is a slow trend, although on the uptick, according to John Hoffman. He founded Consumer Credit of Minnesota, a non-profit rescuing people out of credit crisis.
“First thing I would say is sit down and do a budget. Take a sincere look at the money you have coming in, and then second part, look at your pattern of spending,” said Hoffman.
Hoffman says the bottom line comes down to living within your means. Hoffman tells his consumer credit clients to put 5 percent to 9 percent of their take home pay into a savings account, and also advises credit card customers to pay the same amount each month, and more than the minimum payment.
Last, Hoffman says keep a journal of your spending.
“If I am using this credit card to get miles, OK fine, but if I am using it to live above where I am at, then I am not so OK with that,” he said.
Bankrate.com recommends stockpiling six months’ worth of emergency savings. Read more about their survey here.