Survey Shows Americans’ Struggle With Debt, Savings

MINNEAPOLIS (WCCO) — A new survey by 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.” 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. recommends stockpiling six months’ worth of emergency savings. Read more about their survey here.

  • Citizen

    “Hoffman says the bottom line comes down to living within your means.”
    Nothing more needs to be said.

  • Al

    To Citizen: Amen to that!!!

  • DontTread

    I always found it interesting how those who are so adamant about letting the gov’t hand out services and pay their way as much as possible are also the ones with the biggest debt burdens and smallest safety nets.

  • Bill Reilly

    “one in four Americans have more credit card debt than emergency savings. ”

    Let me guess, this is the group of people that think Obama is doing a good job.

  • Ace

    Maybe Rachael of Credit card Services will call them and offer to reduce their interest rates

  • Ashathomas

    1. You should open a Roth IRA and start nittupg 5% of your GROSS salary in there every month. Open one at Fidelity or Vanguard (or wherever) and automatically contribute 5% of your pay to a Target Retirement fund. These tax advantaged savings are awesome for retirement saving plus with a Roth you can always take your contributions back out penalty/tax free (just don’t take out any earnings on those contributions unless it’s for college tuition or your first home or you’ll pay a penalty). 2. Simultaneously you should put 10% of your gross income towards paying off debt. Plus put 100% of your bonuses towards this. No point in paying interest when you don’t have to. Tackle the highest rated debt first and work your way down. Don’t worry too much about an emergency fund/savings for now focus on paying off debt. You can always use your credit cards if a true emergency comes up; that’s why you need to make sure they’re never maxed out. 3. Once you have your debt paid off (and I mean all of it, unless some of it is at rates less than 6%), you should boost retirement savings to 10% of your income. Another 5% should go towards cash savings. Plus you should put all bonuses in this account. Open a high yield savings account (emigrantdirect/ing direct) and transfer 5% automatically each month. Once you have a few grand in your savings account for emergencies, keep contributing. The excess can be for unexpected/irregular expenses like vacations, gift giving, annual insurance premiums, etc. 4. Once you have $5000 or however much you need for emergencies+unexpected expenses, you should open a separate account designated for a specific savings goal like closing costs and a downpayment on a house.References : banker

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