12 Urgent Financial Planning Statistics in 2023

Many people are confronted with personal money difficulties.

It pains me to hear it, but it certainly appears to be the case.

It’s something that must be treated seriously, not glossed over. The worse the problem gets when we brush off and ignore household finance issues, the more we ignore them. There’s a high likelihood that you know someone unable to pay their bills, decrease their expenses, or advance their career because they’re in a financial bind.

The distinction between struggling and those who are financially secure mostly comes down to a few factors: planning, resourcefulness, and literacy.

Unfortunately, the majority of Americans remain ignorant on all three fronts.

To paint a vivid picture of the state of illiteracy and the terrible situation that families are in, we compiled a list of pertinent statistics.

The following are 12 personal financial planning statistics and facts that convey how dire things have gotten in money management throughout the world.

Key facts about financial planning statistics 

• According to a recent poll, almost 69% of households have no emergency funds.
• Over half of all Americans, or 34%, have no savings.
• The %age of young people who have no savings for retirement is over 66%.
• According to a recent poll, only 72% of households have a document outlining their financial planning strategy.
• The %age of millennials with no medical insurance is 84%.
• According to a survey by the New York Federal Reserve, more than 44.7 million Americans owe money to educational institutions.
• According to a recent report, about 43% of student borrowers are not making their payments on time.

12 Life-Altering Financial Planning Statistics

1. The majority of millennials, 69%, are not saving enough

This may not seem significant in your 20s, especially when you’re just starting to save. But don’t be fooled for a single second.

• Your current savings are an essential factor in your financial success, notably your anticipated retirement age.
• That is, if you ask them to describe their ideal job based on the statement above, most of them will have to choose one of three alternatives:
• Increasing the amount of money that has to be saved or reducing their standard of living during their retirement years reduces the amount of stress they’ll experience.

It may come together of all three in the worst-case scenario. This is why it’s critical to save early and often and pay yourself first. It might be helpful to figure out how much you should be saving. Use our free retirement calculator to determine how much you’ll need to save and how you can boost your retirement prospects immediately.

2. According to a recent poll, 69% of households have no emergency savings

According to numerous sources, including Forbes and the Associated Press, only 29% of individuals in the United States have a financial cushion greater than $500.

This statistic shows how serious personal finance is across the United States in today’s climate. According to the Survey of Consumer Finances, consumer savings rates have remained essentially unchanged since the Great Recession.

In other words, most Americans are not saving enough to safeguard themselves in a financial catastrophe.

Unfortunately, two of COVID-19’s major lessons are that you can never be too prepared and that there is no such thing as having “too much” in your emergency fund.

3. Almost half of all Americans, 34%, have no savings

If you thought the preceding statistic was terrible, this one might shock you. More than 100 million people in the United States—34% of all Americans—have no savings. Can you fathom how daunting it would be to cover an unanticipated medical expenditure, or if your pet became ill and you were forced to go to the veterinarian?

Alternatively, what if your car broke down and you needed to hire a tow truck?

The sad fact for the majority is that they rely on credit card usage, take on additional debt, and put themselves in a worse financial position. Using debt repayment software might assist you in paying off your debts and preparing for the future. There are two distinct types of financial planning: retirement and long-term investing.

Most investors, even seasoned ones, seldom look at their investments the same way twice. An emergency fund is intended to provide self-insurance and reduce the risks of costs associated with financial emergencies.

To learn how much you’ll need for your emergency fund, create a free financial plan.

4. 66% of millennials have zero retirement savings

Unfortunately, the vast majority of Americans are operating on a tight budget.

It may appear challenging to start investing when you need to pay for necessities and debt obligations. That is one aspect of the subject. The second reason is that many millennials are delaying retirement savings and investments. The major reason? Because they believe they have enough time to save before it’s too late.

However, when preparing for retirement, saving, and investing, you can never be too prepared. Because the cost of living increases, it’s more important than ever to start saving as soon as possible.

The sooner you begin and the more money you save every month, the better off you’ll be. When you consider that we are now living longer and that healthcare costs continue to rise year over year, pensions are no longer an option. The Social Security trust fund will be depleted by 2034, resulting in reduced payments for beneficiaries; this is even more crucial.

5. 72% of households do not have a written financial planning statistics

The first step in saving money is having a financial plan, which means that only 28% of American homes currently have one.

We conducted our research at Savology and discovered that households with a financial plan are 2.5 times more likely to save enough for retirement.

So wouldn’t you invest a little of your time, even if it’s just 5 minutes, knowing that you could double your chances of success?

After one year, the %age of individuals who set financial objectives feel better about their money is 83%. Finding the motivation to handle your finances might be challenging at times. It’s a strenuous activity, but when you have confidence, drive, and start feeling better about your financial position, it can have a beneficial compounding effect.

One of the immediate advantages you reap from developing and maintaining a financial plan is feeling more comfortable about your circumstances. And it makes perfect sense.

You won’t be able to make easy decisions if you don’t have a proper plan in place. Your strategy eliminates the uncertainty, boosts your confidence, and serves as a source of inspiration.

6. Only 2.5 % of households employ 529 college savings accounts

I was surprised to learn that just 2.5 % of all households in the United States use 529 plans for their children’s education. When you consider how many people are getting a college education, this is a meager figure. This implies that the great majority of individuals are not utilizing the advantages of 529 plans. Many parents are unaware of these benefits. They may get caught in a web of debt that they can’t seem to crawl out of, which leaves them with few options for financing college and other education expenses. Unfortunately, it implies that parents are missing out on thousands of dollars in tax credits by not taking advantage of these programs. On the one hand, it also implies that millions of freshly graduated college students with substantial student debts seek debt management solutions.

7. 84% of millennials are underinsured 

Only 16% of millennials have enough insurance to safeguard themselves, their financial assets, and their family’s financial plan. The remaining 84% are underinsured, implying they are not adequately protecting their financial security and future. Life insurance, especially life insurance, might be viewed as an odd member of the financial family. It’s one of the most critical aspects of your plan, though. We also discovered that 66 % of millennials don’t have enough life insurance to protect their families adequately. Insurance may be complicated for most people because they may not see why they require it until it’s too late.

The first and most important thing to consider is that you aren’t indestructible. Second, your premiums will only rise as you age and exhibit symptoms of illness. Sometimes getting insurance early on, such as life insurance or disability insurance, can be a good idea if it helps you lock in rates. Right now, create your free financial plan to see how much coverage you’ll need to safeguard your financial stability.

8. 38% of households have revolving credit card debt

Revolving debt is far more harmful to your financial well-being and maybe emotionally stressful. According to this data, the majority of these households are unaware of the fees and interest they’re presently paying or of the options available to help them reduce their spending. For most people, credit card debt has become a way of life. Many families are not appropriately using credit cards.

In most situations, it’s advisable to plan your debts. The Savvy Debt Payoff App is a financial tool that maps out a debt-payment strategy for you by showing you how much you should be paying each month. You may learn how to save thousands of dollars that would have otherwise gone straight toward interest by doing this.

9. 100 million Americans have outstanding auto loans

Around $1.3 trillion in auto loans are owed by Americans collectively. What’s more, where are these people leaving money on the table? Did you know that more than 47 % of Americans refinance their mortgage, but only 5 % opt to refinance their automobile loans?

Having a vehicle may be considered necessary depending on your lifestyle, but it does not imply you should be trapped paying more than you have to. Consider using an auto loan refinance calculator to save hundreds, if not thousands of dollars, and put it towards a different purpose.

10. 44.7 million Americans have outstanding student debts

That is correct; close to 45 million Americans have student loans they cannot payback. The average student loan debt in the United States is more than $32,000, and it totals $1.56 trillion across the country. Yes, it’s a significant number. In the United States, $1.4 trillion in student loan debt is the second-largest debt, surpassing auto loans and credit card bills.

11. 43% of student borrowers aren’t making their payments

According to a recent study, student debt is taking a severe toll on families. Even graduates who graduated years ago have difficulties making student loan payments. It’s no surprise when you consider that 78% of Americans are living from paycheque to paycheque. When you combine student loan debts with other consumer liabilities, such as automobile loans and mortgage obligations, the picture doesn’t look good. Because of these bills, most families are unable to invest adequately for their retirement or establish an adequate emergency fund. When people take on too much debt, they find themselves in a dire situation: bankruptcy. A bankruptcy means test may be helpful for individuals who require additional support planning ahead.

12. 76% of millennials are not financially literate 

Finally, let’s discuss financial literacy. This is the last one we’ll talk about because it significantly influences the previous 11 facts. It’s an easy case to make that a lack of financial literacy causes poor financial habits and decisions.

We spend hours in other categories, despite neglecting to devote the necessary time and effort to improve our financial literacy. The figures from above provide a clear image of the need to reorder your priorities so you can focus on enhancing your financial literacy.

Pay attention to the financial planning statistics

You don’t have to be afraid of these numbers.

The goal isn’t to frighten you; instead, it’s to offer information about the condition of personal finances across the country. When we examine all of these figures together, it becomes apparent that they are interconnected and influence various other crucial aspects of your financial life.

This is why financial literacy and financial planning are essential for your money’s success.

Focus on your plan and let it guide you through your financial decisions if you feel overwhelmed by your present circumstances or are optimistic about the future.

Conclusion

Financial planning statistics are a great way to understand the importance of financial planning and how it can benefit you. By understanding these statistics, you may be more likely to seek out professional help for your finances. Working with a financial planner can help you make intelligent decisions with your money and reach your long-term financial goals. Have you ever used financial planning statistics to make better choices about your money?

If not, why not give it a try today?

Statistics for this article were gathered from the following sources:

• Associated Press-NORC Center for Public Affairs Research
• Light Finance
• Center for Retirement Research at Boston College
• FinancialHealthNetwork
• Los Angeles Times
• PEW Trusts
• Bankrate
• Federal Reserve Bank of Atlanta
• GoBankingRates
• Northwestern Mutual