Hey hey! So my plan to hit you with that awesome savings account I hinted at on Monday will have to wait some more (couldn’t get my act together – sorry!), but I promise we’ll be back to the saving obsession here shortly, particularly after reading these crazy stats I’m about to share with y’all today.
I always know it’s time to share them when multiple people at once send them to me in hopes of a good gawking session ;) Which is then followed by a good cry when you realize just how bad people are struggling out there, ugh….
HURRY UP AND FIND OUR $$$ BLOGS, ALREADY!!!
WE HAVE LOTS OF FUN HERE, I PROMISE!
Let’s get started… brace yourself.
“1 in 3 Americans can’t come up with $2,000”
This comes from a new study released by The New York Fed I caught over on Yahoo! Finance, and what makes it REALLY scary isn’t that people don’t have it in their savings (which we already know), but that they can’t even *access* it through credit! Can you imagine not being able to even throw it on a credit card if an emergency came up? Sad sad stuff…
Yahoo went on to say:
“One-third of Americans would not be able to handle a $100 medical bill without going into debt.”
Double frowny face :( :( Just $100, man… makes you feel SO FORTUNATE doesn’t it?? I’m pretty sure most of us reading this right now can come up with $100 without going into debt… $hit – I just spent $110 on two old bills for my currency collection yesterday – and that’s not even money you can use! Really puts things in perspective, that’s for sure…
Here’s more depressing stats from Fox News: (why am I subjecting us all to this today??)
“Americans are dying with an average of $62K of debt.”
!!!!!!!! This one’s based on data from credit bureau Experian tracking over 220 million consumers, where apparently a whopping 73% had outstanding debt when they were reported dead. 68% with credit card balances, 37% with mortgage debt, 25% auto loans, 12% personal loans and 6% student loans. And even taking out the home loans – “good debt” as they say – the average was still $12,875 per deceased person.
Of course, we all die at different times and it’s an average across the country, but still – pretty freaky stuff… And even worse for those you leave behind (the article was actually interesting with the parts on what debt can be transferred over to others and which can’t. Spoiler alert: when you leave zero debt, zero can be left :))
Now in more fun/less morbid news…
“Women view men as unattractive if they have a lot of debt. For men, physical appearance carries more weight and debt doesn’t play a role. “
Hah – not very surprising ;) This stat comes from LendingTree.com, and I’ll fully admit I put looks (and humor!) first when out on the prowl back in the day myself… I just happened to get lucky and end up with a lady who cherished frugality more than me! Now I wish she were as passionate about entrepreneurship and minimalism, but hey – what are you gonna do ;)
Lending Tree also found that:
“40% of people who self-identify as very attractive wouldn’t date someone with bad credit; more than 60% wouldn’t walk down the aisle with them.”
I don’t know if bad credit alone would ruin the relationship for me (I’m more interested in knowing if they’re open to changing and/or if I’M IN LOVE WITH THEM!) but it would def. be a concern for sure. At least in my current awareness of money.
“4 in 5 women think it’s very important to check your partner’s finances before marriage — only 3 in 5 men do.”
Okay, now THAT is important. You don’t need to see every last statement or transaction, but you gotta have an overall understanding of what the other person’s bringing to the relationship! Debts, assets, hopes, dreams, kids – can’t be hiding any of that stuff! I feel like it’s just a part of the entire picture, right? Always freaks me out when you hear those stories of people hiding stuff… Financial infidelity can be as hurtful to a marriage as physical infidelity!
And, finally…
“Having more school debt doesn’t hurt the attractiveness of the person as much as having greater car or credit card debt.”
Yup yup, smarts are always > stuff :) Debt is debt, but at least you’re getting a degree and opportunity out of it vs other things people go into it for! In theory it should help you make even more $$$ over time too, thus wiping it out and then some.
So the takeaways today?
- You should make sure you have access to $2,000 in the case of an emergency
- A $100 medical bill – or otherwise – shouldn’t force you into debt!
- Do your best not to die with debt if you can help it ;) Even better – leave your loved ones a cash bonus!
- If you’re man, WAKE UP AND LOOK AT YOUR HOTTIE’S DEBT! Sexy and debt-free is sexier than sexy and lots of debt (and sexy and working-hard-to-get-out-of-debt-while-also-being-obsessed-with-personal-finance-blogs is even sexier ;))
- Bad credit sucks, but the more important question is – are they doing anything about it?
- Make sure you have a good idea of your partner’s finances before putting that ring on the finger
- And lastly, if you have to have debt, do your best to make it student loan debt (although here’s a trick question for you – what’s worse, $15,000 in credit card debt or $50,000 in student loans? ;))
Stats aside, hopefully most of you already know all this and can pat yourself on the back for how far you’ve come.
If not, let this be a wake-up call and get those plans going!
The % of people who get to live their lives on their own terms without paying attention to money?
Zero.
******
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“The % of people who get to live their lives on their own terms without paying attention to money? Zero.”
Makes me wonder what % of PF bloggers can live life on their own terms. Pretty high, me thinks. We just bought a second cabin, cuz we wanted to move from “Good” to “Great” (still low priced, but has some things we’ve realized we want/need in our lives). How many folks in $ trouble can have the luxury of moving to “Good”, let alone to “Great”?
Financial Freedom. Don’t live without it. Great post.
You know it, brother. Being financially stable opens up all kinds of doors for us!
Wow! Crazy stats! I was one of the “4 out of 5 women that checked finances before marriage”. My husband still makes fun of me for it (married 8 years). But hey, I was fixing my own money mistakes back then and didn’t want to inherit anymore :)
Smart move, Nicole! I bet the peace of mind is totally worth the occasional teasing :)
SEXY!!!
Debt free guy marries a hottie with 124k debt and they die in a car crash on their honeymoon. Based on stat no. 3 and 4 they are a typical American couple :)
I often wonder where they get these stats too…some of this is just insane. 1/3 of Americans couldn’t handle a $100 medical bill? Shocking, but also eye opening…75 million folks are on Medicaid today and there is still another 30 million or so uninsured. That’s just over 100 million people which equates to about 1/3 of Americans right there.
I also found that particular stat insane and worrisome. Even at the financial low point in my life I think I could have covered a $100 medical bill.
A bit off subject but these days that $100 buys you a hospital band aid! Great post but disturbing how the richest country on Earth still has so many people living hand to mouth.
Exactly :(
Oh how I love some good stats. I just wish these ones conveyed a better message about the situation of our world. But I have to admit, my bachelors degree came from the Stat Department, so anytime I read stats like this I want to read about their methods of gathering the data because I worry about administrator biases (whether accidental or not) that might be skewing the data to better suit their agenda. But either way, scary stuff.
I don’t have that background but I do want to know the same because how they gathered the data as well as interpret it absolutely affects the findings.
Hahahaha I’m glad I’m not the only methodology nerd around here! :)
I teach Psych Stats, and I’m constantly reminding my students about this–based on the number of terrible studies I’ve seen, I’d say it’s a coin flip (at best) as to whether or not these stats are actually accurate.
I’m morbidly curious about the 6% of people who die with student loan debt. Is this people who are dying young? People who carried student loans with them for a long time? People who cosigned student loans for their kids? Some mix of the above?
Check out this article about people aged 60 and over with student loan debt.
dannnnnnnng
Wow, when I heard about the $2k thing I naturally read it as pay cash, but DAMN not even a credit card…wow.
The men vs woman thing on attraction and debt I imagine is more social and historical than anything. As more women transition to a role of breadwinner I wonder if those numbers change. Would be interesting to see that same study in 20-30 years.
“Women view men as unattractive if they have a lot of debt.” So true. One of the things that drew me to my husband was that he had a house, a nice car, a stable job, and no debt aside from the mortgage. I thought he was a real grownup and it was incredibly appealing. Now my neighbors on the other hand. Wife stays home with the baby and husband is a lawyer. He has a ton of law school debt. Don’t know the exact number but they told us it could buy a house. A nice house. So they rent in our neighbor hood and basically pay for a house they’ll never live in. My first thought when I heard was how trapped the wife must feel. I would not want to be in that situation at all.
I can totally see the unattractive issue with debt. Mr. Mt has debt when we married but was working a plan to pay it off. Most of the time credit card debt means that people don’t get the basics of money management, or don’t care. Neither of those are attractive qualities. Actually it’s a little scary. Like finding a shipmate who really likes to poke holes in the bottom of the boat.
Oh, and my credit score/debt was 0% the determining factor in my attractiveness to him! More like, “Oh, that’s cool.” About the same that as the fact I could drive a stick shift or shoot a gun.
Hahahha…
As a lady currently on the prowl, living a fiscally responsible lifestyle is definitely the number two thing I look for (looks being #1. Sorry not sorry I’m kinda shallow). Hard to find guys my age who care about finances! Even fewer of them worry about retirement.
So now I know the REAL reason you come to FinCon!! It’s swimming with financially-sexy folks!!! :) (And people have been known to find their soul mates there too – and even go off to get married!)
Wow, I’d hate to think that people ignore the financial picture in their potential mate/spouse. But for some men, that seems to be the picture. I knew my wife had a lot of student loan debt when I was getting into the relationship; but she’s really super cognizant of it, and for me it seemed more like an investment in her education versus the “bad debt” that people carry.
It’s been about 8 or 9 years, but I was one of those people that couldn’t manage a $2000 emergency AT ALL. My credit was shot (thanks, lousy ex, I had decent money management skills before you) and my income was nil at that point because I was trying to deal with my kids issues full time.
At one point before my kids started having big problems, I managed to get a job, put the kids in daycare with a child care subsidy, pay off all the debt incurred with the ex, and put over $500 in my very first emergency fund, and it felt amazing. I was trying to avoid new debt, so fixing my credit was less important than saving money. Having to give that feeling up to take care of my kiddos full time sucked, but keeping them healthy and safe was more important. I wouldn’t have been able to do it without my parents, since the ex only paid a pittance in child support, and usually didn’t even pay that at all.
About two years ago, my husband was laid off, took a job, and quickly realized the company was unethical and unsafe, and quit. After that we side hustled and lived off of savings and foods stamps for 9 long months until he found a job again. By the time he got his first paycheck, our savings had dwindled to $700 – that got scary! If we hadn’t paid off our mortgage early, we never would have lasted that long, and he would have had to get a job slinging boxes or doing retail somewhere rather than waiting for a good electrician job. As we all know, when you spend all your waking hours working a physical job, doing a job hunt becomes a foggy thought as you collapse in bed – it would have set his job hunt back if he were working at Wendys. Your page of side hustles really helped us through that phase!
AWWWWW so glad to hear that!!! And good for you for paying down your house too – that’s an accomplishment in its own that unfortunately is getting rarer and rarer!
I have a half-written post about teacher friends who feel like they’re going to die in debt. And it’s not hyperbole. It’s such a weird profession sometimes. Maybe I’ll finish it up this month :)
These stats are really important pieces of perspective. They make me think about some of the things that I’ve posted in the past and how they probably sounded. It’s easy to forget how much you’ve already accomplished.
Yeah, it’s amazing the stuff we bitch about too or always want more of when the reality is we’re extremely fortunate to be in these positions. Would love to read that post though, finish ‘er up! :)
It does scare me that people can’t cover a $100 medical bill without going into debt. :( I’ve been through that phase of my life, so I know how it feels, but I was hoping that experience wasn’t so common.
I was told as a kid that the purpose of life insurance was to pay off all of your debt once you die, so it’s okay to rack up debt while you’re alive. It’s so, so backwards with what I know now.
Fortunately we’re now able to cover a few months’ worth of expenses. We were hit with a $900 tax bill, which we paid–no problem. It took a lot of work and life changes to get to this point, but it’s been worth the peace of mind.
“I was told as a kid that the purpose of life insurance was to pay off all of your debt once you die, so it’s okay to rack up debt while you’re alive.” That is the worst thing I’ve seen all year!!!
I’ve gone through all of those phases (most of us probably have) and am thankfully in a solid place right now.
love that there are so many PF blogs that are doing their part to help change these stats. #MoneyNerdsUnite!
“The % of people who get to live their lives on their own terms without paying attention to money? Zero.”
I think this last line is key. I also think that how much money you have is less relevant than how much money you owe. In my opinion, consumer debt is a prison no matter what, but many people can figure out how to live with very little money.
I thought i was pretty clever w/ that last line ;)
My parents couldn’t/can’t face a $100 bill alone. But those stats probably wouldn’t tell you that I would and could and have footed those bills for them, I’m guessing. It’s not the same as being financially stable at all but it’s a nuance that exists.
Likewise I’m guessing I would answer a lot of those questions like I’m nearly destitute if they asked if I “could” afford things that aren’t Mission Critical because in those situations, won’t is the same as can’t.
Taken at face value though, there should also be a lot of overlap between people who couldn’t handle the $2000 or the $100 emergency. Even if they’re not currently in debt, lots of hardworking people who are just making ends meet wouldn’t be able to meet even one extra and unplanned bill for $5. I remember those days vividly, during college. All the bills got paid (late, sometimes) but I could not have taken on one more expense without going into debt.
Sadly, I currently fall into the group that couldn’t handle a few thousand dollar emergency without debt… for now. Next year will be like hitting the reset button.
It’s interesting to read about the attractiveness aspect of debt though. I had assumed men cared more about whether or not a potential partner carried debt. Wouldn’t dating someone who has their adult life in order be something men would be more interested in?
You would think! :) Maybe a lot more young males answered the polls than older wiser ones?
Which is why when people in government say that all you need is a health savings account to pay for medical expenses, I don’t know how they can keep a straight face. One in three people can’t come up $100 for an emergency, but they are somehow supposed to sock away thousands in case they have to go to the ER? You are right – anyone who is able to come up with $100, let alone $2000, is a part of a very lucky minority.
I love my HSA even though I have to have a high deductible plan to get it, and I would recommend it for people who are in a similar situation as me. But do you know what I love best about it? The $1,600 my employer puts in it every year. If I didn’t have any employer contributions there is no way I would be on a HDHP with a HSA. Unless the government is going to put money into HSAs for people, then it is a terrible and stupid idea designed to keep people from having access to healthcare.
We know we’ll get a ton of negative comments for this but is there a reason why stats always talk about the cost side?
Why not try and flip the questions: could you earn $2K in a month if forced to? Could you sell something to make $100? (No we don’t mean a car! We mean another product for $100 in profit)
Once people ask these questions they’ll realize savings has a floor. You can only reduce your living expenses to level X never below X. So if you’re earning then all the problems *go away*!!!
The best way to push people down this route seems to be consulting. For anyone who read this comment, try doing just one hour of consulting a week (charge the maximum price you can) meaning start at $X and work down to $X (your first customer). You’ll be surprised at how much it is!
You won’t hear any disagreements from me :) But I think we all know why stats like these are shared the way they are – because they’re juicy headlines!! You know news sites aren’t going to go out of their way to try to write something productive and helpful, haha… Even when savings rates were going up a handful of years ago the headlines read “Americans Saving More – Bad For Economy. Another Crash Coming!”
Money is one of the biggest things couples argue about. Understanding your partners money goals/habits before signing a life contract is probably a good idea. My better half and I might not agree on everything, but at lest we are on the same page about our hard earned cash :)
I often question how these questions are asked. If I pay with a credit card that I use same as cash am I going into debt to pay my bill? Same thing with debt. I have more then 62k in mortgage debt. I also have enough assets to pay that debt tomorrow if desired. So am I the financial concern they write about? But I digress I do believe there is a financial issue in the general population.
Great point! I’m guessing that yes – technically you would count since you do have debt in both places and the stats are coming from a credit agency. But don’t worry, I would too in that case with my temporary car loan :)
These statistics are all super interesting! Not being able to afford a $100 medical bill without going in debt is truly scary.
They really should teach personal finance throughout school, especially college. It’s so easy to get a credit card on campus and these students generally have little income. WTF!?
I know some adults who live paycheck by paycheck, with no savings, let alone a retirement fund. I tried to talk to them about cutting back on stuff, like do you REALLY need 500+ channels? Do you REALLY need to have 3 cars? Do you REALLY need to watch every new movie that comes out? They always tell me, it’s too much work or something like, oh you never know when you’re going to die, might as well live in the moment. Like seriously? What happens if you get layoff or something happens that prevents you to work? What happens if you live until 100?
I think you need to anonymously send them a few of our blog posts ;) The trick is really just getting them to CARE enough to WANT to change. I think financial education would be great in schools, but would have to be interesting enough (and relevant!) to the kids for them to actually take action on. You know no one at that age cares about budgeting or buying insurance haha… But tell them they can become a millionaire or have fun for the rest of their lives and not have to work?? Well sign me up!
I cannot get over the fact that money management is not an actual subject / course to pass high school. Seriously, let’s send the kids into adulthood with some knowledge what debt is and how it NEEDS to be paid off, the importance of emergency fund, how to invest and how compound interest can change their lives.
Sadly, no financial education is happening. I have a few colleagues at work – young kids at 25, 26 years old. Mountains of student debt, and still ‘grabbing drinks’ three times a week (NYC bars at $18 a drink), brunching away on the weekends and paying off debt at the bare minimum.
Reminds me of a post Studenomics once wrote – “Kids can be broke as hell, but they will ALWAYS find enough money for beer” haha… very very true. I used to be the same way myself and actually don’t think it’s too horrible (moved up to NYC just to party and have fun after college!), but I knew it was also just a stage and that I”ll eventually have to start paying attention to all that stuff. I think that’s the key at the end of the day – is it an ongoing/permanent thing, or just a phase until that epiphany goes off and you start building that foundation?
Wow this article is so true. Crazy stats as I currently have student loan debt, car debt, and little amount of cc debt even with these debts I was happy I was able to save close to 3,000$ when I heard rumors of my position being cut at work. Well……. I did get laid off from work so now I have enough money to last me these next few months. Big message to everyone make sure you have atleast 2,000 put aside without that I would have a lot more stress than I do now. AWESOME POST!!!! . Thanks !
Oh man, I hope you can find an even better job here shortly! Very smart to have that cushion under you!
Oh such depressing stats. But what if we did a little exercise and stated these stats with the majority in mind? Would that makes us feel better? Let’s see…”2 in 3 Americans can come up with $2,000.” “Two-thirds of Americans would be able to handle a $100 medical bill without going into debt.” “60% of people who self-identify as very attractive would date someone with bad credit; under 40% of them would walk down the aisle with them.” “1 in 5 women don’t think it’s very important to check your partner’s finances before marriage–only 2 in 5 men do.” I don’t know about you but I feel a tiny bit better. Thanks for the 411, Money!
Right on – love it :)
Wow this is a scary statistic-and so sad. I know when my husband almost died of sepsis it cost total about $10-$15k in expenses alone. Then there was lost income to contend with. If we had struggled to come up with $100, I’d still be paying those bills five years later. Or maybe would have to file bankruptcy. Just shows how much people could use help with their money, and how small amounts saved can make a big difference
Ack!! I hope he’s better now!!! No amount of $$$ can bring back loved ones! :(
In 2015 the place where our family cabin is, the guy who owns it decided to sell. No one wanted to lose the place and multiple generations of memories, so all the owners decided to form an HOA /LLC. To put in the good faith down payment, they needed to put in $1000. My mom was collecting the money, and the excuses she heard for why people couldn’t come up with $1000! I’d read an article that said ~60-70% of people (in the general population ) couldn’t come up with $1000. This situation turned out to be ~40%. The total buy in was 20k, and a good % have a mortgage on their summer place now.
There are several groups of siblings who have cabins there, and one brother decided buying a house for full time living vs a summer cabin was more important. I thought that was very mature, and he can still go there and stay with his brother.
I’m a natural saver, so while I might put the $2000 expense on my credit card, it’s for the rewards.
Reminds me of a post by Mr. Money Mustache on how it’s much nicer to use luxuries other people pay for than the ones you pay for :)
Turns out last year, the brother was looking to see if there could be another spot available. :)
It really is a great place. We found it because my dad’s parents were neighbors with the original owners. My dad & his brothers would vacation there for a week or two, and we rediscovered it, and the owner was selling a few cabins. For my family, it’s 3 generations, for some of the other’s there are great grandkids too!
that is pretty cool :) no shame in finding ways to spend more time together as a family either! I’d pay big bucks for that.
“Women view men as unattractive if they have a lot of debt. For men, physical appearance carries more weight and debt doesn’t….”
This is why women marry Up. My un-PC friend would say when it comes to partners, Women weigh Wallets and Men weigh **ts.
Haha… crazy guys and their minds…
I get scoffed at by some of my peers for having money stashed away just in case. “Why aren’t you ballin’ out instead of just saving it?!” Next time, I’ll have a better answer for ’em. Becoming debt free and having this money makes me sexy, damnit.
Cash rules everything around me (C.R.E.A.M.!), get the money, dolla dolla bills y’all..
J Money –
Comes down to a few things – The impulsive purchasing that occurs and being able to “show” you have “wealth” by buying things has been so ridiculous in our generation! Wealth does not equal a nice car or nice clothes if you don’t have income to support that lifestyle!
But yes – we should be fortunate in the position we are in, ensure we are killing debt down to the last pulp – CC Debt, Auto Loans, Student Loans, Mortgage. Fricken hate debt and no one should like it – unless its producing income for you in excess of the cost, that is haha.
Kills me reading the article though, knowing how hard it is out there for some and wish that we can guide those along the way, each one. So much potential for individuals to place themselves in a better situation.
-Lanny
We had to come up with ~$5,000 when our dog got bloat. It’s surreal being handed a piece of paper that essentially says “$5,000 or your dog dies. Plus, even if you pay it, he still might die, because statistics.” Biggest “your money or your life” decision for us ever! Thinking about the cost in terms of weeks of savings was the only way for us to process it.
Then, even though we had $5,000, being able to pay it on a moment’s notice was difficult. Husband didn’t have his wallet on him, as we left in a hurry, and I didn’t have a checkbook with me, nor did I know exactly how much cash we had in checking. Plus, I wasn’t sure the limits on my credit cards, or how much exactly was on them. Ended up splitting it between two cards and being refunded ~$1,000 days later, as he recovered nicely and came home early.
ACK!!! I’m glad you told us the happy ending at the end!!! Was it the same dog as your blog icon??? He looks nice and happy there! ;) Really glad to hear of his recovery… and a great reminder too that having a pet is a responsibility not to be taken lightly! So many of us get them on whims and then don’t properly care for them.. I used to be that way and cringe every time I think about it :(
Explains why so many people are single! ;)
I am not in a place where I could come up with $2K in cash for an emergency. it would definitely need to go on the CC. And I carry about $70K in debt (mostly SLs). so I concur with the stats. and it sucks.
Being without an emergency fund and needing dental surgery (stat! as they say in all medical TV series :D) was enough of a scare to start saving money on a regular basis! We haven’t had an emergency in years (at least not a big one), but it’s always nice to know you’re not a statistic :)
Well done :)
Haha, I totally love this post! I’m glad my lady is doing okay with finances and is totally fine with me overtaking the most of the financial planning.
I’m still studying but I was lucky to get a huge amount of unexpected money. I’ve put all of it into an emergency fund, so now I have enough in it for 4-6 months.
But one last question. Am I just a freaking money nerd or why am I shocked by the number of people who don’t check the finances before marriage? I’ve talked to my girl about finances after 2 months of our relationship. :O
You’re a smart man :)
I’m one of the 4 in 5 women who checked a guy’s finances before marriage. I can’t have a potential husband’s debt weighing me down; debt is fine but the guy should handle (pay it off) it first before marriage.
I have nearly $50000 available for emergencies via credit cards as a last ditch solution. I know if I needed to grab a plane ticket immediately, I could. Definitely working on building up an actual emergency fund, but the security from knowing I have a solution, even if it is a bad one, is very comforting.
My girlfriend definitely knows my financial situation and I know hers. She even let me check out her TSP accounts when the paperwork came in. I appreciate that she is making great money choices. I absolutely appreciate that she loves me even as I am working off my student loans. I’m on the right trajectory.
Awww – on the right trajectory in love too! :)