The State of Personal Finance: Eye-Opening Statistics You Need to Know
How well do you manage your finances? Are you aware of the state of personal finance around the world? Personal finance is one of the most crucial aspects of life, yet most people struggle to keep it sustainable. The key reason behind this is the lack of financial awareness and literacy. In this article, we will discuss the current state of personal finance and the eye-opening statistics that everyone must know to plan their finances better.
Debt
Debt is a barrier to financial freedom. Unfortunately, most people around the world struggle with debt. According to the Federal Reserve, consumer debt in the United States stood at $14.35 trillion in the second quarter of 2020. The average credit card debt per borrower in the United States is $5,315. In Canada, the average household debt to disposable income ratio stands at 176.9%. These statistics show the urgency of reducing debt and having a sustainable financial plan.
Savings
Savings are an essential part of personal finance. Yet, most people struggle to save money. According to the Federal Reserve, 25% of adults in the US have no retirement savings. Canadians are equally struggling with savings. According to a survey by the Financial Planning Standards Council, only 27% of Canadians are confident that they will have saved enough for retirement.
Employment and Income
Employment and income are vital for personal finance. However, globally, the situation is not promising. According to the World Bank, more than 70% of the global workforce works informally with no job security or social protection. In the US, the median household income in 2019 was $68,703. However, the gender pay gap and racial pay gap still exist, which affects personal finance planning.
Financial Literacy
Financial literacy is crucial to making informed financial decisions. Yet, a significant number of people globally lack financial literacy. According to a survey by the Standard & Poor’s Global Financial Literacy Survey, only 57% of adults globally are financially literate.
Conclusion
The state of personal finance worldwide is a cause for concern. Rising debt, lack of savings, uncertain employment, and inadequate financial literacy, all indicate a need for urgent action. Empowering people with financial literacy and increasing awareness are crucial steps in achieving sustainable personal finance. We hope these eye-opening statistics inspire you to take action towards securing your financial future.
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