18 October 2013
Are You Spending More Than You Earn? 19% of Americans Are

According to the National Financial Capability Study, undertaken by the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation, only 41% of U.S. households spend less than the family brings home from the workplace.1 Many people make up the difference by charging expenses on their credit cards, placing themselves deeper in debt each month.

 The National Financial Capability Study Results

According to the FINRA Investor Education Foundation:

  • 36% of Americans spend about the same amount as they earn.
  • 19% spend more than they earn. Add up those two numbers, and it’s easy to see that many of us are just getting by, or are losing ground in our financial activities.
  • Fewer than 40% of adults have three months’ expenses saved up in the bank in case of a financial emergency.
  • The survey also reports that 34% of credit card holders make the minimum payment on credit card debt each month.
  • Medical bills are a problem for people of all ages, with the cost of health care continuing to increase. 31% of Americans under the age of 35 have outstanding medical bills.

 The survey indicates a lack of financial education about how personal finances can be managed effectively to lower debt, pay less interest on borrowed money, and actually save for the unexpected.

 How Well Do Nevada Residents Manage Their Finances?2

Since the economic meltdown that began in 2007, Nevada has been hit hard with lower property values, higher unemployment, and a slower recovery than many other states.

  • The survey reveals that 23% of Nevada residents spend more than they earn every month.
  • 29% of Nevada residents have past-due medical bills.
  • Only 37% of us spend less than we earn; 37% of Nevadans spend about the same amount as they earn; 23% of state residents spend more than they earn.
  • Only 36% of state residents have an emergency fund, while 60% are unprepared for the unexpected.
  • Other data show that state residents continue to borrow to cover expenses. In fact, according to the National Financial Capability Study, 40% of state residents borrowed from sources other than their local banks, from lenders like payday loan companies and pawn shops.
  • 41% of residents of the Silver State pay the minimum required on their credit cards each month, compared to the national average of 34%.
  • Home equity has also taken a hit in our state, according to survey results. 34% of our state’s homeowners live in homes worth less than the outstanding mortgage balance.

If you’re spending more than you earn, it may be time to take action to help improve your financial picture. A good place to start is at your local bank. A Nevada State Bank representative can help you find bank accounts and services may be able to assist your family’s financial situation.  Its blog, http://blog.nsbank.com/, has articles on money management, budgeting, fraud protection, and other important components of financial education.  On the Nevada State Bank website, you’ll find calculators to help you determine how long it will take to pay off a debt, whether to buy or lease a car, how the interest rate affects mortgage payments, and other valuable information.

Don’t be a statistic – take some time today to start educating yourself so you can make better financial decisions.

 

1. www.usfinancialcapability.org/results.php?region=US

 2. www.usfinancialcapability.org/results.php?region=NV

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.

 

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