DaveWatch: paycheck-to-paycheck statistics
I was just listening to the Dave Ramsey show from this past Thursday. About fifteen minutes into the third hour, he said, “AC Nielsen just did a survey. It was in USA Today just the other day. 78% of Americans are living paycheck-to-paycheck.”
This is looking like another shady statistic on Dave’s part. I couldn’t find any reference to this study on the USA Today Web site (if anyone can find it, please let me know). There are statistics on AC Nielsen’s Web site, but what it actually says is that 22% of Americans have “no spare cash” (January 24, 2006). The way I read it, that means that 78% are not living paycheck-to-paycheck.
I’m a little surprised; I would’ve thought the paycheck-to-paycheck number would be higher than that. But I’m really starting to wonder who does Dave’s research.
March 26th, 2006 at 7:12 am
Well, while he may be developing a poor track record with statistics, at least the methods he presents are good, right?
March 26th, 2006 at 7:46 am
Sure. I wasn’t saying anything about his message, which I think is great (and has saved our butts several times already). I’m on board with his "debt is dumb" mantra, and he provides a pretty good toolbox (baby steps, zero-based budget, debt snowball).
But it certainly doesn’t help his cause when he uses apparently made-up statistics.
June 1st, 2006 at 8:18 am
Financial Literacy Statistics
The Need for Financial Education is Real. The Statistics Speak For Themselves!
For many years now the League and many credit unions have realized the overwhelming need for financial education and the current statistics show that this need is all too real today:
Half of all Americans are living paycheck to paycheck.
40% of Americans say they live beyond their means.
Personal bankruptcy filings were up 7.4% last year. Over 1.5 million people filed for bankruptcy in 2002.
More young people filed for bankruptcy than graduated from college in 2001.
Household debt increased more than 9%, the largest increase since 1989. In the first quarter of 2002, total credit debt was $660 billion.
Sixty percent of American households carry over some portion of their credit card debt every month. The average balance is more than $4,000.
The US has the lowest personal savings rate of any major industrialized nation.
Half of American Households have a savings of less than $1,200.
From 1992-2000, disposable personal income rose 47% but personal spending climbed 61%. At the same time, the overall personal savings rate fell from 8.7% of disposable income in 1992 to zero in 2000.
The personal saving rate went negative for the first time ever in 1998. Americans are spending $100.20 for every $100.00 they bring home.
More than half of us are not putting aside enough to maintain anything like our present standard of living upon retirement. By the year 2010, 78 million Americans will be 65 or older. One in three has no retirement savings.
The average American will spend 18 years in their retirement phase. Less than half of Americans have put aside money specifically for retirement.
Today’s average 50 year old has only $2,300 saved toward retirement.
Less than 1/2 of American workers have attempted to calculate how much they need to save for retirement.
Women are twice as likely as men are during retirement to receive income below the poverty level.
55% of American workers have no idea how much they will need to save to make their retirement dreams a reality
It costs the average American family over $200,000 to raise a child to 18.
Only 32% of American parents talk to their children regularly about personal finance.
Only 7% of parents say their child understands financial matters well.
Only 5% of investors believe they know everything they need to know to make good investment decisions.
20% of employees are unable to carry out normal work activities three days per week due to financial concerns.
2 out of 3 households will probably not be able to accomplish one of their major life goals because they did not plan for the future.
43% of adults at the lowest level of financial literacy live in poverty, compared to only 4% of those at the highest level of financial literacy.
The likelihood of being on welfare is inversely proportional to financial literacy levels.
Approximately 57% of all divorces are due to arguments over money.
In 2000, credit card issuers mailed 3.54 billion solicitations to consumers; this corresponds with an average of 3 credit card offers per month per household.
The tradition value of "save now and buy later" has been replaced by a modern one, "buy now and pay later."
More than three-fourths of college undergraduate students have credit cards; most have multiple cards with an average total balance of $2,748. Ninety-five percent of college graduate students have cards; each has an average of four cards with an average total balance of $4,776.
Seventy percent of college undergraduates have at least one credit card, and 20 percent of students who carry balances on their cards have debts of more than $10,000.
High school seniors taking part in a 2002 national survey of financial knowledge, sponsored by the Jump$tart Coalition for Personal Finance, scored an average of 50.2 percent-a failing grade. Scores have been declining since the first survey was administered in 1997.
Only 21 percent of students between the ages of 16 and 22 say they have taken a personal finance course at school
Purchasing Power of the youth market aged 5-19 at almost $200 billion annually
Teenagers spend over $172 Billion annually
Generation Y - 10 to 24 year olds or under 21 - is estimated at 60 million in the U.S.
33% of High School Seniors already use a credit card
33%+ of High School Seniors have ATM cards
66% of kids age 12 to 19 have savings accounts; 20% have checking accounts; 5% have mutual funds; 16% own stock.
(Statistics were provided by the American Bankruptcy Institute, the Federal Reserve, and the National Endowment for Financial Education.