America is the world’s largest economy. However, statistics about consumer spending and its current levels of debt truly beggar belief.
From the number of people struggling to make ends meet to the amount of debt the US accrues daily, there are some scary things happening right now. Here are 12 mind-boggling statistics that shed the United States’ financial position in a rather different light…
12. 68% of people live paycheck to paycheck.
According to CNBC, an incredible 68% of Americans live paycheck to paycheck. The average household surveyed had just $800 left between paychecks to cover all essential living expenses. As a result, many families are forced to rely on credit cards, apply for personal loans, or try to stretch their remaining cash.
11. 40% of Americans have been in credit card debt for over five years.
GOBankingRates.com found that a whopping 47% of Americans had been in credit card debt between 2018-2022. This figure rose from just 14% between 2013 and 2017. It’s tough to pinpoint the exact cause of this unfortunate debt spiral. However, it’s largely down to skyrocketing inflation, increasing property prices, general uncertainty, and the global pandemic.
10. The U.S. national debt rises at an average of $5.2 billion per day.
If personal finance wasn’t stressful enough, Bank of America strategist Michael Hartnett projects that the U.S. national debt will rise by a staggering $5.2 billion daily. This eye-watering statistic applies to figures for an entire decade from 2023 onwards.
9. The average person who takes out a new car loan takes out $27,000.
Most American rural areas are famously tricky to navigate without a vehicle. So, it’s no surprise that car loan statistics are going through the roof. With used car loans coming in just slightly lower at $18,000, this statistic isn’t likely to improve anytime soon.
8. On average, Americans make five impulse purchases every month.
SWNS confirmed that Americans purchase around $151 worth of unnecessary goods every month. When you consider that the same shoppers manage to save just 4.7% of their income from each paycheck, it’s clear that this reckless spending is becoming a national issue.
7. The median amount saved for retirement is less than $60,000.
It’s no secret that ROTH IRAs and 401k’s are crucial for funding a comfortable retirement. However, the Federal Reserve has reported median retirement savings of just $60,000 for all age groups. Even more shockingly, U.S. News found that 45% of households have nothing saved for retirement at all.
6. U.S. consumer spending on home entertainment reached $36.6 billion by the end of 2022.
With Netflix raking in payments from an impressive 247.2 million paid subscribers every single month, it’s clear that spending on home entertainment is skyrocketing. If you take Hulu, Disney+, and Prime subscriptions into account, it’s unsurprising that spending on digital entertainment is climbing by 11% each year.
5. The average federal student loan debt balance is $37,718, while the total average balance (including private loan debt) may be as high as $40,499.
Although the government paused loan repayments and introduced 0% interest on student loans between March 2020 and September 2023, average balances are still extremely high. If you throw private loan debt into the mix, the situation looks even more dire. While President Biden is campaigning for student loan forgiveness across the board, this idea isn’t getting much traction in Congress. So, it’s hardly shocking that Americans have seen federal student loan debt more than triple in the last 15 years.
4. 26% have no emergency savings.
A solid emergency fund can see you through everything from a small leak to major hurricane damage. But as 26% of Americans currently have no emergency savings, a single unfortunate event could quickly plunge them into debt. To make matters worse, only 37% of Americans have enough cash to cover an emergency totaling $1000 or less.
3. U.S. consumers spend at least $18,000 annually on non-essential items.
Everybody needs an indulgence or two. However, U.S. consumers spend around $1,500 on monthly subscriptions, eating out, and other luxuries. With the average American salary sitting at $59,428 in 2023, these purchases represent a significant portion of the average American’s income.
2. Nearly half of all Americans need credit cards to cover essential living expenses.
Clever Real Estate recently discovered that 48% of Americans relied on credit cards for day-to-day purchases. While only 29% of baby boomers pulled out the plastic regularly, an eye-popping 59% of millennials charged their cards for groceries, rent, and other essentials.
1. Americans with debt spend an incredible 33% of their income repaying it.
According to Northwestern Mutual, Americans with debt spend approximately 33% of their monthly income paying creditors. The statistic is even more staggering when you realize that it doesn’t include mortgage debt. If you account for taxes, healthcare, and retirement contributions, Americans only get to pay a pittance toward daily essentials.