Times might not be tough for government officials and those on Wall Street, but the difficult economic climate is taking a toll on most Americans. A new survey found that more than three-quarters (76 percent) of Americans live paycheck-to-paycheck and less than one-quarter (24 percent) have at least six months worth of emergency savings.
BankRate.com released the findings of its latest survey Monday in which it was described as “disappointing” by Greg McBride, Bankrate.com’s senior financial analyst. “Nothing helps you sleep better at night than knowing you have money tucked away for unplanned expenses.”
The poll also found that less than half of Americans have at least three months worth of expenses covered for things like a medical emergency, job loss or any other type of unforeseen event. More than one-quarter (27 percent) have no emergency savings at all. These figures have barely changed in the past three years.
“We measure five key components of Americans’ financial security each month, and we routinely find that savings is the weakest area,” McBride said in a statement. “People who are less comfortable with their savings now versus a year ago outnumber people who are more comfortable by a margin of nearly two-to-one. That’s especially jarring since people are feeling much more optimistic about other aspects of their finances.”
Although they aren’t saving and are living paycheck-to-paycheck, the website’s Financial Security Index increased to 102.7 this month. What this means is that it’s the fourth consecutive month to show consumers have improved their overall financial security: consumers have a higher net worth, a secure job and an enhanced debt comfort level.
What Americans spend money on
It may be an old cliché, but studies have always come out explaining how Americans are wasteful when it comes to spending their money. There are a variety of reasons why Americans continue to live paycheck-to-paycheck – indeed, a paucity of income growth can be attributed to it as well – and here are some of the figures:
– $7 billion in ATM fees each year
– $31 billion on lottery tickets each year
– $44 billion on tobacco each year
– $50 billion on alcohol each year
– $76 billion on soda each year
– $165 billion in wasted food each year
– $49 billion in credit card interest payments each year
– Average American spends $3,000 a year on lunch and coffee during the week
Many Americans have different financial priorities and the paucity of savings (three percent annual savings rate) and inadequate budget practices is ubiquitous. This is even more apparent in another survey, which found nearly one-quarter of Americans don’t even have $100 to cover an emergency because they don’t have enough available funds at the end of the month after paying for housing, car and debt.
What should be noted is that all age demographics are financially struggling, including the youth, middle aged and retirees.
The telephone survey was conducted with 1,004 adults between Jun. 6 and Jun. 9. The poll contains a margin of error of +/- 3.7 percentage points.