Finance Tips: What’s In Your Wallet?

: Reese Baker & Associates

  Filed under: Money Management

money managementWhen it comes to finance, we could all do a better job managing our money. From spending outside of our budget, to borrowing too much and not repaying enough we all have financial habits that could be improved if we want to have a solid financial future. So, that leaves a few important questions.

How much cash does the average person carry?

It is reported that 40% of Americans carry less than $20 in their wallet at any given time. While some could be using a weekly cash allowance as a money-saving strategy (by not spending more cash than you have on you for the week you can stay within budget), but chances are most of those people are using plastic for their purchases. Whether checking account-linked debit cards or credit cards, it seems as though more people today use plastic over paper when it comes to their daily transactions.

How many credit cards does the average person carry?

It is reported that the 77% of Americans had at least one debit card or prepaid credit card in their wallet. Additionally,  33% of Americans carry two to three credit cards, while 20% carry more than four credit cards in their wallet. Credit card ownership among college students rises from 21% for freshmen to 60% for college seniors. Approximately 27% of adults over the age of 50 own four or more credit cards, compared to 16% for those 18-49 years of age. These numbers have risen significantly since the mid-90s, and so have the average daily balances.

In recent years the shift has been made from cash to credit, and much of which shows a clear pattern of overuse. From the rise in card ownership to the decrease in age among debtors, these findings lead to two very important follow up questions.

What is the average credit card balance for most people?

The average credit card balance per card per adult is $4,878, with a total credit debt balance of $15,607 across all cards. There is also a significant increase in the difference balances per cards that carry any balance at all between zero to six months, where cards with long running balances weigh in at $8,220 compared to only $1,037 for seldom used cards.

What is the average savings account balance for most people?

The average savings account balance is around $6,000 for most families. However, only 30% of American families have a savings account at all. This means that there are 70% of families living check-to-check with very little to fall back on. Further, fewer families have 401(k) or Roth IRAs than in the preceding years.

When you add all of these numbers up you can see just how bleak the average American financial  profile really is. Further, bad things happen to good people and there is the potential for even the most money savvy individual to be brought down by an unexpected financial hardship. The bottom line is we should all take the time to spend less, save more, and pay off our credit debts.

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