Don’t be Average!

This weekend I was surfing the Internet looking around for financial stats and figures.  Being the nerd that I am I love to look at surveys and stats, so I decided to compile a list of the financial stats for the average American.  The statistics were pretty disappointing.

  • The Median Household Income as of 2007 was a little over $50K  [1]
  • 60% of Americans live paycheck to paycheck, 30% for those who make over $100,000[2]
  • The average household consumer debt was $24,755[3]
  • The average US household has $8,329 in credit card debt, among households who use a credit card the average is $15,788 [4]
  • The average credit card holder has 3.5 credit cards. Including cardholders and non-cardholders, the average consumer has 2.7 cards each.[5]
  • Average student loan for graduating seniors in 2007-08 is $23,186[6]
  • Average car payment is over $400 a month over 5 years.[7]
  • Average mortgage payment is $1,295-[8] 
  • The average American saves 6.4% of their income [9]
  • Average amount in children’s college fund for those who save is $2,676 [10]
  • At the end of 2008, the average 401(K) balance was $86,513.  The Median was $43,700.  For those is their 60’s the average is $125K and 50’s it is $113K [11]
  • Average worker contributes 8.2% of their salary into a 401(K) [12]
  • Median Net worth as of 2009 is $91,304 [13]
  • Average household gives $2,295.51 in charitable contributions [14]

After looking at the numbers the only conclusion I can come up with is that the average American household is broke.  They live beyond their means, do not properly save for emergencies and have most of their paycheck go to the bank in the form of credit cards, car, or student loan payments.  Being average financially today in America is not the way to go, but the good news is you do not have to be Average!

By simply following a budget and living on less than you make, you will be able to control your spending and not have to rely on credit cards each month.  You can then pay off any debt that you do have which will free you up to save for big purchases such as a car and pay for them in cash instead of relying on financing to buy them.  Without any payments you can then use that money to consistently and systematically save for retirement.  After time you will build so much wealth that you will be able to pay off your house completely.  Then you will build serious wealth and be able to give most of it away to causes that you are passionate about and not miss any of it!

If you want to win financially, you must not be average.  Develop skills that will help you in the marketplace to earn more income.  Learn to live on less than you make so you can avoid debt and save for retirement. This will enable you to build wealth and give generously.  If you are feeling stuck being average or even below average contact us today.  Our mission at JW’s Financial Coaching is to equip you with the knowledge to become better than average and to win financially. 


[1] US Census Bureau-http://www.census.gov/compendia/statab/2010/tables/10s0674.pdf top

[2] MSN.com top

[3] Orlando Sentinel top

[4] Creditcards.com top

[5] Federal Reserve Bank of Boston via Creditcards.com top

[6] National Postsecondary Student Aid Study top

[7] MSN Money-http://articles.moneycentral.msn.com/SavingandDebt/SaveonaCar/ABCsForAGreatCarLoan.aspx top

[8] US Census Bureau-http://factfinder.census.gov/servlet/ADPTable?_bm=y&-geo_id=01000US&-qr_name=ACS_2005_EST_G00_DP4&-ds_name=ACS_2005_EST_G00_&-_lang=en&-_sse=on top

[9] US Department of Commerce http://research.stlouisfed.org/fred2/data/PSAVERT.txt top

[10] Sallie Mae top

[11] ERBI- http://www.ici.org/pdf/per15-02.pdf top

[12] MarketWatch- http://www.marketwatch.com/story/more-savers-embrace-their-401k-plans-2010-05-19 top

[13] Thomas Stanley- http://www.thomasjstanley.com/blog-articles/48/Average_Rich_or_Median_Poor.html top

[14] http://www.philanthropy.iupui.edu/Research/Giving%20focused%20on%20meeting%20needs%20of%20the%20poor%20July%202007.pdf top

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