Top 5 Money Problems Faced By Americans In 2020: A Case Study By Ladder Advisors
by Arina Smith Financial Planning 02 April 2020
We all have heard about some friend or family member going through personal finance issues. In a watershed report, Associated Press stated that four out of five Americans suffer from financial insecurity.
According to one of the world’s leading Financial Advisory firms, Ladder Advisors, managing personal finances is not as easy as it sounds. With a growing appetite for consumerism aided and abetted by social media and mainstream advertising, Americans are spending more than they can afford.
In this article, Ladder Advisors looks at the top five money problems plaguing America and its population. We look at how it’s not only the lower classes but even the middle classes who face serious personal finance problems.
5 Money Problems Facing America- Ladder Advisors:
1. Living Paycheck to Paycheck
According to statistics, 49% of Americans are living like this. This means that financial security evades nearly half of America’s total population. The expenditures of the population are far outpacing their incomes.
Economic slowdowns, lesser opportunities, outsourcing of jobs, and closing down factories are some of the principal reasons for these problems. This has been complemented by an increase in the prices of almost all goods and commodities.
2. The Debt Problems of Americans
America’s debt problem stands at $13.86 Trillion Dollars as of 2019! This includes credit card debts, student loans, mortgage loans, personal loans, auto loans among others. Americans are increasingly taking loans and spending the bulk of their incomes repaying EMIs.
Overspending and mismanaging financial assets is one of the major reasons for falling into a debt trap. The lack of financial discipline and no efforts taken to build healthy habits have contributed to increasing debts.
3. Lack of Savings
The AP survey also found that nearly 30% of all the respondents did not have any savings. In other words, they had not planned their retirement finances. This means that nearly thirty percent of all Americans do not have any idea about their financial futures.
One of the major regrets of most Americans in the age group 55-64 was that they did not have any savings. Americans do not believe in financial planning, leading to many problems when they reach that age.
4. Useless expenditures and faulty investments
Peer pressure and the symbols of social status are a major reason that leads to Americans spending beyond their means. This also leads them to run up credit card debts and take high-interest personal loans. From renovating kitchens to buying automobiles, Americans are the highest consumers of luxury items in the world.
With limited income and maximum expenditure, dependence on credit cards becomes second nature. Most Americans use credit cards as their principal source of transactions. This is one of the most troubling financial habits ever.
5. Not listening to Financial Experts or Advisors
Most Americans feel that financial advisors are too expensive. However, they are wrong. Some of the best financial advisory firms are affordable and can offer real value in terms of financial solutions.
According to Ladder Advisors, financial firms work with people on a range of issues. They help individuals and families clear their debt problems effectively. They can also guide you when it comes to making the right kind of investments.
It is high time that we start thinking about our personal finances and try to get them in order. By bringing in financial discipline, we can ensure that financially, we are at peace. This also helps us prepare for unforeseen emergencies in a much better fashion.
If you have savings or insurance, you will not have to take personal loans during health emergencies. Can you think of some other money problems that you or your loved ones face on a daily basis?
Let us know in the comments section below.