2017 was a momentous year for Americans and their finances, specifically in regards to household debt. According to the Federal Reserve Bank of New York, household debt reached a new high of $12.96 trillion in the third quarter of 2017. That was $280 billion higher than the previous record set in 2008. What does this unprecedented imbalance say about Americans and their financial habits?
GOBankingRates conducted numerous financial surveys throughout the year to probe this question. Read through to get a closer look at Americans and their money in 2017, and find out if there's any hope for our financial future.
Many Americans Had Financial New Year’s Resolutions
Americans began 2017 intending to "save more, spend less," according to GOBankingRates' 2017 New Year's financial resolution survey. More than a fifth of Americans emphasized this desire, while a close second was to "pay down debt," which just under 20 percent chose as a response.
But Many Had Trouble Keeping Their Money Resolutions
It seems that some people might've had trouble sticking to their "save more, spend less" resolution. In a separate survey, more than one-third of Americans said their biggest money regret of the year is not saving enough money. Other popular financial regrets include spending money on non-essentials, not investing the stock market and falling into debt.
Most Americans Are Not Saving Enough Money
Saving more was a major priority for Americans in 2017, but our annual savings account survey found many Americans don't have enough money saved in savings accounts.
In our annual survey asking how much Americans have in savings, 57 percent said they had less than $1,000. That's actually an improvement over last year's survey, when 69 percent said they had less than $1,000. Still, 39 percent said they have $0 saved.
‘Never Retiring’ Is the Biggest Financial Fear in America
Several GOBankingRates surveys from 2017 revealed that many Americans are lacking responsible money habits, like saving more and paying down debt. These habits are also reflected in Americans' financial fears.
In a survey conducted in July, GOBankingRates asked Americans to name their biggest money fear. More than a fifth of respondents said "never being able to retire," followed closely by "always living paycheck to paycheck" and "living in debt forever."
Many Americans Are Behind on Retirement Savings
Despite the common fear of not being able to retire, people still aren't saving nearly enough money. Most experts suggest you should aim for at least $1 million saved for retirement. But according to GOBankingRates' 2017 Retirement Savings survey, more than a fifth of Americans said they have less than $10,000 saved and more than a third said they don't have any retirement savings.
Americans Are Not Prioritizing Their Finances
Americans might say they want to get better with money, but to actually improve their habits, they need to make it a priority. Unfortunately, this doesn't appear to be happening.
A survey conducted earlier this year seemed to confirm this. When asked how much time they spent on social media compared to their finances each week, the average American reported spending more than double the time on social media versus their finances: 5.3 hours compared to 2.6 hours.
Indeed, Americans make saving for retirement harder for themselves. Despite fears of not saving enough, another GOBankingRates survey found that about 40 percent of respondents said they aren't saving because retirement isn't a priority.
Many Americans Don’t Know How They’re Paying for Retirement
This lack of prioritization is evident in Americans' future plans. According to another survey, 26 percent of Americans said they plan to rely on a 401k or IRA the most when they retire. Yet, nearly 40 percent said they didn't know what they will rely on in retirement, including 42 percent of respondents ages 45 to 54 and 29 percent ages 55 to 64.
Debt Is the No. 1 Cause of Financial Stress in America
Although Americans claim to have more in savings than credit card debt, many are still weighed down by debt. For the second year in a row, GOBankingRates found the most common cause of financial stress among Americans is debt.
However, financial stress varies by state. The majority of Americans in some states said healthcare, taxes and everyday costs are the biggest sources of stress.
The Average American Has Thousands of Dollars of Debt
In our 2017 Household Debt survey, GOBankingRates found that the average overall debt among all respondents (including those who report having no debt) is approximately $63,000. The most common type of debt is mortgage debt followed by credit card debt. The survey also found older Gen Xers (ages 45-54) have the most debt, and a quarter of Americans have student loan debt.
But Americans Have More Savings Than Credit Card Debt
One encouraging sign of improving financial habits came from our survey comparing credit card debt to money in savings. Almost two-thirds of Americans reported they had more money in savings accounts than they owed on credit cards.
When breaking down the results geographically, however, the survey revealed some significant differences in financial habits. Several states in the South had a markedly higher percentage of respondents who said they had more credit card debt than money in their savings accounts.
Majority of Americans Blow Their Paychecks on the Holidays
As the holiday season approached, GOBankingRates sought out to find out how much Americans planned to spend for Thanksgiving and Christmas. Surprisingly, more than 50 percent of respondents said they planned to devote one full paycheck toward the holidays. And men, seniors and millennials were more likely to spend three months' pay (or six full paychecks) on the holidays.
One financial expert told GOBankingRates these findings suggest Americans "lack self-control when budgeting and planning for these one-time expenditures, and the holidays are no exception."
Americans Planned to Spend Hundreds on Holiday Gifts
Speaking of the holidays, another survey found that Americans planned to spend hundreds of dollars on gifts for the 2017 holiday season. But holiday gift spending varied from state to state.
For example, the states with the highest average planned spending on gifts included a handful located on the East Coast. Meanwhile, the states that planned to spend the least amount were scattered across the U.S., from California to Maine.
Americans Planned to Spend Their Tax Refunds Responsibly
Americans' attitude toward their tax refunds seems to reflect their New Year's resolutions. In a survey conducted in February 2017, GOBankingRates asked what people plan to do with their tax refund. The overwhelming majority of respondents — 79 percent — said they'd put their returns either toward savings or paying off debt.
Americans Have a Savings Plan for a Financial Windfall
When it comes to receiving "free" money, Americans are once again thinking responsibly. When asked what they would do if they unexpectedly received $10,000, nearly 40 percent of survey respondents said they'd put the money toward savings. Specifically, 44 percent of young millennials — respondents ages 18 to 24 — said they'd put this windfall toward savings.
Overall, these surveys revealed that there seems to be an awareness of the need to be better with money, but Americans might not know how to become better. They worry about not saving enough for retirement, living paycheck to paycheck and falling into debt — and many don't know how to solve these problems.
This article was originally published on GOBankingRates.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
