Millennials are not the only generation struggling to build up savings, according to a new study.
The Center for Financial Services Innovation (CFSI) found that 57 percent of American adults are struggling financially, and 43 percent struggle to pay bills and credit card payments. Nearly half said their expenses are equal to or greater than their incomes — for 18-25 year olds, 54 percent are blowing their entire paycheck.
36 percent said they occasionally or frequently run out of money before the end of the month, and 28 percent said they have less than 1,000 in liquid savings, according to the Understanding and Improving Consumer Financial Health in America study.
While 74 percent answered they had a savings account, more than half did not have regular planned savings. 43 percent answered they did not have a budget.
“If we are going to meaningfully and measurably address financial health in this country, we have to start with a deep understanding of consumer preferences, behaviors, and pain points,” CFSI President Jennifer Tescher said.
The study broke its 7,000+ respondents into three financial health categories: Healthy, coping, and vulnerable.
The categories directly correlated to their financial habits. People who planned ahead for large expenses were 10 times more likely to be “healthy,” and those with planned saving habits were four times as likely.
The good news is the study found that people can improve their financial health without increasing their income. Month-by-month budgeting and limiting unplanned spending can prevent accumulating debt that takes a toll of your health and wallet. Of the 25 percent of Americans who said they had too much debt, 96 percent of them reported being stressed about money.
Tescher suggested using money management apps and accountability methods such as money envelopes or prepaid cards to maintain financial health. 77 percents answered they already use pre-paid cards to limit overspending.
Millennials have to get serious about saving, and monthly budgeting is the first place to start. With many failing state pensions and grim social security statistics, we can’t count on the government to take care of us.
