The average American believes they need to earn $233,000 annually to be financially comfortable, but the average worker in 2021 made only $75,200. Despite the pandemic, which is expected to reduce debt and increase savings, many Americans feel financially insecure, with 72% saying they aren't financially secure given their current finances. The cost of living in America is high, with the median monthly rent accounting for over 46% of the median pre-tax income. The median mortgage payment for a 2400 square foot house is $1,957 per month, which is more than the median gross monthly earnings of $4,388. Americans spend significantly more on essential expenses than recommended, with 75% of their take-home pay going towards needs. The Federal Reserve has implemented 11 interest rate hikes since March 2022 to combat inflation, which has made financial activities and decisions, including home purchases, less affordable. More than 40% of Americans blame insufficient retirement funds or emergency savings for financial insecurity. Many Americans have more credit card debt than emergency savings, and more than a quarter of Americans said debt keeps them from financial security. Public policy can greatly improve Americans' chances of achieving financial security. The household's willingness to work towards financial security is also important. The first step to financial success is to have a clear goal and to ensure that the budget aligns with those goals.
1. The average American believes they need to earn $233,000 annually to be financially comfortable.
2. However, in 2021, American workers on average made $75,000 and $203 annually.
3. The desired amount for financial security is about three times the average income.
4. 72% of Americans reported that they weren't financially secure given their current finances.
5. More than a quarter of Americans believe they'll likely never be financially secure.
6. Despite lower debt and higher savings post-pandemic, many Americans are more anxious about future financial stability.
7. 40% of Americans blamed insufficient retirement funds or emergency savings as a reason for financial insecurity.
8. 36% of Americans reported having more credit card debt than emergency savings.
9. Many Americans struggle to save for emergency expenses, with over half admitting they don't have at least three months of emergency expenses saved.
10. 75% of Americans take home about 75.2% of gross wages after taxes and benefits, which is about $3,308.
11. The median monthly income for full-time American workers was about $4,400 during the second quarter of 2023.
12. The median mortgage payment for a 2,400 square foot house was $1,957 per month.
13. Americans spent an average of $690.75 on food every month.
14. The cost of living in America today includes rising healthcare costs, college costs, and home purchase costs.
15. The Federal Reserve has implemented 11 interest rate hikes to combat inflation since March 2022.
16. More than a third of Americans set rising interest rates as a barrier to financial comfort.
17. Many Americans struggle with the rising costs of living, with food and housing utility bills and insurance premiums increasing.
18. Financial planners advise Americans to spend 50% of their net income on essentials, 30% on wants, and 20% on savings or paying off debt.
19. 75% of Americans are spending more than half of their take-home income on needs, leaving little for wants and saving for the future.
20. Many Americans are unable to meet this target allocation due to their income and living location.