Call us at 1(866) 60-SHIFT
The beginning of the year always brings about a time of reflection and resolution, with personal finances being one of the areas to consider for improvement. Some people resolve to get out of debt, save for retirement, or just get back to basics with a written budget. Looking at what others are doing via statistics is a good way to see where you stack up compared to your peers. Since money is often a taboo topic that doesn’t really get talked about in regular conversation, let’s look to the numbers.
And while statistics can seem confusing & numbers vary depending on the source, we hope to break it down & provide some clarity to give you a way to gauge how you’re doing with your personal finances.
The Bureau of Labor Statistics categorized the data into median earnings by age. As you can see, on average, the median annual income for those 45-54 years old is the highest, while those just entering the workforce at 16-24, earn the lowest income on average.
Here we look at the annual income of similar age ranges by gender. While men and women both reach the highest median earnings from age 55-64, women, on average earn $15,392 less a year than their male counterparts. This could be because women tend to enter lower paying “caring” professions, like nursing or teaching for example. These stats don’t account for job seniority or education, they are just the data comparing two variables. Gender by age when it comes to average annual income.
Where you live can vastly affect how the annual income you bring home. The cost of living, industries present in your state, and many other factors can influence your income for the same job. We looked at the median household income by State. Keep in mind this includes 1-income & 2-income households.
The state with lowest median income is Mississippi at $42,009 while the state highest median income is Maryland, ringing in at $78,916.
Take a look below to see where your state measures up.
Median Household Income
Median Household Income
On average, Asians in the U.S. tend to earn more than any other race.
Below we look at the amount of savings the average household has divided by age group. These numbers show us the average savings regardless of your relationship status or whether you have children or not. This data includes savings information from single income earners, dual income earners with no kids, single parents and couples who have children. The age group with the most in savings on average is the group 55-64, possibly because they are gearing up for retirement and are at their greatest earning potential while nearing the end of their careers. They have more money to put away into savings.
Over half of Americans will rely on income in a standard (very low-yielding) savings account when they retire. And while 68% of Americans have a savings account, only 45% have a retirement savings account, and only 32% have investments beyond this. The age for retirement may continue to creep up due to lack of savings, along with the need for health insurance as medical care tends to be a bigger cost in the later years.
On average, Americans are only saving 5% of their income, which is much lower than the 10-15% of income that financial professionals recommend. Financial professionals warn that 5% savings will not be enough to retire off, since Social Security benefits will be unlikely to cover expenses. People will have to keep on working into their golden years.
Most financial experts recommend the 10-15% of income be put into a retirement account. If you bring home $5000 a month in take home pay, 10-15% of that number is $500-750/month which should be going toward retirement, while 5% (the average amount Americans save) is only $250 a month. Keep in mind, that 10-15% might include pretax contributions and employer matches. Currently only 35% of Millenials have a company 401k or other retirement account.
A budget is a written plan for your money. Those who keep a budget can see exactly where their money is going and then can make a plan to increase savings, pay off debt, and adjust spending. Any financial expert will tell you that a budget is absolutely necessary. However, in America, only 41% say they have a budget, while the others have no written, formal budget plan.
With 19% of Americans living paycheck to paycheck, and 40% Americans reporting they wouldn’t be able to cover an unexpected $400 expense, a budget is a crucial tool to work toward your financial health and goals. 10% of American adults have also admitted that they have had to receive financial help from someone outside their family.
Credit card debt is also on the rise, and it’s no wonder. Americans turn to credit if they have no money set aside for unexpected expenses, like the ever-increasing out of pocket costs for healthcare and prescriptions. Unexpected medical expenses can significantly impact your personal finances. In fact, in 2018, 1 out of 5 adults had a significant amount of medical bills to pay. The median cost of those ranged from $1,000 and $4,999. Of the adults with medical expenses, 40% of those have unpaid debt from medical bills.
So what are Americans spending their money on? The latest data at the time of this writing, the most recent data Bureau of Labor Statistics from 2017 show the average Americans’ spending.
% of Spending
transportation - auto loans, repairs, maintenance & fuel
food - include groceries and restaurants
personal insurance & pensions - includes life insurance & social security
healthcare - includes health insurance and other costs
various other categories - reading, personal care, alcoholic beverages, etc
clothing and apparel
Housing accounts for the biggest chunk of spending at 33.1%. This number includes mortgage or rent, utilities, repairs, household operations, cleaning supplies & furnishings.
Transportation is next biggest expense at 15.9%, which accounts for auto loans, repairs, maintenance and fuel. 12.9% of our budget is spent on food, which accounts for groceries and eating at restaurants. 11.3% goes toward personal insurance and pensions, so that includes things like life insurance & social security contributions. Healthcare, which includes health insurance & other costs, is up to 8.2% of our spending. The rest of the categories include entertainment, clothing, miscellaneous, clothing, cash contributions and finally, 2.5% on education.
Another point to note is that data above does not account for paying credit card bills. With the national average household having over $5000 in credit card debt, it would be interesting to see what percentage of Americans’ income goes to repaying credit card debt.
Just around 87% of American families are in debt. The majority of their average debt include mortgage debt, but can also include credit card debt and others. The median average as of December 2018 is $135,768 per household.
The average debt of families as of December 2018 is $135,768. The amount and type of debt varies between age groups. Here’s the median debt by age group
Source of Debt
Credit cards & student loans
Surprisingly, on average, we spend the least amount on our education per month, but student loan debt is second only to mortgage debt in America. In fact, there are many Americans over the age of 60 that have student loan debt, and that number is increasing.
Forty million Americans have student loan debt, and 14% of those owe more than $50,000. The percentage of Americans with student loans who default is at least 28%.
Depending on who you ask, some will say the career afforded student debt is worth the expense. People with higher education carry more debt. And while on the surface it might seem that higher education is well worth it, if you can’t save for retirement or unexpected expenses due to student loan debt, you very well may be in the workforce long after “retirement age” if you are unable to save.
Below you’ll find recent information from the Bureau of Labor Statistics on the average annual income by education.
Level of Education
Average Annual Income
Less than high school diploma
High school education
2 year college degree
College degree (4 year)
Advanced degree (Masters or Doctorate)
Right now the lifetime earnings of having a Bachelor’s degree is $1.8 million as compared to $900,000 with a high school diploma. With the increasing need for trade workers in the United States, it will be interesting to compare these numbers in the future.
Level of Education
Average Lifetime Earning
High school diploma
downloads and resources
Download web optimized versions of our data charts and infographics.
If you’re just learning to budget and evaluating your money & financial health, take heart. These personal financial statistics are averages, and no matter where you compare, you can work to change them. There are many different financial programs out there to help you get out of debt, start saving for emergencies & the future, managing your spending to live within your means, raising your credit score, and investing for the future.