Saving & Debt | Financial Literacy for Class 6 PDF Download

Saving is an essential component of good budgeting

Some facts about saving:

• 67 percent of Americans have less than 6 months of expenses in savings.
• From 2011-2014, 24 to 28 percent of Americans had zero emergency savings.
• People ages 30 to 49 are the least likely to have emergency savings.
• 1 person out of every 5 people near retirement age has zero money saved.

Make a financial commitment that you can keep, even if it means starting small, like $50 from every paycheck or cutting out your gym membership for an extra $100 a month. Remember, this account isn’t for splurging on the latest Apple product or a Michael Kors purse. Be intentional about only using your savings for needs. Whenever you take money out, do your best to quickly replenish the withdrawal.

Developing consistent savings habits allows you to leverage time, your age, your current resources, compounding interest, investments and tax-advantaged savings.

Saving tips:

• DO set up a portion of your paycheck to automatically go to savings.
• DON’T leave a savings account as your last financial priority.

Debt

A December 2014 Federal Reserve study revealed the average U.S. household has:

• $15,611 in credit card debt
• $155,192 in mortgage debt
• $32,264 in student loan debt

In February 2018, Experian released its annual national average VantageScore, a representative credit score, was 675, up from 666 in 2014.  Still, it’s much lower than the 800 rating that qualifies to get the best interest rates when it comes time to buy a house or car.

The report also said the average consumer has a credit-card balance of $6,354.