Three in five Americans pay more attention to how their friends spend compared to how they save.
Americans remain optimistic that they will be wealthy at some point in their lives, and two in five believe they will achieve that goal within a decade. Yet, many obstacles and bad financial habits stands as road blocks to successfully accumulating wealth.
More than a third of Americans admit “their spending habits have been influenced by images and experiences shared by their friends on social media and confess they spend more than they can afford to avoid missing out on the fun”, according to Schwab’s 2019 Modern Wealth Index Survey.
Americans struggle to save, invest and accumulate wealth…they:
- Live Paycheck-to-paycheck – A majority (59 percent) live paycheck to paycheck
- Carry Credit card debt – Nearly half (44 percent) typically carry a credit card balance
- Lack an Emergency fund – Only 38 percent have built up an emergency fund
- Spend on Non-essentials – On average, they spend almost $500 a month on “non-essential items”
“The burden to ‘keep up with the Joneses’ has been part of American for decades, but it appears that social media and the fear of missing out (FOMO) have increased the pressure to spend,” said Terri Kallsen, executive vice president and head of Schwab Investor Services. “Spending is not the enemy, but when we allow social pressure or other forces to lure us into spending beyond our means, it can impact long-term financial stability and become a larger problem.”
People need to gain more insights about their own habits of saving, spending, investing and accumulating wealth. Schwab’s survey shows that more than 60 percent of Americans who have a written financial plan feel financially stable, while only a third of those without a plan feel that same level of comfort.
References:
- https://content.schwab.com/web/retail/public/about-schwab/Charles-Schwab-2019-Modern-Wealth-Survey-findings-0519-9JBP.pdf
- https://www.aboutschwab.com/modernwealth2019
- https://content.schwab.com/modernwealth/?bmac=VEH