69% of Americans have less than $1,000 in a savings account.
Most Americans’ financial worlds are balanced on the edge of a knife. Accidents, injuries, illnesses, maintenance needs, death, disability, divorce, layoffs, legal liabilities, identity theft, arrests, substance addiction, scams, and even a new or bad boss are all everyday events that can trigger financial collapse.
Financial peril means being one life event away from needing assistance for basic needs. We all know people who have been through these events—a surprise diagnosis, a car accident, a mental health issue, or even an affair that leads to a separation—and suddenly the family cannot make ends meet.
And this is not just a scarcity issue. Only 45% of Americans earn more than they spend every year, and about one in three workers making over $200,000 lives paycheck-to-paycheck. Sadly, regardless of income, many Americans live up to and beyond their means.
One explanation is that personal responsibility has eroded over time. And while there may be some truth to that, the reality is that today’s financial environment makes it more difficult than ever to make economic progress.
50 years ago a home in the Denver area cost about twice a household’s annual income. Today the average home price is 5.2 times median household income and rising. Education costs have risen nearly 300% in just two decades. Health care costs are increasing at more than double the rate wages are rising. While inflation models report only modest increases, the biggest costs for most families are rising far faster than their incomes.
Credit card debt hit an all-time high in February of 2020. The #1 reason consumers add to their credit card debt? Groceries. The average credit card rate is over 20%. And those with access to credit are fortunate—the average payday loan charges 391% interest.
Financial peril is not eliminated with more income, benefits, or perks. Reaching financial stability—and eventually prosperity—means following a personalized pathway that addresses the relevant stressors, risks, and obstacles each individual faces.
Financial stability means having the right resources and systems in place so that a single event cannot bring financial ruin to you or the people who depend on you. It consists of the proper savings, protections, and planning that allow you to avoid high-cost debt or impoverishment when a shock financial need arises. It is a personal target—everyone has specific needs to reach stability based on their individual circumstances. Most importantly, financial stability means not having the daily worry that comes with knowing you are always on the brink of financial disaster.
Let’s work together to get your entire team to financial stability and beyond.