13% of Americans think they're better with money than everyone they know - and they're wrong
- About 40% of Americans are in some type of debt and don't save for retirement. Yet, 32% of this group think they're doing better financially than their peers.
- A recent survey by Insider and Morning Consult asked around 2,000 Americans about their financial health for a new series, "The State of Our Money."
- Most Americans don't talk about money with their friends and neighbors, so a lot of our perceptions and comparisons are based on optics.
- Regardless of income level, the foundation for good financial health is saving for the future and avoiding high-interest debt.
- Read more personal finance coverage.
There are a few traditional markers of good financial health. If you're debt-free and saving money for the future, you're doing well.A recent survey by Insider and Morning Consult asked around 2,000 Americans about their debt, earnings, and savings for a new series, "The State of Our Money."Advertisement
The data revealed that many Americans feel confident in their finances when they probably shouldn't. About a quarter of people with debt and no retirement savings still consider their financial health to be in good or very good shape.
When asked to compare their financial situation to their peers', about 43% of Americans think they're better off, while 38% think they're worse off. About 19% said they didn't know.In total, about 40% of the survey respondents have some type of debt and don't save for retirement - two big signs that they're not on the best financial track. Still, 32% of the respondents in that group think they're somewhat or much better off financially than their peers. In total, that's about 13% of Americans.
Most Americans don't talk about money with their friends and neighbors, so a lot of our perceptions and comparisons are based on optics. Someone who has a high-status job, lives in a bigger house, or takes more vacations may seem better off financially.But the traditional markers of good financial health exist for a reason. It's difficult for anyone, regardless of income level, to get ahead and build wealth when they're stuck in debt. Repaying debt leaves little, if any, money left over for savings. Not to mention, debt begets poor credit - two of the biggest components of a person's credit score are debt payment history and current balances.In addition to good credit, certified financial planner Brandon Renfro told Business Insider there are three major signs of good financial health: the ability to navigate job loss, the ability to retire on your own terms, and the ability to change jobs or take time off. The common thread among these is saving money, whether in a short-term emergency fund or retirement account.Advertisement
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