In a disconcerting revelation, the latest anonymized user data from Planswell unveils a dual challenge facing Americans across all income groups: a marked decrease in average monthly savings and a simultaneous rise in credit card debt.
The user data, comparing 2022 to 2023, not only uncovers the strain on household finances, but also highlights the alarming trend of increasing credit card debt as a percentage of income. In today’s tight economy it is more important than ever for consumers to seek professional financial planning to help reverse these worrying trends, helping them maximize savings and minimize debt.
The following is based on anonymized, self-reported financial data of Planswell users. During 2023 Planswell helped its users plan over 73 billion dollars in assets, helping over 160,000 families improve their financial future. Since its inception, Planswell has helped consumers plan over a quarter trillion dollars in assets and growing.
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Average Monthly Savings Erode Across Income Brackets
The data reveals a concerning decline in average monthly savings across all income levels. In the less than $75,000 income bracket, individuals experienced a staggering 41% reduction in average monthly savings. Similarly, the $75,000 to $100,000 and $100,000 to $150,000 income brackets saw 21% and 13% decreases, respectively. Even the greater than $150,000 income bracket witnessed a 2% dip in average monthly savings.
“These significant reductions in average monthly savings underscore the widespread financial strain affecting Americans from all income groups,” stated Eric Arnold, CEO of Planswell. “The decline in savings rates is a critical indicator of the economic challenges faced by households, emphasizing the need for professional support and financial education.”
Mounting Credit Card Balances Add to Financial Burden
Compounding the distressing savings trends, Planswell’s user data also reveals alarming increases in average credit card balances. Individuals in the less than $75,000 income bracket experienced the lowest increase at 6%, most likely due to lower credit availability. The three higher income brackets saw larger increases in credit card balances of 12% to 16% from 2022 to 2023.
“The surge in average credit card balances further exacerbates the financial burden on individuals and families,” expressed Arnold. “This heightened reliance on credit may indicate a coping mechanism for immediate financial needs, but it also poses risks to long-term financial health.”
Consumers with Credit Card Balances on the Rise
Digging deeper into the data, it is evident that the amount of users carrying a credit card balance has increased for all Americans, regardless of income level. To that point, the percentage of Planswell users reporting credit card debt has risen by a staggering 16% from 2022 to 2023.
“The percentage of credit card debt relative to income is a striking indicator of the challenges individuals face in managing their financial obligations,” expressed Arnold. “These worrying trends call for a comprehensive approach to address both the root causes and consequences of mounting credit card debt for all Americans.”
Implications for Financial Well-being
Today’s consumers grapple with escalating financial pressures, marked by reduced savings and bulging credit card balances. These dual challenges necessitate that consumers seek guidance from local financial experts to enact personalized plans that are designed to minimize these trends and improve financial wellbeing.
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