Other Products
NYLIFE Securities
MainStay Mutual Funds
Retirement Plan Services
Quick Links
It's very tempting to overspend during the holiday season, especially during a pandemic when we're longing to see our family and friends. But before you pull out that credit card be sure to evaluate your personal situation to not add any additional debt to your financial situation.
Recently released data from the New York Federal Reserve found that Americans are sitting on a record $14 trillion of debt, including mortgages, credit card bills and student loans. Mortgages remain the largest chunk of Americans' debt, accounting for $9.4 trillion, followed by student loans ($1.5 trillion) and credit card balances ($13 billion). Despite these record numbers, Americans may be doing better than they realize when it comes to debt – and many who have tackled debt have improved key financial habits, making room to implement a protection-first financial plan.
A new survey from New York Life suggests that although debt is growing, the challenge of paying it off is not insurmountable. In fact, slightly more than a third of respondents (35 percent) say they’ve never had more than $5,000 in debt. Moreover:
“Debt can be an enormous stressor for the household, with many Americans feeling like any amount of debt is a roadblock to achieving all other financial milestones,” says Brian Madgett, Head of Consumer Education at New York Life. “However, this data paints a more optimistic picture and suggests that those struggling with debt today can overcome it by following some key steps.”
Paying debt requires discipline – A habit that has extended to other money matters
Seventy-seven percent of Boomers have more than $5,000 of debt, but they are also most likely to embrace several healthy long-term financial habits. Specifically:
Habit |
Boomers |
Gen X |
Millennials |
Gen Z |
Follow a personal budget |
42% |
33% |
31% |
22% |
Put their money towards savings |
36% |
34% |
28% |
25% |
Put their money in investments |
29% |
25% |
18% |
15% |
Purchase life insurance |
26% |
18% |
14% |
4% |
There’s Always Room for Improvement
While the data overall paints a picture of positive momentum, adults may be overestimating their financial strengths.
Roughly 4 in 10 respondents (39 percent) rate their financial habits as above average or excellent – however, the data suggests a discrepancy between their perceptions and behavior.
Financial Habit Currently Doing |
All Adults |
Following a personal financial budget |
35% |
Putting money in a long-term savings and/or emergency fund |
32% |
Contributing to a retirement fund |
25% |
Putting money in investments |
24% |
Putting money toward another long-term purchase, like a car or vacation |
24% |
Saving for or paying for a home |
22% |
Purchasing life insurance |
18% |
Contributing to a college savings plan for a loved one |
7% |
Setting aside money to care for an aging parent or family member |
6% |
Setting aside money to care for early child care, like for having a child or for daycare |
4% |
None of the above |
25% |
Adds Madgett, “It’s easy to think of having ‘good’ financial habits as simply ensuring that you aren’t spending more money than you’re taking in. While this is important, focusing on just this one aspect is a missed opportunity to implement a protection-first financial approach to ensure financial security for ourselves and our families, both now and in the years to come.”
“A protection-first approach is an important foundation to ensure financial security for ourselves and our families, both now and in the years to come.” --Brian Madgett, Head of Consumer Education
Help wanted
Getting out of debt is challenging, but according to the survey data, many adults are “going it alone.” More than one third (35 percent) say they did not have help paying down their debt when it was at its highest level. When breaking down the data according to various debt levels, this lack of support becomes even more evident:
Who helped? |
$5k-$10k Debt |
$10k-25k Debt |
$25k-$75k Debt |
$75k+ Debt |
I did not have any help |
42% |
44% |
45% |
42% |
A parent(s) |
14% |
16% |
14% |
9% |
A financial advisor |
7% |
10% |
10% |
13% |
A friend |
8% |
6% |
6% |
7% |
A book about financial help |
4% |
3% |
4% |
7% |
About one in four respondents (23 percent) say they either currently or previously worked with a financial professional. One in five respondents (21 percent) say that have not but would like to do so. The respondents who said they have not worked with a financial professional, but would like to in the future, indicated they think they would work with one when:
These findings suggest respondents may not fully realize the accessibility or usefulness of a professional as a resource to help get their money habits on track.
“It’s a savvy move to ask for help when it comes to money, whether you’re looking to get out of a rut or start accumulating wealth,” notes Madgett. “There are many resources right in your community that can offer the affordable advice and human guidance you need to achieve your financial goals.
“It’s a savvy move to ask for help when it comes to money, whether you’re looking to get out of a rut or start accumulating wealth.”--Brian Madgett, Head of Consumer Education
Methodology:
This poll was conducted between November 13-November 17, 2019 among a national sample of 2201 Adults. The interviews were conducted online and the data were weighted to approximate a target sample of Adults based on age, educational attainment, gender, race, and region. Results from the full survey have a margin of error of plus or minus 2 percentage points.
Go back to our newsroom to read more stories.
Media contact
Sara Sefcovic
New York Life Insurance Company
(212) 576-4499
Sara_M_Sefcovic@newyorklife.com
Related content