What does the average American’s financial situation look like? We’d like you to meet Mr. and Mrs. Average, who were nice enough to open up their banking, mortgage, budget, retirement, and even credit score information to us. In total, it paints an interesting and sometimes unexpected money montage of the typical U.S. household!
In 2015, the average American household income (gross) was $71,258.
With wage growth of about 4% in 2016, it’s estimated that the average American household income is now approximately $74,000.
Typically, the average U.S. household spends a little more than 80% of their gross income, leaving 19% (and change) for cash flow and discretionary spending.
When it comes to debt, the average American household owes a lot to a lot of people. In fact, the average household owes $$135,924 in debt as of 2017, including credit cards, mortgages, auto loans, student loans and other types of debt.
But the average household with a mortgage owes $180,018 on that home loan.
The typical American family that has credit card debt owes $16,245 across all of their cards.
Student loan holders owe an average of $50,868 (up a whopping $5,963 – or about 10% – from just last year!)
(Speaking of student loans, the average college graduate now leaves school with $37,172 in debt, including average monthly payments of $351 from the time they are 20 years old until 30.)
If you have a car loan and you’re the average American consumer, you have $29.058 to pay off for that auto.
While some of us make more than others, we’re a generous nation on average (although some far more generous than others). In fact, the typical American gave $5,491 to charity last year.
When it comes to paying taxes, the typical American pays an effective federal income tax rate of 13.5%, which means writing a check to the IRS for about $10,000.
But the tax payments don’t stop there since the average American also pays 9.9% in state and local income taxes, 3.3% in Social Security taxes, and 1.45% to Medicare,
Add it all up and Mr. and Mrs. Average are paying an effective tax rate of about 28% every year.
But while the average person making $50,000-$100,000 in income gave an average of $3,244 to charity, the average person making $250,000-on-up donated $21,769 to charity.
In total, 70% of Americans got tax refunds last year, adding up to $317 billion, with the average refund $2,860.
So what will the vast majority of Americans do with their refunds? Reportedly, 79% of Americans say that they’ll use their refund to pay down debt or put it in savings, 11% will spend it on a nice vacation, and 5% will buy something fun like a car, new television, or other big purchases.
According to the credit giant FICO, for the first time ever, the average American credit score (for adults) has reached 700.
When it comes to mortgage applicants, the average FICO score for a conventional mortgage borrower is 755, but it’s only 689 for FHA loans.
We have covered what we make and what we spend, but how much does the average person put away in savings? In fact, the average personal savings rate in the U.S. is now 5.5%. That can be good or bad depending on how you look at it. As recently as 2005, our savings rate was an all-time low of 1.9%. However, financial experts recommend you save at least 10-15% of your income.
The average person in our country DOESN’T contribute to an IRA (only 18% of us do).
The average American’s 401(k) balance is now $96,288.
Additionally, the average U.S. worker’s Social Security retirement benefit would be $1,363 per month, or $16,356 per year.
Considering that half of American households currently live paycheck to paycheck, it seems that the average person is not stable financially.
Last year, the average new car auto loan was $28,667, and the average loan for a used car was $17,241.59.
Mr. and Mrs. Average are also paying $499 for each car payment every month.
Among new car buyers, the average credit score was 714. But people who bought used cars had average FICO scores of only 643.
Do you want to know if your credit card’s interest rate is above or below average? According to financial surveys, here are the averages:
15.59% APR for all credit cards
12.44% Low-interest credit cards
15.63% Cash-back credit cards
14.86% Balance transfer credit cards
15.59% Airline credit cards
23.04% Credit cards for bad credit scores
The average American household makes these expenditures in their budget:
32.9% Housing
17% Transportation
12.5% Food
11.3% Personal finance
7.8% Healthcare
5.1% Entertainment
4.5% Misc.
3.3% Apparel
3.2% Charitable contributions
2.3% Education
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So how closely do YOU resemble Mr. and Mrs. Average – and how could a low-interest refinance or home loan help improve your financial situation?