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This was the first year that I actually wrote down goals for myself. I’ve always set mental goals, but there is something solidifying about writing them down. I set two main financial goals for myself for this year. The first was to increase my net-worth by 25%, and the second, save 70% of my take-home pay.
I think that I will be able to reach my net-worth goal for the year. However, it looks like I may fall a little short when it comes to saving 70% of my take-home pay.
Recently, I stumbled upon a NerdWallet study. They surveyed the average American’s top 10 financial goals over the next 10 years. Truthfully, I couldn’t wait to read the study’s findings. I’m always curious to know how people go about their personal finances.
Unfortunately, as I began to read the list, I became a little depressed. Some of the goals that people put on the list left me scratching my head. So, here is some running commentary starting from the bottom to the top of the average American’s top financial goals. Enjoy!
10. Saving for a Wedding – (8% of Americans are saving for this)
Every year, The Knot provides a breakdown of the cost of an average American wedding. In 2016, it was a whopping $35,329. As you can imagine, costs will probably continue to rise.
Breakdown of the Average American’s Wedding Budget in 2016:
| Category | National Average Spending, 2016 |
| Overall Wedding (excluding honeymoon) | $35,329 |
| Venue (reception hall) | $16,107 |
| Engagement ring | $6,163 |
| Reception band | $4,156 |
| Photographer | $2,783 |
| Florist/decor | $2,534 |
| Ceremony site | $2,197 |
| Wedding planner | $2,037 |
| Videographer | $1,995 |
| Wedding dress | $1,564 |
| Rehearsal dinner | $1,378 |
| Reception DJ | $1,245 |
| Transportation | $859 |
| Ceremony musicians | $755 |
| Wedding cake | $582 |
| Invitations | $462 |
| Groom’s attire and accessories | $280 |
| Officiant | $278 |
| Favors | $268 |
| Catering (price per person) | $71 |
| Source: The Knot
|
Clearly, hosting a wedding is not cheap. You can see why so many Americans are saving for their dream weddings.
9. Saving to Have Children (8%)
In a recent post, I wrote about the cost of raising children. The average child in America costs $233,610 total, to raise until the age of 17. This equates to around $14,000 a year, according to the latest figures from the Department of Agriculture. The USDA also suggests that this estimate varies greatly depending on which part of the country you reside.
| Location in the US | Total Cost |
| Northeast | $253,700 |
| West | $235,140 |
| Urban Areas in the South | $221,730 |
| Urban Areas in the Midwest | $217,020 |
| Rural Areas (all over) | $193,020 |
Thankfully, there are mitigating strategies to lower costs, such as shopping at thrift and consignment stores. Raising children does not have to be as expensive as the experts tout.
8. Starting a Business (10%)
I was really surprised when I saw this on the list. I didn’t realize 1 out of every 10 people is saving money to fund a new business. However, it makes sense when you dig into the numbers.
Since 2012, 13% of Americans have started or are running a business in the United States, which is the highest amount of new entrepreneurs since 1999.
According to BizJournal, the median entrepreneur requires $15,000 in order to start up their small business, with 80% of the money coming from friends, family or personal savings.
7. Buying a Home (23%)
According to the National Association of Realtors, nearly 8 out of 10 of non-homeowners indicate that owning a home is part of the American dream.
The average down payment to buy a home in the US is 11%. For those under 35 years old, the average down payment is 8%. Since the average price of a new home is $385,200, the average American must save around $42,000 for a down payment on a new home. For those under 35 years old, this figure is almost $31,000.
6. Buying or Leasing a Car (27%)
The average age of a vehicle on the road today is at an all time high of 11.6 years old. The length of vehicle ownership has extended to almost 6.5 years. Interestingly enough, people keep used vehicles on average around 5.5 years.
I always thought my 9-year-old vehicle was “old”, but in reality it hasn’t yet reached the average age of a vehicle on the road.
5. Opening a Retirement Account, or Ramping Up Contributions to an Existing One (28%)
This percentage is a lot lower than I would hope. According to Go Banking Rates, 1 in 3 Americans has $0 saved for retirement. 75% of Americans have less than $100,000 saved for retirement. Thus, I would hope that more than 28% of people would want to increase their retirement savings over the next 10 years. As I stated in related articles about the average American’s IRA and 401(k) balances, there is a lot of room for improvement when it comes to saving for retirement.
4. Saving for Vacation (31%)
This one shocked me. I am a big proponent of vacationing and the benefits that follow from some time away from the office. However, I couldn’t believe that people prioritize their vacation plans over saving for retirement.
The average cost to vacation in the U.S. is $144 a day or roughly a $1,000 a week. In terms of international travel, the cost is almost twice as much at $271 a day or roughly $1,900 a week.
Even though traveling can be expensive, I would have assumed that saving for a vacation would be further down on the list.
3. Avoiding Further Debt (42%)
According to data by Experian, the average American dies with $61,554 of debt, including their mortgage. Excluding their mortgage, the average American dies with $12,875 of debt.
This seems like a lot of debt to carry so late in life. The average male lives until 77, while the average woman lives until 82.
I would love to leave a legacy for our children such that they will receive an inheritance. I would hate for our children to have to sell our assets after my wife and I die in order to pay off our debts. This is why my wife and I try our best not to carry any debt.
2. Saving More Money (53%)
Currently, 57% of U.S. adults have less than $1,000 in savings. 39% of adults have no savings at all. As you know, I encourage people to set aside an emergency fund that could cover 3-6 months worth of expenses. After you accumulate enough in your emergency fund, you are able to invest any additional money.
Do you wonder why most Americans don’t have enough saved? Because they just don’t have enough, apparently. 54% of Americans say that their financial management would be easier if they had more money. This doesn’t seem like a valid excuse though, as 41% of people making $100,000 or more each year stated life would be easier if they had more money.
1. Paying Down Debt (58%)
Yippee! I was happy to see this as #1. It tells me that most people recognize that they need to address their debt. The average American with credit card debt is almost $16,000 in debt. Although the scary aspect is that 87% of Americans rate their money management skills as fair, and 59% of Americans rate their ability as excellent/good.
If they’re looking for a jumpstart, I’d be remiss not to mention my post on How to Be Debt-Free.
Maybe I shouldn’t be but I’m a. It surprised that saving for a wedding made the list.
My wedding didn’t even come close to those costs, thankfully.
Wes recently posted…October 2017 Blog Numbers
Should read ” a bit surprised”
Gotta love autocorrect on an iPhone…
Wes recently posted…October 2017 Blog Numbers
Sounds like you could post about this if you haven’t – would love to read how you saved.
Chris @ Duke of Dollars recently posted…DoD Health Savings Account (HSA) 101: What, How, and Why You Should Take Advantage P1
Thanks for sharing Wes!!! Weddings are definitely a huge cost in my area. I have heard more couples talk about saving up for their wedding recently than I can ever remember, although I wish I heard them talk about retirement like they do about their weddings 🙂
Love seeing paying down debt as #1.
The saving for a wedding one continues to make me cringe. 30K? Not looking forward to the cost, definitely looking forward to a wedding haha.
I once asked my girlfriend if she would prefer to get a 2,500 ring and 2,500 of a good stock if I had 5K saved for an engagement ring and we reached that level. She said she would be up for that as it can help with long-term for future kids with their college expenses vs being spent on a ring.
Talk about an exciting moment in our dating story LOL
Chris @ Duke of Dollars recently posted…DoD Health Savings Account (HSA) 101: What, How, and Why You Should Take Advantage P1
Sounds like you have an awesome wife!!! I asked my wife what would have happened if I said that and she just smiled. I’m not sure what that means 🙂
It sounds painful to save in order to pay off debt and avoid debt. Debt seems to be on everyone’s mind. But when I think about, it’s exactly what Mr. FAF and I are trying to do. We want to avoid consumer and emergency debt and try to pay off our mortgage among other goals.
Some of the goals above might sound so unreasonable, but I think it’s still good that people are trying to save for something instead of racking their credit cards 😀
Ms. Frugal Asian Finance recently posted…Real Estate Scam, Overpriced Stock Seminar & Investment Lessons
I definitely agree that it’s important for folks to have financial goals, especially when it comes to savings. It’s too easy to mindlessly spend these days. Especially in our consumer driven society 🙂
Yay!! I’m happy to see people care about paying off debt! I guess many of us don’t actually make it happen though, eh? This is why the pursuit of FIRE is so crucial!
Mrs. Picky Pincher recently posted…Is college worth it?
Thanks for stopping by Mrs. Picky Pincher!!! I totally agree with you it’s so important to keep your eye on the prize 🙂
MY wedding unfortunately cost more. I don’t regret it but I wouldn’t do it again. GLad to see people are saving too.
Thanks for sharing!!! I was incredibly lucky that our wedding didn’t go nearly as high as some that I hear. Costs from Weddings can quickly escalate 🙂
I found this really interesting. There certainly are some good financial goals on the list. Given the priorities, however, you can see how an individual could get buried in debt early in life. Take on debt for college, put the wedding & honeymoon on the credit card, buy a house with mortgage and drive a car that’s leased. With all those monthly payments. No wonder the average American dies with debt. We don’t live long enough and make enough money to pay it all off. Tom
Tom recently posted…Where I Went Wrong….with General Electric (GE)
Great points Tom!!! Once the cycle of debt begins it’s incredibly difficult to move past it. It seems like you just keep digging and digging and digging until it’s much too late.
great piece – you mind if I write a post on my blog that parallels this to our parallel expenses.
Sure go ahead 🙂
Wow, almost 60% for paying down debt. That is great and I am actually surprised that it is this high, but that’s good. Happy to hear people are focusing on this. Also know people that save for a vacation before saving for anything else, but still surprised to see this that high on the list.
FIbythecommonguy recently posted…Net Worth #7 – Oct ’17
Thanks for stopping by!!! I know people that save for vacation above everything else as well. Definitely a bit surprising but when your philosophy is carpe diem 🙂
I can see where you would want to save money for your wedding but $35K for a wedding? I guess we all have different priorities. I could never spend 35K on a wedding but I could probably spend it on travel!
Glad to see #1 as paying down debt.
Caroline recently posted…Are You A Blog Addict ?
$35k is a huge amount of money. I know that things can quickly add up in expensive areas. I’d be curious what the average cost is per state 🙂
I’m not surprised wedding made the list. Actually I thought that was going to be #5 or higher. Saving money for Vacation amuses me though…to me vacation is when you have money leftover. Not designate money to it.
Lily @ The Frugal Gene recently posted…What Is The REAL Cost of Raising a Kid If Done Frugally?
I’m with you Lily!!! Vacations are awesome but not better than actually being able to retire 🙂
Looks like people have decent intentions with what they should do with their money it is just the action part that kills them.
Also, I know I have read it several time but I don’t know how in the hell you can save anything close to 70% of take home pay with one income and two kids. Huge props on that one.
Grant @ Life Prep Couple recently posted…Don’t Trust The Spreadsheet: How We Paid Off $34K Of Debt In Five Months
Thanks for stopping by Grant!!! The key for us is that we don’t have any debt, with a fully paid off house, otherwise we’d never be able to do it 🙂
The saving for a business one is really interesting. Like you, I am very surprised to see 10% of people have that as a goal. I would love to see more info on that like what types of business or what age demographics are saving to start a business or what the current occupation is of those savers.
Matt @ Optimize Your Life recently posted…How I Invest – Investments
I love hearing that people are trying to start up small businesses. I have to admit I love watching Shark Tank and The Profit. Anything I can learn, just in case a great idea pops in my head one day 🙂
I’m not surprised to see weddings on here, although the average amount does make me cringe. I felt a little differently about the vacation savings…at least they’re not just planning to charge it on their credit cards. The real shock for me was the average age of cars on the road today. Everywhere I look I see people buying new cars so the fact that we’re keeping cars longer gives me some hope.
Gary @ Super Saving Tips recently posted…Frugal Ideas for a Cheap, Low Cost Weekend
I recently read that there are more cars 11-20 years old than ever before. Atleast companies aren’t putting out junk 🙂
I was hoping saving for retirement would higher than five but I guess most value saving for a vacation more. And when you think about it saving up for retirement will set you up for having a lot of vacationing. Most look into the short term(taking vacations) than the long term(retirement) when they plan their goals
Kris recently posted…So We’re Looking for a Home
I don’t think I could say it better. Why go on one vacation in your 20s when you can go on multiple vacations in your 60s 🙂
I would guess that a similar survey in Canada won’t turn up looking much different. At least people are taking paying down debt seriously!
Thanks Enoch!!! I recently read that Canadians spend more of their income than Americans 🙂 So I wouldn’t be surprised either.
How ridiculous! I garner from this list that people take the averages and believe that they are set in stone. I thought our wedding was expensive at $25,000 total, though we only paid for a small fraction of that. If your wife needs a $6,000 rock to know you love her, maybe she isn’t the right one… I bought a engagement ring for $500 off of eBay and a wedding ring for $200 off of Etsy. They don’t need to be anywhere near the “average” price or the 2 months salary popularized by DeBeers.
I love vacation too, and also think it helps to recharge your batteries.
Justin @ Atypical Life recently posted…4 Vital Personal Finance Lessons Learned From Apple’s Latest iPhone X Release
Thanks for sharing Justin!!! I definitely agree but I know some women that think much differently. I had one friend who’s wife told him if he didn’t spend $10k don’t even bother proposing. Their marriage is going great so far but I have to admit I was a bit spooked when I heard that.
Interesting list, thanks for sharing. I can agree with half of these anyway. 1-3 make sense, as well as 5 should be on the list. Vacation I wasn’t expecting to see that high. And It’s crazy how expensive weddings are for just one day of your life. Wasn’t expecting to see start a business on here either, but that is cool people want to try to start something. Either to leave a legacy or better themselves.
Like you I was surprised at the list. It’s amazing what people value 🙂
I’m not too surprised to see wedding on the list. But years after couples get married, I’ve found that some regretted paying so much and said they could have done something more worthwhile like saving for a home or retirement etc. I think that sometimes for sure.
SMM recently posted…Make Personal Finance Great
Thanks for sharing SMM!!! Like you I have heard a couple of friends say what they wish they did with the money. Obviously it’s too late now but they too were disappointed at their former selves.
It was an interesting article to read. I’m not an American and I’m only 23 but a lot of the things above look very reasonable to save money for. My biggest goal is to never get into debt even though I know that in today’s world it’s almost impossible.
thanks for stopping by Elvi!!! If you can avoid debt you will be way ahead of the game. I encourage you to stay that way 🙂
I was going to say my wife and I didn’t save for our wedding, but come to think of it, we did save a little. Thankfully her parents footed most of the bill (although if they didn’t I don’t think we would’ve spent nearly as much.)
We also have a child on the way and are definitely saving for that life-changing event – which also might mean we’ll need a bigger car in a few years. We’re kind of saving for a new (to us) car too, but that’s more saving for car repairs than for a new car. We just might use the car-repair fund to purchase another car.
Thanks for sharing Joe!!! Like you we’re currently in saving mode for potentially a new to us car. If we have anymore kiddos we won’t be all able to fit in one car. So it’s definitely high on our list 🙂
It is so good that people are worried about paying down their debt more these days.
I definitely agree Danielle!!! Happy to see people recognize that debt is important to pay off 🙂
Hey MSM! This post makes a good bedtime story! I really enjoyed reading it!
I’m surprised with some of the results. Overall, saving for retirement is great! Starting a business caught my attention as a good thing as well. But I was scratching my heading, wondering what happened to the financial goal of earning more money, and investing? And when I say investing, I don’t mean saving for retirement, buying a house, or starting a business lol. I thought investing their money would be one of their top 10 goals, but I guess not ………
Anyway, this was fun to read and good to know! Thanks for sharing this post!
fin$avvy panda @ finsavvypanda.com recently posted…Here’s a List of 15 Financial Goals – What’s Your Score?
I meant to say “scratching my head” — oopsies, typo up there lol…
fin$avvy panda @ finsavvypanda.com recently posted…Here’s a List of 15 Financial Goals – What’s Your Score?
Glad you enjoyed the read 🙂 I definitely agree I don’t think people view investing as a goal, even though they really should be 🙂 Thanks for stopping by!!!
It’s crazy that more people are saving for a vacation rather than their retirement. Shocking!
I know right!!! Who knew that vacation was more important than retirement 🙂