The Power Of Budgeting

THE POWER OF BUDGETING AMONG RETIREMENT PLAN PARTICIPANTS 27% BUDGET of 401K Participants BUDGETERS NON-BUDGETERS Average Age Own a Home College Graduates High School Smoke or live Only Average Age Own a Home College Graduates High School Smoke or Iive Only with a Smoker with a Smoker 45 81% 84% 6% 11% 45 73% 58% 26% 23% BUDGETERS ARE ABLE TO NON-BUDGETERS ARE PREPARE WHILE WORRIED MORE FOR THE FUTURE ABOUT SHORT TERM FINANCES Most Important Time Period When Planning for Savings & Spending O Budgeters O Non-Budgeters 1 35% 1 30% 1 25% 20% 1 15% 10% Less Than a Year Next Few Years 5-10 Years 10+ Years How does budgeting affect your finances over time? PRESENT DAY EFFECTS Families who do not budget are MORE LIKELY TO SKIMP ON MEDICAL CARE LATE! ($ Late Payments Liquid Assets 10% 22% Folks who don't budget are $12,600 $5,200 twice as likely to pay their bills late compared to those who do keep a budget. Budgeters have about twice the liquid assets as Non-Budgeters. SHORT TERM EFFECTS of Budgeters have enough saved for emergencles 401K participants who keep a budget are 27% TO HAVE SUFFICIENT 50% EMERGENCY MORE LIKELY SAVINGS of Non-Budgeters have enough saved for emergencles 19% Credit Card Debt Financial Literacy 35% 50% 26% 17% Only about a third of Budgeters carry credit card balances, compared to half of Non-Budgeters. Budgeters are more likely to have ccurat an understand of their emergency savings needs. LONG TERM EFFECTS Households that budget are BETTER PREPARED FOR 31 MONTHS RETIREMENT 20 MONTHS Their savings will last 50% longer in retirement 401k 401K Deferral Rate 401K Balance $66K 6.4% 5.2% $30K Budgeters are able to contribute a higher percentage of their paychecks towards retirement savings. Those who budget have more than twice the amount of money saved for retirement as those who don't budget. When comparing workers with the same wages, Budgeters have $150,000 MORE IN NET WEALTH Median Net Wealth $289,000 A typical 401K participant who budgets has more than double the net wealth of a participant who does not. $129.000 G Budgeting Works Did you learn something new? Share the knowledge! HelloWallet. www.hellowallet.com *Source: 2010 Survey of Consumer Finances