Americans Are Budgeting To Get Out Of Debt, Debt.com Survey Says

Debt.com’s 2023 Budgeting Survey shows that 85% of Americans are budgeting. That’s a statistical tie from 86% last year, but it’s a huge jump from five years ago, when 69% reported budgeting for income and expenses in 2019.

For six years, Debt.com has surveyed Americans about their budgeting behavior. More than 8 in 10 now have a monthly budget, a number that has been trending upwards since the start of this survey in 2018.

Debt.com points out that one of the main reasons for the growth is also the most alarming, with nearly 1 in 4 saying that debt “prompted them to start budgeting.” This figure has skyrocketed more than 13% in just five years. Budgeting seems to work for them, because nearly 9 out of 10 say it “helped them get out of or stay out of debt.”

That worries Debt.com president Don Silvestri, who believes Americans should budget in good times and bad.

“If you only create a household budget because you are worried about debt, what will happen when the worst is behind you? Will you stop budgeting?” Silvestri wonders. “If that happens, you’ll stop budgeting, you’ll be in financial trouble again, and then you’ll start budgeting again. Budgeting should be preventative medicine, not emergency surgery.”

In the second quarter of 2023, the Federal Reserve Bank of New York reported that household debt exceeded $17 trillion and credit card balances increased by $45 billion, leading to outstanding debt to a record of more than $1 billion dollars. Those numbers have changed the way Debt.com president Howard Dvorkin approaches the budget.

“When I became a certified public accountant three decades ago, I urged clients to budget. Given the staggering statistics, I now insist that they do so,” says Dvorkin. “The really scary part? With personal debt mounting so high, budgeting alone won’t solve the money problems it once did. The budget is now a diagnostic tool. It can tell you when to see a professional, before it’s too late.”

Important survey findings:

· 50% of those surveyed affirm that they live from paycheck to paycheck.
· 39% say they make a budget to increase their wealth.
· 23% say they make a budget to help with their debt.
· 16% say they budget to manage rising prices and inflation.
· 15% say they budget to meet their retirement goals.
· 6% say they budget because of divorce or the loss of a spouse.
· Among those who say they don’t budget, the most common reason cited (25%) was that it was too time consuming.
· Another interesting finding was that the majority of respondents, 39.34%, say they prefer to budget the old-fashioned way using pencil and paper instead of digital tools.

For more details of the survey and to know how to prepare an efficient budget, enter here.

Keep reading:
· A third of Americans admit that they cannot sleep at least one night a month due to the uncertainty in their finances
US parents are looking for second jobs or dipping into retirement savings to help pay for their children’s education
Americans are cutting back on impulse buying, survey reveals