Fewer Americans are Budgeting in 2019 -- Although They Think Everyone Else Should

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Debt.com's annual budgeting survey shows fascinating contradictions this National Financial Literacy Month

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Apr 04, 2019, 08:45 ET

FORT LAUDERDALE, Fla., April 4, 2019 /PRNewswire/ -- Americans know they need to create a household budget – and stick to it. They know this country won't dig itself out of oppressive personal debt that now tops $4 trillion dollars unless we monitor our spending. However, for some reason, fewer of us are doing it this year.

Younger people are budgeting more than their elders. Saying and doing are seldom the same. Despite feeling that everyone should use a budget, only two-thirds of respondents say they do. 67% of people have a budget - 33% don’t maintain a budget.

Last year's Debt.com poll of more than 1,000 Americans revealed precisely 70 percent of respondents had their family on a budget. In 2019, however, that dipped to 67 percent. Meanwhile, when Debt.com asked "should everyone" budget, only 19 percent said yes in 2018. In 2019, that rose to 25 percent.

That contradiction is not unusual, says Howard Dvorkin, CPA and chairman of Debt.com. Many Americans think they are smarter than their neighbors when it comes to money. "In two decades as a financial professional, I can't tell you how many people tell me, 'I know debt is a huge problem in this country, but I thought I could handle it,'" Dvorkin says. "It's human nature to expect the best and not plan for the worst, so many otherwise smart Americans refuse to budget – because they don't think they need it. Then a serious illness or accident keeps them out of work. Or they simply get laid off. Or they get divorced. Or a natural disaster strikes. That's when all those years of budgeting help you weather the storm."

There was one other "non-surprise" in the 2019 budgeting survey, Dvorkin says – and one big surprise.

No surprise: Women budget better than men: For instance, more women (97 percent) than men (90 percent) said, "everyone should budget." More men (11 percent) also bragged they "never overspend" compared to women (6 percent). "Ask any financial coach, credit counseling agency, or personal finance blogger who usually initiates a conversation about a couple's finances," Dvorkin says. "More often than not, it's the woman in the relationship. Why is that? I'm sure the reasons are many and complicated, but it is true."

Big surprise: Young people like budgeting: When asked, "Do you use a budget," those older than 39 were eclipsed by younger consumers.

22 and under – 50 percent use a budget
23-38 years old – 74 percent use a budget
39-54 years old – 67 percent use a budget
55 and older – 67 percent use a budget

This doesn't surprise Dvorkin. Why? Because of fin-tech. "The days of budgeting tools being defined as a pencil, eraser, and yellow notepad are long gone," he says. "Now young people use programs like Mint and custom spreadsheets from Tiller. When you can monitor your budget in real time on an app, then you're talking young people's language."

What will next year's Debt.com budget survey reveal? Dvorkin predicts budgeting will suddenly spike if the economy retracts. It's counter-intuitive, he says: "You should budget in the good times when money is coming in. That's how you save for retirement, for a house, for college. Budgeting when times are bad may help stop the bleeding, but it won't build your bank account."

About: Debt.com is the consumer website where people can find help with credit card debt, student loan debt, tax debt, credit repair, bankruptcy, and more. Debt.com works with vetted and certified providers that give the best advice and solutions for consumers 'when life happens'.

SOURCE Debt.com