It’s a well-known fact that most Americans aren’t in great financial shape. An estimated 69% of U.S. adults have less than $1,000 in savings, while 34% have no savings at all. And the Economic Policy Institute reports that almost half of Americans have nothing to show in retirement savings either.
However, while it’s one thing to not have many assets to speak of, it’s another thing to reach the point of having a negative net worth — and that’s the category 14% of American households fall into. Negative net worth represents a financial scenario where your total debts exceed your total assets. If, for example, you have $500 in short-term savings, $4,500 in a retirement account, and $6,000 in credit card debt, you’ll have a net worth of negative $1,000.