"A Sad State Of Affairs" - Two-Thirds Of Americans Have No Emergency Savings
Submitted by Jim Quinn via The Burning Platform blog,
Whenever I see one of these stories about how little Americans have available for an emergency, my blood starts to boil. I understand that poor people making $25,000 per year are forced to live paycheck to paycheck. But when 63% of all Americans can’t handle a $500 emergency, and 46% of households making over $75,000 can’t handle a $500 emergency, then they are just plain stupid, frivolous, and incapable of distinguishing between wants and needs. Delayed gratification is a trait almost non-existent among Americans today.
The first thing that infuriates me is the assumption that a $500 car repair or house repair is an unexpected emergency. It’s a fucking living expense. It’s not a fucking surprise. Your car will need new tires every few years. That’s $500 or more. Your hot water heater, air conditioner, roof, windows, etc. will need to be replaced. Everyone gets sick. That is not unexpected. Anyone who lives their life as if these expenses are a shocking surprise is a blithering idiot. And this country is crawling with blithering idiots.
So the majority of Americans can’t handle a $500 expense, but for the last two years there have been 35 million new cars “sold” to blithering idiots on credit or leases. Even though they have no money, they decide it’s a brilliant idea to commit to a 7 year payment of $300 to $500 per month on an asset that declines in value rapidly. Morons abound. These are the same people who must have their Starbucks coffee every day. These math challenged boobs could defer buying a Starbucks coffee every day, save the $3, and accumulate $750 of emergency savings in one year.
Most Americans are one paycheck away from the street
Most households struggle to cope with financial surprises.
Americans are starting 2016 with more job security, but most are still theoretically only one paycheck away from the street.
Approximately 63% of Americans have no emergency savings for things such as a $1,000 emergency room visit or a $500 car repair, according to a survey released Wednesday of 1,000 adults by personal finance website Bankrate.com, up slightly from 62% last year. Faced with an emergency, they say they would raise the money by reducing spending elsewhere (23%), borrowing from family and/or friends (15%) or using credit cards to bridge the gap (15%).
This lack of emergency savings could be a problem for millions of Americans. More than four in 10 Americans either experienced a major unexpected expense over the past 12 months or had an immediate family member who had an unexpected expense, Bankrate found. (The survey didn’t specify the impact of that expense.) “Without emergency savings, you may not have money to cover needed home repairs,” says Signe-Mary McKernan, senior fellow and economist at the Urban Institute, a nonprofit organization that focuses on social and economic policy. “Similarly, without emergency savings, people could raid their retirement account.”
The findings are strikingly similar to two other reports, one by the U.S. Federal Reserve survey of more than 4,000 adults released in 2014. “Savings are depleted for many households after the recession,” it found. Among those who had savings prior to 2008, 57% said they’d used up some or all of their savings in the Great Recession and its aftermath. And another survey of 1,000 adults released last year by personal finance website GOBankingRates.com found that most Americans (62%) have less than $1,000 in their savings account (although that doesn’t include retirement or other investment accounts).
Why aren’t people saving? Millions of Americans are struggling with student loans, medical bills and other debts, says Andrew Meadows, a San Francisco-based producer of “Broken Eggs,” a documentary about retirement. Central bankers hiked their short-term interest rate target last month to a range of 0.25% to 0.50% from near-zero, but that’s still a small return for savings left in bank accounts. Indeed, personal savings rates as a percentage of disposable income dropped from 11% in December 2012 to 4.6% in August 2015, according to the Bureau of Economic Analysis, and now hover at 5.5%.
More money and education can help. The latest Bankrate survey found that savings increased with income and education: Just 46% of the highest-income households ($75,000-plus per year) and 52% of college graduates lack enough savings to cover a $500 car repair or $1,000 emergency room visit. And while those figures could still be lower, Americans are willing to cut back on at least some expenses when money is tight: 58% say they’re “very/somewhat” likely to cut back on eating out, are likely to decrease their cable bill and 41% are likely to spend less on coffee at places like Starbucks, while 39% will seek out lower-cost cellphone bills.
But while unemployment is falling (5% in November 2015 versus 5.8% in November 2014) and the Affordable Care Act has given an estimated 16.4 million people access to medical care, the amount of wealth held by the middle class is shrinking. The share of income held by middle-income families has plunged to 43% of households in 2015 versus 62% in 1970, according to a report released last month by the nonprofit think tank Pew Research Center in Washington, D.C.
* * *
There are millions of brain dead Americans who are going to reap a whirlwind of consequences when this shit show implodes. They’ll be wailing and gnashing their teeth when their years of living for today catches up to them. Too fucking bad. The only way to accumulate wealth is to spend less than you make. It’s a lesson they failed to heed, and they will regret it for the rest of their pitiful lives.
- Login or register to post comments
- Printer-friendly version
- Send to friend
- advertisements -




Cuz we're all gonna be rich someday! It's the American Dream motherfuckers.
One Paycheck Away .. Yeah, savings, right
I am continuning my pwning of everyone on CNNmoney: http://money.cnn.com/2016/01/07/investing/stocks-markets-dow-china/index...
Thanks, Mr. Quinn.
Somebody had to say it.
[golf clap]
Good luck coming up with that $5,000 in-network Obamacare deductible, and the even more likely $10,000 out-of-network deductible.
Insurance companies love Obamacare, because we are now required to pay them the premium payments (income), and they know there is no way in hell these people are ever going to get past these annual deductible amounts to where the insurance companies then actually have to pay out benefits (expense).
From my article...
Just as cereal manufacturers decrease their costs by putting
less cereal in the same box but still charge you the same price, health
insurers have raised the deductible amounts and co-insurance amounts,
but not lowered premiums.
Coinsurance:
A cost-sharing requirement of some insurance plans where the patient
assumes a percentage of the costs for covered services after the amount
of the deductible has been met. Coinsurance is described as a ratio,
for example 30/70, meaning the patient is responsible for paying 30% and
the insurance will pay 70% of the allowable.
Deductible:
The amount paid by the member before insurance will begin to reimburse
services. It is reset annually, and based on the level of benefits or
amount of premium paid. For example, with a $1,000 deductible the
patient must pay medical providers for the first $1,000 of allowable
expenses incurred by the patient each year, after which costs may be
split according to a coinsurance arrangement, and/or may be limited to
the patient’s out of pocket expenses.
Premium: The monthly amount enrollees pay the insurance company to be covered.
What is your premium, deductible, and coinsurance? What were they 6
years ago? Many, if not most, of the Obamacare plans actually in use
today are $5,000 in-network deductibles, $10,000 out-of-network
deductibles, and 30% coinsurnace. Few specialists signed up for the
Obamacare plans because of the low fees, so people are likely to have to
pay both the $5,000 in-network deductibles, and $10,000 out-of-network deductibles every year before the insurance will begin to reimburse services.
In summary, 1) you are paying more before the insurance company begins to reimburse services, and 2) you are paying a higher percentage of the costs after
the insurance company begins to reimburse services, and 3) you are
required by law to purchase health insurance...therefore United
Healthcare stock has increased
From another article of mine...
It's not so much that the people are so stupid. They are as smart or as dumb as they ever were. The problem is that they are receiving false economic signals thanks to the Fed's manipulation of interest rates. Low interest rates in a real world scenario means there are a lot of savings (0% interest implies INFINITE savings and thus infinite capital). The market naturally reacts to the low price of savings by saving less and consuming more. The problem comes when we hollow out our capital base because all of the capital is going towards consumption and production that can't survive at higher interest rates (ie oil production).
Only those who have and take the time to understand how the system works and how it should work in theory will buck those economic signals and save, and they are absolutely IMPOVERISHED by government efforts to destroy those savings. But they (we) must hold out as well as we can until the hollowed out system finally collapses so we can have something with which to pick up the pieces.
Those who bear responsibility for this perverse situation will get their just desserts.
Most of America is too stupid to even know how to read a road map much less macroeconomic data. Hey, the drooling majority still tunes on the alphabet news station every evening to receive their propaganda, errrr news. They don't seek other sources nor look out their own window for verification.
The unprepared masses are a danger to everyone/everything, and may require a room stacked to the ceiling with ammo cans when this thing hits liftoff.
Low interest rates allowed people to purchase more asset value at any given price range. Now everybody is mortgaged up a level and locked in place, and hostage to the property tax racket. More captives to help feed the farm, at higher valued assets, and ever increasing ad valorem rates.
Stupidity is rampant across America. If we have that high of a percentage of family/person/household with an education and income over 75K that can't cover a 500 dollar expense, we have that percentage of "educated" people that are complete and utter idiots. PERIOD. Gotta have the phone with the data plan, the shiny car, the 100 dollar shirts and on and on. That is our "educated" portion of society... you know those brainwashed to buy because it is time for santa and the rugrats.
People have no savings because they know they can put it on a credit card.
The new tires, the water heater or the home repair -- just tack on 19% interest (which I close my eyes and don't notice). They are not really sunk unless there is a job loss, and even then there's 6 months of unemployment.
Let's pretend our 75K income couple are self employed and own a modest home.
75K - 25K/yr total income taxes = 50K gross income (yes, self employed pays that much)
50K - 12K helath insurance = 38K - 18K rent/mortgage = 20K
20K - car, food, prop tax, gas, home inusrance, repairs, maintentance, utils, HOA, etc.. = 0
So there you have it. It takes 75K for two people just to survive. The fact most of them are $500 away from catastrophy speaks more of the system than it does their frugality.
18K rent/mortgage? Where do you live? Then again my wife and I live in a 1 br apartment.
I do agree with the analysis, though. It seems $80k is the minimum if you want to have kids and pay for what you would traditionally expect to give them (soccer practice, etc.). And for most Americans it's only possible if both spouses are working. We all know how great that is for children.
Bull fucking shit.
He double counted rent/mortgage and RE tax/insurnace. Then he waves his hands and says it costs 20k for food/gas and other incidentals.
I lived my WHOLE LIFE in an expensive coastal city and spent less than 2k per month, living comfortably. If you think you cannot do that then you are the retarded fool this article calls out. Based on the stats, that fool is MOST OF YOU.
While I live on 2k per month, most of the folks I know are broke making 100k or even 200k for a husband and wife.
Not so sure -- that is the whole story.
No matter what the fed or the government or the rich .001%ers or the mega corporations or who ever you pick is doing or not doing.
How fucking hard is it to figure out that you really need to have a few thousand dollars stashed away for an emergency?
You don't need to understand how any system works to be able to see that once in a while your car may break down or your kid may need to go to the doctor.
I had more than $500 in savings when I was 11 years old - because I worked all fucking summer long and every day after school on a farm - making $1.35 an hour.
Now I am not claiming to be some genious - but even as an 11 year old I was able to figure out that it would be better to have a few $$ in a savings account - than it would be to eat bags full of candy every day.
America's quality of life is going down and all you can do is look upon yourself for the answers. You are missing the macroeconomic changes that have occured since your generation came on board.
I find the article poorly written, it is short on analysis and long on attitude.
Was the last paragraph a comment by Jim Quinn?
Cause it's kinda like blaming the victim for getting raped. I see more and more cases of authors and commenters blaming people for being broke, it actually takes a huge amount of effort to make this many people so poor.
It has been a slow burn on people's savings, the MSM has been harping that we are in a miraculous recovery for years and the govt lies constantly about the direction of the economy.
People have been trying to hold on, buckle down and wait out the rough patch. Problem is, the talking heads were right, that WAS our recovery, now we are headed back into another recession. People keep expecting things to go 'back to normal', I try to tell everyone I can that it won't....ever. Most do not believe me or do not understand the economy well enough to believe me but tmosley is right, they are no dumber than they used to be but their pay has been frozen for 7 years and their bills and rent keep going up so they are reaching the point of being tapped out. To not even have $500 for an emergency would be scary.
I'm not near as mad at the poor as him, I think they have been robbed.
Insurance companies love Obamacare, because we are now required to pay them the premium payments (income), and they know there is no way in hell these people are ever going to get past these annual deductible amounts to where the insurance companies then actually have to pay out benefits (expense).
That is true for a normal person...but the gay guy that has aids from years of getting screwed by thousands every year unprotected...can get it for free..and use up all those premiums in one year....and the government says you have to insure this idiot from a disease that is totally avoidable....
Don't forget the millions of morbidly-obese diabetics. They liklely cost us more than the skinny gays with AIDS.
My wife has had to work with a lot of both. Either way a hospital visit is $10k a night.
But you're right, the toxic eating environment is a known problem to dietitians and we could quite literally save many billions (or hundreds to thousands per family) if the government stopped subsidizing the ag industry, and local governments stopped getting in the way of walkable communities with their awful zoning/city planning.
But I have my powerball ticket!
Research seems to be suggesting that the epidemic of which you speak is caused by metabolic disorder, cause unknown. Xenoestrogens, Endacrine disrupting chemicals, GMOs, lack of exercise, HFCS and processed foods are the most popular culprits being examined, or a combination of them.
It may indeed turn out to be a matter of epidemiology, not gluttony. A regimen of healthy diet, exercise and education is still your best weapon against it. If they can hold off Kraft and Montsanto long enough, maybe they can crack the code, cause something has changed, it's not just people eating more.
If you want to eat healthy and maintain a healthy weight, you need to stay away from probably 90% of what you'll find in your average grocery store. There are entire aisles you should steer clear of full of carb-dense garbage (e.g., breads, pastas, cereals, meals-in-a-box/can, pastries, snacks, desserts, sugary drinks). That goes for most of the crap being served up in jumbo-sized portions in restaurants as well. Someone is eating all those carbs (i.e., fatties). If people limited themselves to the fresh produce sections of their grocery stores, then the obesity and related health problems would vanish.
"Insurance companies love Obamacare, because we are now required to pay them the premium payments (income), and they know there is no way in hell these people are ever going to get past these annual deductible amounts to where the insurance companies then actually have to pay out benefits (expense)."
This is not entirely correct. The Working stiffs have high premiums and high deductibles, but if your have no job and no money, Obamacare provides free coverage without a deductble. This is why insurance providers keep on jacking up the premiums, To pay for the FSA healthcare.
I don't believe that is true.
Obamacare provides tax credits, and I haven't seen any plans without a deductible.
Medicaid does provide free coverage without a deductible.
Medicare has a $166 deductible and a 20% co-insurance.
I would be interested in seeing details regarding any Obamacare plans that do not have a deductible and are free, if they exist.
I can speak to this. I'm gonna get flamed here because yes, my daughters and I get state-funded health care. There's nothing else for it; I'm a single dad with two young daughters and there's no way I can afford a family plan (i know lots of working couples where one person's income goes almost entirely to pay for healthcare). If my kids are going to have healthcare it has to be state-funded.
Anyway, I don't pay jack shit. Everything including dental and a pair of glasses per year is free. And since Obamacare passed it's almost impossible to kick us off; even if I failed to turn in my 6-month renewal forms they could wipe out food stamps or whatever else but not the health benefits.
What you have sounds like a Medicaid plan, not Obamacare.
I would like to know a few things for my research.
Thanks for hanging it out here.
Consider this a bit:
I know of a couple with no children that get 800/mo for food stamps
I know of a family of 4 that gets EITC refund from IRS of 7500+ dollars each year (7500/12= $625/month) salary under 29K a year for this.
MY health insurance costs me 900+ a month +copay +deductible but just use the 900 for now
They also get: free phones, heating assistance, rent assistance, car allowance, electricity assistance in amounts i don't know..
SO WE HAVE
800+625+900 +Salary of 29K a year or 2416.66(taxes paid are refunded with credits so no reduction on that end)
4741.66 a month excluding the unknowns listed above... or 56,000 a year income. If a family of four makes 56K in salary they pay full taxes, they also pay SS, and the EITC is gone. so reduce that by the simplest of 15% tax of 8400 (Federal level only consider state city and local taxes as a freebie for this exercise) and they make only 47,600. They also pay full price for insurance because subsity is gone at all levels at 49K income so subtract from that 10800 for year of health insurance and you get 36,800 dollars. plus your food is out of pocket but varies widely based on diet so we will go with 300 a month (less than half of what foodstamps pay a 2 person family i know personally) or 3600 a year and that brings the total to 33200 dollars. The deductible health insurance mentioned by HH is 5K and or 10K so you are then at 28,200 dollars or below the official poverty line but your W-2 ensures you pay the full brunt of this because you have a good paying job, whatever the hell that is or is worth these days...
And we cry about fairness and paying a fair share? If you aren't cursing now, you need to dig into the unknown subsidies i didn't touch because they are worth at least another 10,000 possibly double that.
I don't know where you are at, but I have two kids and don't get anything like *00 in EBT. It's about $450. I do get heating assistance, but I do not get cash or any kind of housing assistance (I have a mortgage). Free phones? I never even fucking HEARD of that.
I have a job and don't buy all those things.
No cigs, no cable.
But what does that have to do with health insurance? Beer and cig money aint gonna pay the obama care deductable anyway, not by a long shot.
This is already on page 2 so you probably won't see this response but:
no
no
no
no
no
yes
On behalf of all tax payers, you're welcome.
Why do you assume other ZHers are going to flame you?
Everyone here is doing what they HAVE to do to live, drive and survive.
http://obamacarefacts.com/federal-poverty-level/
Perhaps it not completely free. but its likely close to it for those below the FPL. There a "Deductible Waiver" in ACA for those in poverty. I recall reading a post from a healthcare worker that Poor People that seek treatment basically pay nothing, which is subsidize by the working class paying for insurance.
Google search about rising cost for subsidies. I can't find the original article I read during the fall about why premiums were rising, but it was to cover the rising costs of the subsidies.
https://www.healthinsurance.org/minnesota-state-health-insurance-exchange/
"Many more people are qualifying for subsidies in Minnesota for 2016 because of the significant rate increases throughout the state, and MNsure wants to ensure that as many of them as possible are able to take advantage of the opportunity to reduce the amount they have to pay in premiums."
"Only about 55 percent of people who have 2015 coverage through MNsure are receiving premium subsidies. But due to the sharp premium increases, that has increased to about 70 percent for the people who have purchased or renewed coverage for 2016."
http://money.cnn.com/2015/11/19/news/economy/unitedhealth-obamacare/
" UnitedHealthcare has pulled back on its marketing efforts for individual exchange products in 2016"
Obviously ACA isn't a cash cow for them if they are planning to exit the individual market, which probably means People in Poverty are able to get near free healthcare.
IIRC, if you are below 115% of the FPL you are on Medicaid at that point. This is ultimately paid by the states, so it "doesn't cost anything" because the costs have been shifted around.
But only for states that signed up to join this.
The feds gave states big incentives to go along. Basically they cover the Medicaid for the first few years. Some states did not bite because they
A) Republican governors or state legislatures opposed it on political grounds.
B) They do not trust the Feds and expect to be stuck with most or all of the cost for those Medicaid subscribers.
I am not aware of any democrat run states that did not join. This was also a political decision. They are very likely to regret it down the road.
Needed Obamacare, minimum wage increase, war and low rates to try desperately to stay out of the deflation cycle...this is the reason for all of this..
Hmmm, my wife's UHC silver plan has $1000 deductible and $1000 out of pocket. $70,000 hysterectomy cost me about $3000. Obamacare $650 subsidy paid all but $2.70 a month for it.
Before you call me a scum sucking leach I worked 40 years before succumbing to overwork. I drive an 18 year old truck, my wife a 16 year old car. We live in a 35 year old double wide. She is finishing her nursing degree and this year will become a tax paying citizen and no more subsidized health care, unless you think Medicare for me is subsidized but oh well.
"If you can't afford it, fckn finance it."
- Fast Times at Ridgemont High (when the dude goes in to buy a stereo)
I've seen some reports that millenials today think that the amount of available credit on their credit card is "savings". I think the above stats are probably worse than the numbers reveal, because people are always more optimistic when it comes to personal finances and how badly they are enslaved by borrowing. The system is designed to borrow and finance and we have a whole generation that knows nothing but what their payments are per month. Buying an asset 100% outright (as opposed to a consumable like food) is gone.
Remember, your credit rating is not a rating of how good you are at paying banks back, it is a slavery index by the banks to rate how good a customer you are. The rating, from their perspective, is the inverse of what it reads. If your rating is low, they value you. If your rating is high, they really don't want you.
The system is wholly corrupt.
""If you can't afford it, fckn finance it." - Fast Times at Ridgemont High (when the dude goes in to buy a stereo)"
Wrong Movie, it was "ruthless people", staring Judge Reinhold as the stereo salesman.
lol... yup, was a long time ago.
Slavery Index - brilliant!
Yes; I heard people not carrying cc debt are called Deadbeats in the industry.
Freeloaders not deadbeats.
I like that I walk into discount clothing retailer Marshalls and right at the front where it used to be "returns", now that desk has been converted to "layaways" ...are you kidding me !!! Layaways for offprice, cast off fashion clothing...yeah the US is absolutely on the path to prosperity.
Last few times I bought a car, the salesman would not quit talking about monthly payment instead of purchase price.
I finally started bringing a letter of credit from the credit union so they will stop talking in terms of monthly payment and start talking how many $$$ to buy this damned car.
Gassed up the truck last night and the cashier was taken back (I mean gapped mouth shocked) that I didn't want to purchase a Power Ball ticket, said I was the first she encountered that night, so yea, Americans all think they are going to retire on a wing and a 1 in 900,000,00 chance on a one dollar stupidity tax and even if they did win they would be dead in three years from some excessive behavior, " poor Melba, she died from eating 9 boxes of liquor filled Bon bons watching reruns of Murder She Wrote on a 120" flat screen"
thats how I wanna go out too
Powerball is $2
The odds of having the winning Powerball ticket - assuming you buy one are 1 in 292.2 million
its $2
and 228,000,000 to one odds of hitting the jackpot.
I'll bet $2 on that.
Might run for President if I win.
Pfft....Losers...I could easily handle a $600 emergency
You da man!