"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.
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It's rare, but if the mother dies sometimes the father's set starts producing milk if he's worried enough about his kiddo. Which makes me wonder if your neck gets a strain after every lunch hour?
Okay, I can get your arm is my arm etc but that milk line, scrotum labia thing sounds ....well.....unnatural.
Damn Jess, you are droppin some serious knowledge in here today!
Caitlan, is that you?
You could have used a sarc tag. There's 15 minutes of my llife I'm not getting back, looking for a cheap thrill.
Seems we are part girl or visa versa. That messes with my love thinkin.
There's only one chromosome of difference. Everyone has both male and female hormones in their bodies.
Gyno Baby...!!!
The American male is not the one who needs the Thighmaster.
I wonder how significantly the data is skewed by people whose savings are at the bottom of a lake instead of a bank.
+1.
I temporarily put $6000 in IRA funds in a money market for one month – December 2015. My return was 8 cents.
This is good news for the economy. That means Americans are spending as fast (or faster!) as they earn, and since spending is the basis of all economic growth, this means the economy is running more smoothly than ever before!
fuck you
thank you
The correct way to get money is the way Anna Nicole Smith did it
https://www.youtube.com/watch?v=uagDLbn4t6Y
$1,000 emergency room visit....
For....? A cut finger?
Maybe 30 years ago....but today?
That just gets you in the door.
PLENTY of stories about people going in for minor emergencies only to emerge with 20k and up bills. The largest I actually saw (for again, something non-life threatening) was 37k.
Correct!
I know a fellow that cut his finger deeply. Went to the E.R.
Seven stitches and big bandaid. Cost....$2400.00
I had to go to the ER for a cut finger a few months back...$1,050.
How do you think they pay for all the ER admissions that have no insurance?
serious question: If a person in ambulanced to the ER room with a badly broken Tibia & Fibia, has a 5 day stay including a 6 hour surgery
and then needs physio for rehab plus follow up x rays to check healing .... what sort of money?
This happened to me 12 months ago (in the uk - cycling accident) did not cost me a penny, well looked after by our National Health service, who although much criticised are mostly very good for emergency / trauma cases.
Uk health insurance tends to not even cover emergency trauma - it is just for que jumping when you want a new hip etc, or nicer digs following something routine.
Hundreds of thousands; thanks entirely to Insurance relieving hospitals from the 'cruel' 'capitalist' need to compete with pricing and service, and to subsidize those who are 'entitled' to skip out on their bills.
Time to start looking for that back alley med school dropout guy who takes care of the gunshot gangstas who can't be going to the hospital for care. Cut finger - cheap bottle of whiskey or a big meth rock. Veterinarioan supply for the antibiotics and the guy you got the meth from for pain meds. Gotta think outside the boix in this new obamacare world.
$20 for a tube of superglue, a roll of tape, generic Aleve and some gauze.
Wall Street fraud and theft meets Main Street in the ER
So how will this 63% of Americans to pay their $6K Obamacare deductable?
Wasn't Obamacare supposed to eliminate the personal BK's due to skyrocketing medical bills.
The unintened consequences of Obamacare = skyrocking personal BK's.
I accompanied a friend to a San Jose ER about 6 years ago; he was feeling dizzy. We were taken to a small room where we waited for about 3 hours. Finally, an MD came in, did a few minor tests; said he found nothing wrong. The bill: $7000.
Took an AA sponsee to the e-room. He popped a 0.45 bac and was admitted to the ICU. 2 days, bill is $14k. Dude is still drinking and will never pay a dime. TX is not big on treatment programs for substance abusers, just jail 'em.
Savings? You mean the $12 twice a week for 6 Powerball tickets could be savings at $.0015 return in a bank account? Daaaaang!
Wow. I need to switch to your bank with interest income like that! Mine just spits in my face while doing coke lines of a hooker's ass and charges it to my account.
What percentage of those that have no savings are paying $50 or $100 for their 'smart' phones - PER MONTH!? And how many are paying for cable and other online services for their home. Imagine if they took a good portion of that money, month after month, and year after year, and put it into savings?
Save money, pay off debt, by eliminating recurring costs. Learn how to build a future.
You have no concept of utility. My smartphone is a phone, email, web, instant message, laptop hotspot, financial management access, on and on. It is an amazing tool for business minded people, unemployed looking for a job, etc. But durrrr, twitter amiright?
Also fuck a savings account. The fed killed savings as a way to invest in the future. The bank of my mattress is superior in every way:
1) Just about the same interest income
2) I RETAIN OWNERSHIP
3) Not last in line to be paid when the bank goes under
I would suggest the actual utility of 'smart' phones, and the related 'constantly online culture' could be easily be achieved with a less online addiction and dependence culture.
Maybe you missed the point of the article. A large percentage of Americans have no savings to fall back on if (when) it all hits the fan. Is the online, connected culture required just the barely keep your head above water? No way.
Another assumption from the numbers mentioned in the article is if (when) it all hits the fan it will have to be the government to has to come to the aid of these non-savers. And the last time I checked the government was B-R-O-K-E.
What percentage of those who have no savings are paying for mandatory "insurance" that doesn't cover anything? Something like 1 in 5 dollars spent in this country gets sucked into Fascist "healthcare" gouging.
dont worry, Black Friday tomorrow :)
Melts up to 2000...
Markets are all fixed chief.
That's right, if I buy something I don't need for 50% off, I'm saving 50%! The system works.
From the looks of things, Friday has a chance of being Thursday.
It's not how much you make, but rather, how you manage what you make.
That said, $75,000 really is not that much considering Federal withholdings, mandated Ins. (at ass-rape rates) 7% State income tax, another 9% on what you spend at the store, home schooling any children, and stocking up on prep items.
Well, it *is* largely how much you make.
But your other points are valid.
All I do for 8 hours a day is review peoples financial footing. I have never seen such a lack of savings and disposable income in my 15 year career.
Whta exactly is a $500 emergency? Forgetting to go grocery shopping?
...a sale on another 1,000 rounds.
Running out of 12-year-old Scotch.
...you mean I can't have it now?
...whadaya mean 'save up' for it?...whas that?
I know a number of people who make ~ $25K and have huge cable and phone bills. it's like they know they are circling the drain but won't even try to save a nickle. they somehow think they are keeping up middle class appearances but are obviously going to rack and ruin.
For majority of the population, why bother save money, when there is no easy way to preserve the value...
you are thinking "money" incorrectly. fuck the paper notes
gold, silver, ammo, guns, or a mother fucking marketable skill are all small examples of other forms of "money" that could generate a quick $500 of paper legal tender
many many many ways to "invest" in items other than fiat currency
The ability to delay gratification is the main defining characteristic required for success in virtually any endeavour.
Work now for payoff later. It's a bigger determinant factor than IQ.
I have to admit that I have very little savings in any financial form and would probably use a credit card to deal with a $500 emergency.
But that is not because I'm an idiot (or so I hope) but because I am betting on all financial assets turning into dust in very short order.
Having a bank account that pays nothing and charges fees on top of paying nothing, or placing my savings into an obviously-rigged shell game is my own idea of what a day-to-day emergency is. I choose to deal with it by placing every penny I can get my hands on into useful capital goods. Paid-off real estate. Food production. Lots of stockpiled tools, gas, and consumables. independent energy production.
The lesson of the Great Depression is that one day you wake up with what you have in your pocket and start over. But I do love arrogant millionaire financial advisors who have nothing but contempt for the people struggling to stay alive under crushing regulatory and tax regimes. Yes, it's all their own selfish fault. They should make more money and hand it over to their oppressors for safekeeping. That is the true path to security and happiness.
how do you make your energy?