"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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meth-fueled hamsters...
Thanks, I needed a good laugh today!
I might have to look into the meth-fueled hamster thingy.
Until the details get ironed out, however, I tore the roof off my barn and rebuilt it from an east-west configuration to a north-south one with a very steep pitch so I could hang solar panels on it. Not deliberately, but in the course of life, I picked up four different generators for backup power and have 600 gallons of gas in the fuel depot.
As an ex-fence contractor, I have vast semi-trailer loads of nice dry cedar lumber lying all over the place that I charged people to haul away. Plus I added a wood stove to burn it in.
Colorado is particularly blessed with both very high wind speeds and very high insolation rates, so I did solar first and am looking at wind generators for Phase II. If things go to shit, there's a huge wind farm about ten miles away from here. I can knock down one fo those bad behemoths and start my own post-apocalyptic welding shop/disco.
One thing I haven't gotten around to is laying in a big-ass pile of coal. That shit will burn all night with no need to stoke up the fire.
If I had any neighbors, I'm sure they'd hate me.
Winner, winner, chicken dinner!
I agree most of the time with your comments.
To survive a major crisis, you need 6 months of living expenses in cash (half in $20 bills) and/or things which you can easily trade/barter (diesel fuel, gasoline, ready-to-eat meals, tools, guns, ammo, PMs, etc.)
Ask yourself this: Can I make it, if all credit cards and bank accounts do not function for two weeks - pay check or direct deposit check - can not be liquidated/accessed.
If you have your own energy, you can re-charge someone's phone for two cigarettes. But, why would anyone bother if cell towers and the internet don't work.
If you still have a landline, buy a 40 years old dial up phone from Goodwill - they work when you have no electricity.
New landline phones do the same thing.
I don't know how you got even one downvote. This is possibly the greatest lesson to be learned from all the research I have ever done about finance, and it is the reason CBs still hold gold.
In the end, you must physically own something of value - even entire nations know this, and so they hold gold. The lie that it is a 'barbaric relic' is actually comical. Anyone who says otherwise, please take a trip to the NY Federal Reserve building or Fort Knox and pick me up 10,000 toz. of solid gold please. See how they react to your request for their 'barbaric relic' and then resume your argument.
But that would put Starbucks under. That would require another bailout. That would require Govt to steal the $$ from people for said bailout.
May as well drink their coffee...
252 work/trading days a year. People are too drunk to get out of bed for Starbucks on the other days...speaking of another way to save money...
You work 50 weeks a year five days a week. 250 X $3 = $750. Am I right?
Obama's Mission Accomplished although he is merely the last in line of engineering the destruction of the Middle Class
this is a decades and decades long agenda that began with the dumbing down of the citizenry rendering them incapable of balancing a simple fucking check book
2+2 = 4 used to work
now its heather has 1 mommmy, plus another mommy and if you answered thats 3 mommies its okay. you get an A for trying hard
No, they get the A for providing an answer that is closer to the actual one than their previous guess of 7.
The sad part is that these are the good times. And unless we can get the global leadership to change direction away from the current plans its all down hill from here.
Yet they all have apple 'i'phones, 2 tv's, a computer, laptop, tablet, 50 different 'ring tones', $150 monthly cable bill, brand new car, full list of 'i'tunes, and spend $20 a week on lottery tickets. Diapers until the kids turn 5 yrs old. You know, the 'necessary' things.
and 4 maxed out credit cards
Who keeps a kid in diapers until they're 5? Parents who don't parent and take the time to properly train the kid? Mine was out at 2. I can't imagine having to change diapers for a larger kid.
I don't understand the picture. Why is she looking at receipts? I'm pretty sure the credit card statement lists every single thing you bought that month. At least mine does.
Stock photo. Sometimes even the Tylers use them. Get over it.
After the Bail-Ins no Americans will have savings.
So in the grand-scheme of things nothing matters might as well torch the money on the front lawn its game-set-matches.
http://media.giphy.com/media/5L72mlFbzBy4o/giphy.gif
That being the case then the US is ripe for islamifornication.
if someone is taught from K-12 by a person that does not need to save then perhaps they learn through osmosis. Public employees are lined up to receive insane benefits that only these others would dream of....why save a nickel of todays paycheck if you're one of them?
+100
i often have wondered over the years why we allow children to graduate high school without a basic requirement for micro economics
The Richest Man in Babylon ought to be required reading for every Senior before graduation
Wait.
Starbucks sells $3 coffee?
I don't know about that.
I only spend $7 a day there.
So I am saving $4 every day!
Take that, krugman!
There is a top-tier position waiting for you at the FED.
No delayed gratification for me either...PMs today!!!
Maybe if you save your children lose any financial aid eligibility if they want to go to college.
Maybe if you save and lose your job you can forestall the foreclosure until you've exhausted your savings. But then you have no savings and no home.
I like the Bank of Sealy to cover emergencies
But we're Muricans and are entitled to our daily $6 cup of Starbucks and shiny fancy things!!!
The average Chinese would be terror-stricken not to have AT LEAST a FULL YEAR put away.
Their standard is saving 50% + of their net.
Ask one or two if you think this yanqui is exaggerating.
I shop at an odd store in Concord CA named "HEROIC" which is next to the Tarbucks that I frequent. Rock-bottom liquidation, come one come all they will sell it. Run and apparently owned by whites - quite possible Mormons as they are far and away the best-organized large white community of which I am aware and there are a lot of them out here.
I can afford Needless Markup or Nordstrom but the quality has fallen off so drastically in the last 15 years, due to the machinations of a certain very large country in east asia - that I no longer bother. Flimsy shit. My standards are simple; classic cut, 100% natural materials, little or no dye. I have to buy XXL everything because otherwise the fucking sleeves will be halfway up my forearm after the 1st washing - sound familiar gents.
HEROIC fills the bill often, so they get my business. There are many such options. I spend the bigger bucks on food, not socks. A $15 or $150 white dress shirt is undifferentiated on the street. Prepare as you are bid to.
Mormons as they are far and away the best-organized large white community of which I am aware and there are a lot of them out here.
heck ya and there is a reason for that
its a fundamental part of their education. in order to be best prepared to help others, you must first be prepared enough to take care of yourself
good stuff
While I agree with some of their ideas, on the whole I think Mormons are a snarky, weaslly, not to be trusted bunch.
Ouch! I assure you that not all of us are. In fact, I would say the majority of us who actively practice our faith are not. Sorry if you met some rascals that gave you the wrong impression.
Not Mormon, but I have known quite a few, and religion aside, found them to be community oriented (volunteer fire department types) and generally upstanding folks.
HOWEVER -you people should have been filing anti-defamation suits against the MSM left and right during Romney's limpwristed set-up-to-fail campaign (the man was vile and unelectable, but still -imagine if he'd been one of the Bagel Mafia and people like Joy Behar had started attacking That religion or Their 'magic underwear' etc. etc. the thunderous avalanche of lawsuits would have shut down the whole CNN, MSNBC, CBS, ABC clownshow in under five minutes.)
Yes. Men's clothing in the US is made for fat guys. I have an athletic frame and have to buy XL, to get shoulders and chest large enough (44" chest). The waist at this size is ginormous; I have to take every shirt to my tailor, to have darts added. Even "extra slim-fit" shirts are too big.
I keep my savings in Gold....Bitches
+100
Gold, Silver, Guns, Ammo, a farm with livestock, and plenty of marketable skills here
Yup I'm pretty self sufficient myself, I need nothing from no one...best part is my girls share the same skill set. My oldest ( 22 ) can shoot the wings of a gnat....
My oldest ( 22 ) can shoot the wings of a gnat....
I hear they're tasty.
But saving is not good for the economy. Why do you think a car cost 60k now and a small house 500k? Nobody can save when your whole paycheck goes into a house and car.
And dont forget ObamaCare. If I was paying for that I would have to pay $918 a month with a 12,000 deducable.
So lets do a little arithmetic here.
!500 a month for house
$500 for car
130 insurance
150 electric
200 heat
400 food
150 auto gas
100 misc.
60 water & Sewer
Thats only $3200 = 800 a week take home. Anybody can do that! Right?
Oooooo! ObamaCare + $918 = $4118 a month = $1030 a week take home. No problem! Right?
Did I miss anything? Oh yeah, savings.
So what happens when you need 12 grand for surgery and don't have it? Payment plan on top of the premium? Another payment plan to the Psychiatrist after you go insane? A payment plan to the City after a ticket for not affording your tag renewal? The Bail Bondsman? The Attorney? The undertaker?
The solution is the pre-planned one the government has for you. It's called more debt.
huh?
"Savings" accounts? The misguided author must be referring to "confiscation accounts".
Those with credit cards use credit (and/or insurance) to handle "emergencies".
Many others (and many others with no job) are living paycheck(?) to paycheck(?)
because they don't actually have a lot of discretionary funds to "invest" in "savings".
Bet ya there's a top of line ford f150 in the driveway & each tard has 3 iphones & watches with a 70" tv in the basement living room & bedroom!
My doc ordered a basic blood panel, the bill came out upwards of $1,000.
yeah,..... but you saved $2500 & keeo your doc right? sarc
And let me guess: in retrospect there was no point in ordering it?
My daughter brought my granddaughter in for an ear infection ( cutting teeth ) and they gave her amoxicillin ( which I am against but thats my problem, I am for natural treatments if I can help it ) anyway the pharmacy said they didn't have my daughters insurance info ( which was bull shit ) and the medicine was $86 dollars for amoxicillin!!! of course the dope behind the counter spelled her name wrong so it was all set...my point is amoxicillin$86 bucks really?
We went through the amoxicillin cycle about 3 times with my daughter before we figured out the pattern--it interrupts the immune response and causes a recurrence of the infection a few weeks later. I found a WSJ article citing exactly that iatrogenic aspect of amoxicillin--the perfect drug . . . for big pharma. My wife pulled out an old german book of folk/herbal remedies and spent one night sitting up with her with an eyedropper and warm garlic infused olive (I think) oil. My daughter never got another ear infection. Two co-workers with similar aged kids both continued with the amoxy cycle until their kids ended up with tubes: a win-win for pharma and the docs! Pills and procedures are what rings the register.
Before we tried this we assessed the risk and judged it minimal for a well-nourished kid with a robust immune system.
Every person on this board knows someone that doesn't have a pot to piss in but they always are the first to upgrade their phones. I still have the iphone 4 and I have money in the bank. Americans are morons when it comes to money. Our schools are to busy teaching kids about art instead of money. The more people that rely on the Gov't the more power the Gov't has!
I went to an Apple Store, about 5 years ago, to purchase a MacBook Air ($1,000). I wanted to pay in cash. They almost did not accept the money; the guy actually scolded me for carrying so much cash around, saying it is dangerous. If I can't pay in cash or stroke a check for it, I don't buy it.
Apple took my cash, anyway.