56% of Americans can't afford a $1,000 emergency expense: We are 'living in a paycheck-to-paycheck nation,' money expert says
56% of Americans can't afford a $1,000 emergency expense: We are 'living in a paycheck-to-paycheck nation,' money expert says
The current economic environment is ideal for shopping around for high-yield savings products and building your emergency savings.
We've been a paycheck to paycheck nation for like as long as I can remember
honestly even pretty comfortable people would get wiped out by a 5-10k expense in many cases, if it weren't for the ability to go into debt or borrow against their home equity. If you don't have great credit or were already using quite a bit of credit just to get by, and you don't own any big assets like a house, you're pretty screwed.
And then the same people who will say how irresponsible these people are for not saving money they don't even have, will call you a fool if you don't invest your savings (risking taking big losses if you have to pull it out in a hurry). If you press them on it maybe they'll say you should have a buffer of 6 months of expenses saved before you start investing savings but for most people that's gonna take ages to accrue if they can even save at all, and could be wiped out by an unexpected expense in the blink of an eye. you can't just take $10-20/hr money and turn it into the savings of someone making $70-80k/yr. There isn't enough there to start accruing much gains in stonks let alone interest, and they need the liquidity in case of emergency (not if but when)
A smarter, well maintained society would see this as a problem
the system is well maintained, it's just that its purpose is as an engine of wealth transfer from the poor to the rich
people with savings are harder to debt-trap and steal from
Even this statistic has it's numbers massaged by choosing such a low dollar amount. I mean sure whatever, 1000 bucks ain't nothing but that isn't what I'm saying.
I bet if you put it to say, 10k instead (which isn't even a large hospital expenditure in the US), that percentage would be ~99%.
These damn articles can't even speak truth without stuffing the reader with gaslighting ass lines like this gem.
It’s quite remarkable in the current environment that even with low unemployment and a job market that has been both robust and resilient in recent years, that we still have this remarkably low percentage of Americans who could pay this emergency expense,” he adds.
Hey, fuck you Hamrick!
Explaining to a financial advice columnist that just because there are many jobs, that does not mean any of them pay well
Fake ass job haver telling the rest of us about how good the jobs are. Fucking nepo baby shitheads.
10k would make for a pretty nice six month emergency fund which falls around the standard advice given by financial advisors.
We had a money expert explain this about 160 years ago
Well of course, I remember seeing an economist article quite recently asserting that the people of China's massive savings were a sign their economy was about to collapse. Good old American economists are just making sure America's economy stays secure!
from another article:
You’d expect savings account balances to grow by generation — but that’s not always the case. According to our survey, only 43% of savers aged 18-24 report having $500 or less in savings, while a whopping 51% of savers aged 55-64 report the same.
And for those reporting a very low saving account balance, the 35-44 age group have the highest percentage, with 41% reporting a balance of $100 or less.
a lot of these articles seem to fall into this genre of "the way to save more money is to save more money!" and as helpful as HYSA are to that end, there is limited discussion of how to be able to contribute some/more into savings and never any discussion of wages, which would be an obvious factor when food, shelter and healthcare costs are taking bigger bites.
"If you're sick of being poor, simply acquire more money."
Also, most HYSA require a significant upfront investment ($1k+ all invested at once) in order to open an account in the first place. And as nice as 5% interest is, getting $10/year from it is pretty fucking irrelevant; it's only useful if you have a cool $10k+ to dump into it and forget.
5% of $1k is $50/year. and, generally speaking $1k in emergency savings is only the first tier savings goal. the next priority is to save 3-6 months of expenses depending on perceived job stability, which is where interest income starts to offset the cost of some cheaper utilities or a mid tier subscription add-on.
it's not really meant to provide some passive income so much as as it is an incentive to parking the savings somewhere. because the current interest rates on brick and mortar savings are butt cheeks. like 0.1% type crap.
According to LinkedIn (yeah, yeah, I know) prior to 2023 the avg time between jobs was around six months - as of this year that has increased to nine.
lmao
Do you have almost a full year of expenses and potential emergency funds saved in case the pencil pushers at your job decide to get cute?? At over a year into my job hunt after expecting this and being extremely fortunate enough to have done exactly that and still be massively struggling I can confidently say this is unsustainable. It is so far beyond the pale that I have to think that the owning class knows shit will go extremely haywire in the next decade- I'd say closer to five years, personally- that they're just abandoning any pretense and getting their final sadistic urges out of the way before they intend to retreat into their bunkers forever.
Exactly, this is a really volatile situation where most people have no ability to absorb any sort of economic shock. On top of it, most people are deeply in debt and if they lose their source of income they immediately become insolvent.
lol what? That obviously includes people who only go for pmc email job/ zoom call professional shit.
You can get a retail job within a week or two
And for those with savings they are likely unable to refill them once they are drained
Wages stay the same and everything else goes up, what a beautiful system
blowing your emergency savings because grapes are $10 a bunch now
perhaps its rated by age? do Americans below the legal age of employment get counted too? how about old people who are retired?
my folks (boomers) have been out of the job market for a decade or so - they dont have jobs, they live on their investments/savings/social security.
when I was younger I had difficulty saving - had drugs to buy, beer to drink, and women to impress (and bills lol). as I've grown older I've found it's easier to save - and I'm making more money so there's more of it to actually save as well. perhaps I'm just an outlier?
The last ~$10 an hour of wage increases have basically washed off my back. Meaning i feel like I'm in the same position or worse compared to when i made less. Food and housing especially have felt unmanageable for years where I live.
I can see middle age on the horizon and I'm still very paycheque to paycheque
have your costs gone up as well - like, not just inflation stuff, but do you buy more things or do you live frugally?
I personally try to live as frugally as possible. I dont need a giant house or a mortgage, and I dont really want to be tied to either. been trying to downsize the last few years - maybe move into a van or something I dunno. that seems to be the popular thing to do.
Yes you’re an outlier you have no idea how the average American lives. I’ve never known anyone to just have $1000 on hand to settle an emergency.
Single income earners that are reasonably young (under theirs 40s) without kids or dependents usually have, to them at least, quite a sizable amount of spendable income compared to those with a variety of bills/dependents (kids, homes/rent, healthcare for said kids and themselves, god forbid they also have pets or student debt as well or existing medical debt).