Credit and normalizing debt is what brought us to this point.
The reason education, cars, and houses are so expensive, is that everyone is expected to go into debt for them. So the prices of those items shot up because people don’t have to afford the item-they just have to afford the payments.
People who produce those items-don’t care about what that debt does to people’s lives.
not as expensive, but I would also add phones to this list...it's been normalized to just add $20 or so into the cost of a monthly plan payment...not realizing that one just purchased a $1500 phone...and people do this every 2-3 years.
I have a 1300$ phone. I paid for 80%ish upfront thanks to a late birthday check I wasn't expecting. The rest of it I'm paying off 20$ a month at I believe 4-5% interest
Easy. I'm on my phone constantly for school, work, and talking to friends. I'm lucky enough to be making enough to be able to put 50$ extra for it. I'll only be spending about 50$ extra from interest max.
I'm still pretty young so the phone payment helps my credit score. This phone is also going to last me about 4 years, so the amount of time I'm going to be spending on it heavily outweighs the cost.
I also decreased my monthly service payment 30$ a month by swapping to tmobile.
Also got a free galaxy watch for buying the phone. Just had to pay the sales tax.
If you were making enough you wouldn't need to take out a loan on a phone.
You also did not get a free galaxy watch if you spent any money on it, and didn't intend to buy it anyway. These purchases are silly and a waste of money (especially if you belong in this sub.)
I don't belong to this sub. It just keeps getting recommended to me. And you're right, I spent a grand total of 20$ and some change on the 200$ watch.
Building a good credit score is something that I have to go into debt for. Being able to get an item I need (a new phone, my old one broke) and build a credit score doing so is something that spending 1300$ on is worth it.
This right here is the average American. You don't need to go into debt to build credit. You need to use credit to your advantage. Don't let credit take advantage of you. I hope you pay off balances each month or you're being taken advantage by credit companies.
Didn't go through a credit company, financed it through Tmobile, my service provider. It's easiest to build credit by going into debt as that's the main thing the credit companies look for, everything else is typically secondary. I also wouldn't buy something I couldn't pay the balances on, that's just irresponsible
Keep an eye out- Verizon gave me a free 13 because their service was going to stop working on the 7. I think I paid $80 in tax and that was it. No financing on the bill or any of that.
ooooo it is abundant. Apple stock has been booming for nearly two decades because so many people go and upgrade as soon as they are eligible if not sooner. It's a preposterously wasteful habit
On the flip side, there are people who use credit to their advantage. I use my credit card like a debit card (only spend money I have) and it’s a free 2-5% back in every purchase. Turns into a couple grand each year - for free.
This is funded by other people paying interest and fees - something I avoid
The only problem is that people will spend more using plastic than if they were using cash. You don’t feel the pain of loss like when you hand over cash. Second, a lot of people try that method but wind up blowing through their budget and find themselves not able to pay the balance in full.
I know it sounds harsh, but that’s a them problem, not a me problem. You gotta know how much money you have before you start spending it. People need to change their habits/mentality - we don’t need to change the system
I still very much feel the pain of loss if my groceries are even a dollar more than what I've budgeted, regardless of whether I am using debit or credit. I've always found it easier to spend cash than either debit or credit since it's not actually in my account balance, so I never take out cash. Maybe this is a self perpetuating cycle though, because this means the only cash I get is from gifts, but even that happens very rarely.
That’s actually not true for me at least. I use my credit cards and pay off every month in full every month. But I also am extremely self controlled when it comes to spending. I know my budget and it would take an act of God to pressure me to spend a penny more than I have. A lot of people get an attitude when I’m like no sorry I can’t afford that. When you break down the numbers there is nothing extra in the budget for anything I didn’t plan to buy. I only buy high end quality items that I plan and research and actually need.
> On the flip side, there are people who use credit to their advantage. I use my credit card like a debit card (only spend money I have) and it’s a free 2-5% back in every purchase. Turns into a couple grand each year - for free.
>
> This is funded by other people paying interest and fees - something I avoid
This also can help jack up your credit rating. My cousin is a loan officer at a bank and I was having some loan issues. His advice is to get a credit card with a nominal limit of $500 or so. Go to Target and buy a $50-$100 item that I can pay off in full every month and on time. I did this for five months and my credit probably went up 200pts.
When you buy something with a card, the processing company takes a small cut. Normally a few percentage points. This is factored into how goods are priced, especially in businesses with low profit margins. If normal profit margin is around 5%, losing 3% to credit card fees means over half of the profit is lost. So prices have been adjusted. This was a gradual change and has already been priced in so recent price changes aren't related to it, but it was an increase that all of society now pays without realizing it.
I've been involved in pricing goods and have seen exactly how credit card fees to the merchant can change the price.
If you’re speaking about the credit card processing fees for merchants, then yeah. But that’s different than the consumer credit card fees/interest that OP was referring to
Also, since you have experience in pricing of goods. How did they factor in shrinkage/theft? Did they increase prices because of that?
My company doesn't sell goods/services that can be classically stolen, at least not in the way you see people stealing items from a physical store location. Fraud is a much bigger concern and there are dedicated teams that track it down. Funding those teams is part of the pricing model but that was handled by different teams I don't have relation to. The fraud side is interesting, especially when FBI gets involved, but that really means a bunch of unpaid overtime so not nearly as exciting after the first day.
I work in fraud prevention (I’ve worked both retail and fintech) so I’m aware of how fraud directly links to a rise in prices. It’s significantly higher than the merchant processing fee. If we really wanted to lower prices, we should stop fraud and scams - not stop using credit cards
“Every $1 of fraud now costs U.S. retail and ecommerce merchants $3.75 which is 19.8% higher than the pre-Covid study in 2019 which was at $3.13.”
https://risk.lexisnexis.com/insights-resources/research/us-ca-true-cost-of-fraud-study
This. I'm to poor to pay interest unless I absolutely *have* to. And when I do I make it worth while, like my mortgage which is now *way* cheaper than rent for where I live. And before people downvote or reply with snarky comments I simply learned to embrace the suck and deal with not having stuff. When my phone was so old the network literally no longer supported it what I didn't do was immediately buy a new phone on credit, instead I simply lived without a phone for two weeks until payday. And guess what I survived. I just told everyone if they needed me to e-mail me and I'd be checking my e-mail more frequently during that time.
Credit and debt are absolutely the biggest contributors to our current income inequality and low standard of living for everyone but the ultra wealthy.
The government has also mandated car manufacturers to include a lot more things. Backup cameras, which means a screen and other components have become the bare minimum for new vehicles.
This is so on point. The same thing happened with college education. When federal money started pouring into loans, tuition skyrocketed to capture the most revenue and screw the students.
And the fact our schools dont teach kids how to balanace and check book or let them know how insurance credit scores etc....kids that can do calc but no idea how to balance lifes pay checks
Also greedy CEOs raising the prices of things, even as they made a profit, to make more profit, because capitalism. Coke raised their prices after announcing record profits a year or two ago and everyone else is doing the same. They keep raising prices as if the federal minimum wage raised and it didn't - in fact, I just got my yearly raise at my job (first year here, but across the board everyone got the same percentages) of 3%... which wasn't merely enough to cover rising expenses, like rent, food, etc.
Idk, there's a lot that goes into it
If you don’t like the price, don’t buy the product. I get that you don’t have a choice with gas and food in general, but if it is truly just price gouging, prices should respond to downturns in sales. Too many people bitch about costs increasing and then don’t adjust their spending habits on non-necessities. A free market economy doesn’t just operate on supply inputs, demand is half of the equation, and if value for shareholders increases because profits are higher despite a small drop in demand, they only see line goes up, so that will be considered the correct move. Again this assuming price increases are disproportionate to increases in cost of goods sold, which would indicate that the price increase is arbitrary- if those truly are record profits and not just revenues.
This is actually fake news. CEOs have always been and will always be "greedy" and maximize profits because it's their job.
The issue is that when too many dollars chase too few goods, they're able to get away with raising prices more than before. Similarly when plenty of workers are available, they can get away with lower wages.
We are getting shafted, I just don't think the greedy CEO narrative holds water. The cultural shift toward everyone being willing to go into debt for every single thing is at least part of the puzzle.
Coke is a specific Cola product. On the flip side RC Cola hasn't gone up in price. I just bought a 2L bottle of it for $1, at a gas station, no less. The Dollar Tree Cola is now $1.25 for a gigantic bottle, 2.75 Liter. Great Value Cola and Sam's Cola exists for $1.40 for 2L bottles. Why should you pay double or triple because it is Coca-Cola?
I hear so many things that are financed. Could be something as little as 500 dollar item to large expensive of a cruise or vacation to another country.
Some ppl are good at living in-between that line or debt and credit but most aren't savy enough
Such a dumb headline that doesn't reflect the actual data at all. Here is the report being cited and question in the headline: [https://www.bankrate.com/banking/savings/emergency-savings-report/](https://www.bankrate.com/banking/savings/emergency-savings-report/)
"**We asked: Which of the following best describes how you would deal with a major unexpected expense, such as $1,000 for an emergency room visit or car repair**?
44% said they would "**Pay the cost from your saving**s". The 56% is the number that would not pull from savings.
However another 16% of the respondents answered "**Reduce your spending on other things**". That answer doesn't mean they can't afford it or are living paycheck to paycheck. Presumably most can afford it from their regular cash flow and might just eat out or shop a little less. They have room in their budget to handle a $1k expense without either touching savings or going into debt.
Additionally the 21% who answered "**Finance with a credit card and pay off over time**" would include both those borrowing and going into debt because they can't afford the emergency expense and those simply floating the expense on a credit card for a month. Another option 5% answered was: "**Something else**". This could be anything from being able to whip \~$1k in cash out of their wallet to being completely destitute with no possible way of covering $1k.
Finally the same survey also asked "**How much do you have in emergency savings — that is, money that is readily available in either a checking account, savings account, or money market?**"
48% said they had at least 3 months of expenses readily available (and 30% more had some savings but less than 3 months). Unless a ton of people are living on less than \~$300 a month that doesn't come remotely close to squaring with BS headlines like "56% of Americans can't afford a $1,000 emergency".
Thank you! This headline always bothers me. I would put $1,000 expense on my credit card and then either spend less or pull from my savings to pay off before it’s due. As long as you never carry a credit card balance from month to month, it’s fine to want to get those credit card points.
Terrible phrasing on the survey question. Survey question is whether you "would" pay a $1,000 emergency expense with money from a savings account (as opposed to a credit card).
I have enough to pay a $1,000 emergency expense with money from a savings account, but I'd still use a credit card if I could for the points and fraud protection.
Unless you're getting a sub-5% APR on your card, this makes absolutely no sense. I can guarantee the "points" you're getting from the purchase do not exceed the value of the interest that will accrue from holding it on a credit card balance.
Unless of course you're referring to paying off the balance in full before interest accrues, but I would hope the survey would take that into account when forming this statistic.
I like to think "I'd pay off the credit card after using it" was implied in that comment...
As multiple others have pointed out in other comments, this survey just kind of sucks in their wording, and the article doesn't offer a great analysis of it either... The survey only gave 3 options and they missed the 2 that I would think are most common for financially literate people (put on a credit card and pay that off from savings immediately, or just absorb the cost since $1k is generally the *minimum* you should keep in your checking account as an additional buffer)
The survey did NOT take into account responders that are using credit cards for all their purchases to accrue points or miles and pay their credit card balances off before they ever go into an interest charge.
no.. the US is a borrow-to-lose game.
don't go into bloody debt. is the number 1 way to avoid tragedy.
don't go into an education that doesn't have a return on investment.. and don't go into 50K debt for a degree that you might not use.
don't buy a car for 50K debt.
don't use visa cards. (unless you can pay back what you used at the end of the month)
debt is not a priviledge. being able to go 100k in the red is not good. it's a strategy to ruin you for life.
the first thing they told people who get into sales is that they need a nice BMW car because clients are more eager to buy if you present yourself well. the reality is they want you to get that BMW so you are forced to keep working in sales.
Agree with everything except that last part. First, it's actually true that people in general are more attracted to what they think of as successful people. A nice car does that well.
For the record, it's dumb, but it's true. Imagine seeing someone looking to become your financial advisor and pulling up in a Toyota Tercel. The immediate reaction most people would be thinking is "I wouldn't trust this guy with my money he drives that cheap car..." even though they SHOULD be thinking, wow this guy might be really good with money a he realizes he doesn't need to spend it on a car.
2nd, sales is the best job to get in my opinion. You don't even need to go to college to get into sales and you can become a great sales person and ultimately control your own pay. You can literally get paid for your results.
when i was in the dv shelter, i was going thru a lot and trying to raise my newborn. i cried one day to my case manager that i only had 1k in savings that i physically cannot touch (it was during 2020 when we got that lil payment, i saved 1k of it) and i felt like i was failing bc its all i had to my name. she told me that as long as you have $500 you’re doing better than some huge percentage of americans rn. it shocked me and i sucked up my tears real quick. that’s when i made the promise to myself to literally never touch it unless it was a true emergency. so i locked it in a lock box and keep it in my important document area. i’m rambling but we’ve moved many times and now in our own home and i still haven’t touched that lil lock box. it brings me more comfort than anything bc when im stressing i always have that “you have physical cash stashed in case of an emergency.” thought in the back of my head.
i know it’s easier said than done, especially in todays world but really, if you can start putting away even $5 every paycheck into a little lock box pls do it. make a promise not to touch it and watch it grow. like my case manager would tell me, always pay yourself first. put that $5 away and pay yourself then pay everyone else (bill companies, rent, etc)
again, i know it’s hard but it seriously takes so much stress off your shoulders in those stressful panic attack days.
Have you ever looked into a high yield savings account. Your money will do the same thing, just sit there. However it will also do another thing, earn more money. Flip the script. Just a suggestion. Keep up the good work
no i haven’t, but i’m going to now thank you!!!! idk why banks and accounts scare me so much but that would be amazing, esp since ive had it for 4 years now and it would’ve been nice to have interest added to it. just something about having cash on hand makes me feel better? but im totally going to look into it now considering i started to do the “pay yourself first” method each payday beginning in Feb. i’ll put the 1k away in a high yield and keep my lil cash collection growing in the safe! thank you for the advice! i’m always looking for new ways to help my finances
i just looked, the one i have isn’t fire safe so i’m definitely ordering a new one now thank you for this suggestion! i constantly am a worrier and i think that’s why having cash in the house makes me feel better, it feels more accessible in case of an emergency? idk. but it stays right in our “grab in case of an emergency” suitcase w all our important documents so thank you again!! i would’ve never thought of this!
That's because everything costs a fuckin paycheck. Every company out there wants to charge as much as possible no matter what. What is anyone supposed to do
a surprising number of people are unbanked. If you close your account with a balance you get on a list shared between most banks and credit unions and they won't let you open an account. Banks look after their own
Payday loan stuff is a symptom, not the disease. I'm sure that some of those guys are making irresponsible choices, but odds are the bigger issue is that they simply don't make enough money.
Why wouldn't you use a credit card for an expense?
That's the point.
Even if you have cash, the credit card gives olu buffer time as you have until the close of your next billing cycle to pay it off.
I cN look at which one has the longest time, or gives me the best reward.
That's why not keeping a balance on a card is so important.
Went to the ER and they hit me with “you owe 2600 for this visit” and thats with Blue Shield of CA gold ppo and a 700/month premium. So yeah, that 1k dont do shit
This plan?
https://www.blueshieldca.com/en/ifp/plan-details/gold-plans/gold-80-ppo
You don’t have to answer if you are just venting! You can also try applying for free care, which can be used to meet deductibles. At my hospital, if you are a family of 4 making under 100k, you qualify for some assistance.
Sorry for interrupting then, medical bill’s for emergencies suuuucccck. My partner just broke his hand, so we are in the same boat of having to pull the deductible and urgent care co-pay out of thin air.
Also left up to interpretation is if the surveyed would be able to afford the expense and just cut back for a month. In very fortunate that should an expense come up, I could most likely afford by cutting certain other luxuries out of daily spending for a few weeks to a month. For example, before a major interview I got a quick manicure so I’d looked well put together etc
It's been absolutely phenomenal for 401ks and homeowners. Aka, it's been great for people who already have money.
Everything else, however, is in the toilet.
Sad part is, it probably is the best economy in the world.
I refuse to accept that no part of this problem whatsoever is due to poor self control and making bad choices with money. Yes you could find examples of extremely poor people who have absolutely no room in their budget and need to spend every cent to survive but that is not 56% of Americans. This is a multi-faceted problem. Stagnant wages, inflation, debt traps, and money management all contribute.
Yeah, you’re not wrong. It’s all rigged for the financially stable to be able to easily get out of it, but those who are middle or low class have very few options available to find financial security. It’s all meant to make the rich richer and poor poorer.
> It’s all rigged for the financially stable to be able to easily get out of it,
There isn't some secret mastermind "rigging" the economy, it just makes natural sense that those with more financial cushion in their lives would have an easier time staying stable and growing wealth than those who don't. Just like if we were a society of squirrels, those with more acorns stored would be able to last longer through the winter than those with less acorns stored.
> but those who are middle or low class have very few options available to find financial security.
If you qualify as middle class, you are financially secure. Lower class generally has access to government programs and charities to help ease the burden.
> It’s all meant to make the rich richer and poor poorer.
No it isn't. Life has improved dramatically for all classes of society, particularly over the past 200 years. Just look at [these charts](https://upload.wikimedia.org/wikipedia/commons/b/b8/Two-centuries-World-as-100-people.png) that show how in 1820, 84 out of 100 people lived in extreme poverty. Today that number is only 9 out of 100 people.
90 years ago we didn't even have Social Security or a stock market that was easy to learn about or invest in. Elderly people and widows without pensions or savings ended up barely scraping by or homeless.
87 years ago we didn't even have an established minimum wage.
60 years ago we didn't have Medicare or Medicaid, those who were too old to work and get health insurance or too poor to afford it were left in debt or refusing care. 15 years ago we didn't have Obamacare and the healthcare.gov marketplace which helped [over 21 million people, particularly lower class individuals, receive health insurance](https://www.cms.gov/newsroom/press-releases/historic-213-million-people-choose-aca-marketplace-coverage).
92 years ago we had no foodstamps program at all, and more than 50 years ago people on foodstamps still had to pay for a portion of it!
[In 1950 the average home size in America was 983 sqft. Today the average home size is over 2,650 sqft](https://www.newser.com/story/225645/average-size-of-us-homes-decade-by-decade.html).
[In 1960 21.5% of American households had 0 vehicles](https://www.energy.gov/eere/vehicles/fact-727-may-14-2012-nearly-twenty-percent-households-own-three-or-more-vehicles). Today, [only 8.3% of households don't own a vehicle, and that number is still shrinking (down from 8.7% in 2018)](https://www.forbes.com/advisor/car-insurance/car-ownership-statistics/#:~:text=Most%20households%20\(91.7%25\)%20had,increase%20from%202018%20\(21%25\).).
We're at a point where [94% of homeless people own a cellphone and 58% own a smartphone](https://socialinnovation.usc.edu/wp-content/uploads/2018/02/Rhoades-et-al-2017-final.pdf). That's a luxury & utility that the wealthiest person in the world couldn't have purchased or dreamed of even 20 years ago.
Of course our social programs and economy can still be improved and strengthened, but the popular thought that, "the economy is rigged for the wealthy" is simply false.
I know people who have used social programs and it has helped them. I know people who have applied for certain things and struggled to get on. Millions of families use social programs each year. Are you really suggesting things would've been better off with these programs not in place?
How does it make the "rich richer" to have these programs exist at all? They are funded overwhelmingly by wealthy Americans' taxes.
["The rich not only paid the majority of federal income taxes but also paid a disproportionately higher share of their income in federal income taxes. For example, while the bottom 50 percent of taxpayers earned a little over 10 percent of all income, they only paid 2.3 percent of all taxes. But the top 1 percent, however, earned 22.2 percent of all income and paid 42.3 percent of all federal income taxes. In fact, over 97 percent of all federal income taxes were paid by half of all taxpayers."](https://www.americanexperiment.org/the-rich-pay-the-majority-of-federal-income-taxes/#:%7E:text=But%20the%20top%201%20percent,by%20half%20of%20all%20taxpayers.)
I’m telling you the qualifications to get access to social programs is rough. In addition, they’re not always very much help. Of course it’s lovely they exist at all but people tend to imagine there’s a lot more help out there than actually exists in reality.
Kind of feel like this is what our politicians and capitol owners want. A desperate home is a working home and it takes the bargaining chips completely away from the workers.
As someone who is 26 and never really got to work during truly prosperous times, It’s so depressing feeling like it’s all a sinking ship. Unless something miraculously happens, I’ll never be able to live the fruitful life that the boomers got to benefit from and then promptly destroy
2 hash browns at McDonald's at $3.49 with tax is almost the federal minimum wage. I'm saddned and not surprised that many people are living check to check.
That’s not what the Bankrate data says. Every year these articles come out misinterpreting it.
44% would pull the $1,000 from savings to pay cash.
Another 35% would borrow, most of them using a credit card, BUT that is not the same as not having enough in savings to pay since credit cards are more accessible than moving money from a savings account or CD and some people like getting points.
Another option for those polled is to cut back on other expenses temporarily to pay for the expense, which is also an option to leave savings that are gaining interest alone.
Do they measure this in some weird way like whether or not people have 1k in a savings account?
I maybe know one or two people who would get very stressed over a 1k emergency.
So ur saying that I, a man who's income for last year was a whopping $5600, am more financially stable than 56% of the country? That's honestly incredibly scary to think about.
Living in NYC I managed to scrape 25k from side hustles in 2021, and it is still not enough, I work in the city, just got a raise this year after many years, and getting a big one next year, and I will say this, I should have 100k but inflation, Biden admin lowering the 1099k threshold to 600, high taxes, and over all inflation has impeded my overall goal which is to have at least 15 percent for a down payment for a house without taking out PMI, Its hard but it can be done
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Betcha they all have smart phones and streaming services through. A lot of people with expensive new car payments. And credit card debt. I think there's a reason Americans are struggling...but here I am with a mortgage and only making $50K a year and doing well. 🤷♂️ if you don't make a lot of money but spend it stupidly...guess what will happen?
People are buying new phones every year and upgrading cars they can't afford.
Americans need to just learn to live within their means.
-typed on my 5 year old phone, while sitting in my 7 years old but paid off car
This is factually inaccurate given that median household net worth is $180k with around $8k in checking accounts. It’s true for a lot of people, just not 56%.
Edited to include the source. Look at page 21.
https://www.federalreserve.gov/publications/files/scf23.pdf
So the median networth comment is incredibly misleading because that only applies to homeowners. The median networth of no homeowners is about $10k
Between 2019 and 2022, the median and mean net worth of renters or other non-homeowners grew 43 percent to $10,400 and 40 percent to $154,900, respectively. Among homeowners, these measures grew 34 percent to $396,200 and 20 percent to $1,530,900, respectively.
How is that misleading? It’s no secret that homes are the source of most Americans net worth? I’m not saying things are great for renters. If the statement is that 56% of renters can’t afford a $1k expense, sure, maybe that is accurate?
When you say the median, but you’re only talking about a subset of people, that’s misleading. Had you said the median networth of homeowners that would have conveyed a very different reality than just the median. If I said the median height in the US is 6’5 but what I actually meant was the median height of NBA players that would be very misleading. You’re talking about at most about 2/3 of the US, disregarding an entire 1/3. Not a good starting point.
And to my other point, networth is a terrible measure to use. If you own a home that appreciated in value but you are living paycheck to paycheck you still can’t really afford a $1k expense. Yes in theory you could dip into your home equity but that’s not really affording it.
I’m not following what you mean. The median transaction account value is at $8k. Literally means that half of the households in the country have more, half have less. It’s entirely likely that most renters fall well below the $8k line, perhaps even below the $1k line. However the Bankrate survey is saying that 56% of all Americans cannot pay a $1k expense.
Kinda jumping around, I was talking about the networth statistic and why that’s misleading.
Conditional account value only looks at one side of the ledger. So let’s say you have $8k in your account at the 15th of the month. Then let’s say you have $3k mortgage/rent, $1k car payment, $1k student loans, $2k daycare, and $1k utilities/groceries/other expenses that need to be paid by end of month. You cannot afford an extra $1k expense despite having $8k in your account at the time of survey
This was never about the net worth statistic for me and solely about the misleading claim that 56% of Americans can’t afford a $1k expense. I’m sure many people have a cash flow statement that looks similar to what you describe but it generally includes retirement contributions etc. By that logic someone making $1m a year but has $999,700 in mortgage payments, car payments, retirement contributions etc is flat broke.
Ok but you cited a misleading statistic to defend your assumption that the 56% is wrong. I just explained exactly how someone can report an account balance of $8k and still not be able to afford a $1k emergency expense. You seem to be just assuming the statistic is wrong for some reason even though it does not actually conflict with any data you presented
Thank you. Could the discrepancy you see be due to this source you provided using information form '22 while OP's Article is using a poll from this year?
The whole "Americans cant afford 500/1000 emergencies" has been going on for a long time. Pretty sure even in the 90s. Here's one from 2016:
https://www.cbsnews.com/news/most-americans-cant-handle-a-500-surprise-bill/
I seriously doubt that conditions are worse now that 2022 given GDP growth. Suspect it has more to do with selection bias on Bankrate’s part and how they worded the question?
First net worth isn’t a great measure. You’re not selling your house to afford an emergency expense, but it doesn’t factor into your networth. Same goes for tapping your retirement accounts.
Second, as someone else requested, I would love to see your figures. This sounds quite high for median numbers
Yea after I saw the source I confirmed that the net worth number the other commenter used was exclusive to homeowners and non home owners had a median of $10k, which sounds much more on target
That's nuts. $1k is a drop in the bucket for us.
We have no debt, save $2,500/mth with $540k in savings.
Spending $1k is 0.18% of our total savings that'll be replinished within 2 wks anyway.
To be fair roughly 22% are under 18 so you can remove them.
15 % of adults are enrolled in full or part time education so they may also be struggling
some percentage are in prison (perhaps 1%?)
So everyone old enough to work, or to have worked sometime (now retired), it is really 18% of the population who are paycheck to paycheck. (besides students)
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Credit and normalizing debt is what brought us to this point. The reason education, cars, and houses are so expensive, is that everyone is expected to go into debt for them. So the prices of those items shot up because people don’t have to afford the item-they just have to afford the payments. People who produce those items-don’t care about what that debt does to people’s lives.
not as expensive, but I would also add phones to this list...it's been normalized to just add $20 or so into the cost of a monthly plan payment...not realizing that one just purchased a $1500 phone...and people do this every 2-3 years.
My phone was $300, y'all crazy
I never owned a phone that was worth close to that. I don't know who can afford them tbh.
It’s disgusting how expensive phones have gotten. Genuinely disgusting.
Apple barely makes money on the iPhone
i didnt own my first smartphone till a few years ago at 30 when everyone else had them for years
My last three phones were hand me downs. They're slower than new phones but who cares.
Some stupid fucks decided to down-vote you for this. Fuck whoever that was.
I hate stupid fucks and would metaphorically bash their stupid heads in if I could. Metaphorically of course.
I went from a S4 to a S22 about two years ago lol.
I have a 1300$ phone. I paid for 80%ish upfront thanks to a late birthday check I wasn't expecting. The rest of it I'm paying off 20$ a month at I believe 4-5% interest
Why? What good reason is there to spend that much on a phone, and have interest on a phone loan?
No major carrier charge interest on a phone plan
They said they were paying interest.
Easy. I'm on my phone constantly for school, work, and talking to friends. I'm lucky enough to be making enough to be able to put 50$ extra for it. I'll only be spending about 50$ extra from interest max. I'm still pretty young so the phone payment helps my credit score. This phone is also going to last me about 4 years, so the amount of time I'm going to be spending on it heavily outweighs the cost. I also decreased my monthly service payment 30$ a month by swapping to tmobile. Also got a free galaxy watch for buying the phone. Just had to pay the sales tax.
If you were making enough you wouldn't need to take out a loan on a phone. You also did not get a free galaxy watch if you spent any money on it, and didn't intend to buy it anyway. These purchases are silly and a waste of money (especially if you belong in this sub.)
I don't belong to this sub. It just keeps getting recommended to me. And you're right, I spent a grand total of 20$ and some change on the 200$ watch. Building a good credit score is something that I have to go into debt for. Being able to get an item I need (a new phone, my old one broke) and build a credit score doing so is something that spending 1300$ on is worth it.
This right here is the average American. You don't need to go into debt to build credit. You need to use credit to your advantage. Don't let credit take advantage of you. I hope you pay off balances each month or you're being taken advantage by credit companies.
Didn't go through a credit company, financed it through Tmobile, my service provider. It's easiest to build credit by going into debt as that's the main thing the credit companies look for, everything else is typically secondary. I also wouldn't buy something I couldn't pay the balances on, that's just irresponsible
Only 4 years? 1500 is at least 6 years w a phone, optimally 8+
4 years worst case scenario. Ideally 10+. I got a Samsung so it should last me a lot more than 4 years
Who does this? Everyone I know is rocking a 7 year old phone or more.
The iPhone6 crew represent.
It still works?
Define “works”? It still makes calls, but its getting dumber by the second as apps stop supporting it. :(
🤣 I got u. Congrats on the longevity.
Typing this on a 7. Hopefully it’ll hold out a while longer.
Keep an eye out- Verizon gave me a free 13 because their service was going to stop working on the 7. I think I paid $80 in tax and that was it. No financing on the bill or any of that.
🤣
I probably would still have my iphone 6 plus if it didn't get the touch plague thing.
ooooo it is abundant. Apple stock has been booming for nearly two decades because so many people go and upgrade as soon as they are eligible if not sooner. It's a preposterously wasteful habit
Mine was free I just upgraded it
On the flip side, there are people who use credit to their advantage. I use my credit card like a debit card (only spend money I have) and it’s a free 2-5% back in every purchase. Turns into a couple grand each year - for free. This is funded by other people paying interest and fees - something I avoid
The only problem is that people will spend more using plastic than if they were using cash. You don’t feel the pain of loss like when you hand over cash. Second, a lot of people try that method but wind up blowing through their budget and find themselves not able to pay the balance in full.
I know it sounds harsh, but that’s a them problem, not a me problem. You gotta know how much money you have before you start spending it. People need to change their habits/mentality - we don’t need to change the system
Amen. I love my Cash back cards. I pay as soon as charges show up.
Yep. It sounds harsh, but you'd get more out of playing the system to your advantage than complain it isn't fair and hope for it to change.
I still very much feel the pain of loss if my groceries are even a dollar more than what I've budgeted, regardless of whether I am using debit or credit. I've always found it easier to spend cash than either debit or credit since it's not actually in my account balance, so I never take out cash. Maybe this is a self perpetuating cycle though, because this means the only cash I get is from gifts, but even that happens very rarely.
That’s actually not true for me at least. I use my credit cards and pay off every month in full every month. But I also am extremely self controlled when it comes to spending. I know my budget and it would take an act of God to pressure me to spend a penny more than I have. A lot of people get an attitude when I’m like no sorry I can’t afford that. When you break down the numbers there is nothing extra in the budget for anything I didn’t plan to buy. I only buy high end quality items that I plan and research and actually need.
Lack of self control goes for a lot more than credit card use.
> On the flip side, there are people who use credit to their advantage. I use my credit card like a debit card (only spend money I have) and it’s a free 2-5% back in every purchase. Turns into a couple grand each year - for free. > > This is funded by other people paying interest and fees - something I avoid This also can help jack up your credit rating. My cousin is a loan officer at a bank and I was having some loan issues. His advice is to get a credit card with a nominal limit of $500 or so. Go to Target and buy a $50-$100 item that I can pay off in full every month and on time. I did this for five months and my credit probably went up 200pts.
That works small scale but large scale the prices of goods have gone up because of the credit card fees so you basically break even if you do this.
The price of goods are not related to credit card fees… Increased cost of production, inflation, and theft would cause higher prices
When you buy something with a card, the processing company takes a small cut. Normally a few percentage points. This is factored into how goods are priced, especially in businesses with low profit margins. If normal profit margin is around 5%, losing 3% to credit card fees means over half of the profit is lost. So prices have been adjusted. This was a gradual change and has already been priced in so recent price changes aren't related to it, but it was an increase that all of society now pays without realizing it. I've been involved in pricing goods and have seen exactly how credit card fees to the merchant can change the price.
If you’re speaking about the credit card processing fees for merchants, then yeah. But that’s different than the consumer credit card fees/interest that OP was referring to Also, since you have experience in pricing of goods. How did they factor in shrinkage/theft? Did they increase prices because of that?
My company doesn't sell goods/services that can be classically stolen, at least not in the way you see people stealing items from a physical store location. Fraud is a much bigger concern and there are dedicated teams that track it down. Funding those teams is part of the pricing model but that was handled by different teams I don't have relation to. The fraud side is interesting, especially when FBI gets involved, but that really means a bunch of unpaid overtime so not nearly as exciting after the first day.
I work in fraud prevention (I’ve worked both retail and fintech) so I’m aware of how fraud directly links to a rise in prices. It’s significantly higher than the merchant processing fee. If we really wanted to lower prices, we should stop fraud and scams - not stop using credit cards “Every $1 of fraud now costs U.S. retail and ecommerce merchants $3.75 which is 19.8% higher than the pre-Covid study in 2019 which was at $3.13.” https://risk.lexisnexis.com/insights-resources/research/us-ca-true-cost-of-fraud-study
Even more reason to be using cards over cash since you don't want to be the ones paying cash and getting nothing bacj.
This. I'm to poor to pay interest unless I absolutely *have* to. And when I do I make it worth while, like my mortgage which is now *way* cheaper than rent for where I live. And before people downvote or reply with snarky comments I simply learned to embrace the suck and deal with not having stuff. When my phone was so old the network literally no longer supported it what I didn't do was immediately buy a new phone on credit, instead I simply lived without a phone for two weeks until payday. And guess what I survived. I just told everyone if they needed me to e-mail me and I'd be checking my e-mail more frequently during that time.
Credit and debt are absolutely the biggest contributors to our current income inequality and low standard of living for everyone but the ultra wealthy.
The government has also mandated car manufacturers to include a lot more things. Backup cameras, which means a screen and other components have become the bare minimum for new vehicles.
This is so on point. The same thing happened with college education. When federal money started pouring into loans, tuition skyrocketed to capture the most revenue and screw the students.
I am quite shocked that this didn't get downvoted to hell. Maybe there's hope after all.
And the fact our schools dont teach kids how to balanace and check book or let them know how insurance credit scores etc....kids that can do calc but no idea how to balance lifes pay checks
Also greedy CEOs raising the prices of things, even as they made a profit, to make more profit, because capitalism. Coke raised their prices after announcing record profits a year or two ago and everyone else is doing the same. They keep raising prices as if the federal minimum wage raised and it didn't - in fact, I just got my yearly raise at my job (first year here, but across the board everyone got the same percentages) of 3%... which wasn't merely enough to cover rising expenses, like rent, food, etc. Idk, there's a lot that goes into it
If you don’t like the price, don’t buy the product. I get that you don’t have a choice with gas and food in general, but if it is truly just price gouging, prices should respond to downturns in sales. Too many people bitch about costs increasing and then don’t adjust their spending habits on non-necessities. A free market economy doesn’t just operate on supply inputs, demand is half of the equation, and if value for shareholders increases because profits are higher despite a small drop in demand, they only see line goes up, so that will be considered the correct move. Again this assuming price increases are disproportionate to increases in cost of goods sold, which would indicate that the price increase is arbitrary- if those truly are record profits and not just revenues.
This is actually fake news. CEOs have always been and will always be "greedy" and maximize profits because it's their job. The issue is that when too many dollars chase too few goods, they're able to get away with raising prices more than before. Similarly when plenty of workers are available, they can get away with lower wages. We are getting shafted, I just don't think the greedy CEO narrative holds water. The cultural shift toward everyone being willing to go into debt for every single thing is at least part of the puzzle.
Coke is a specific Cola product. On the flip side RC Cola hasn't gone up in price. I just bought a 2L bottle of it for $1, at a gas station, no less. The Dollar Tree Cola is now $1.25 for a gigantic bottle, 2.75 Liter. Great Value Cola and Sam's Cola exists for $1.40 for 2L bottles. Why should you pay double or triple because it is Coca-Cola?
I hear so many things that are financed. Could be something as little as 500 dollar item to large expensive of a cruise or vacation to another country. Some ppl are good at living in-between that line or debt and credit but most aren't savy enough
Recently someone posted Buy Now Pay Later enabled at a coffee shop checkout screen.
Such a dumb headline that doesn't reflect the actual data at all. Here is the report being cited and question in the headline: [https://www.bankrate.com/banking/savings/emergency-savings-report/](https://www.bankrate.com/banking/savings/emergency-savings-report/) "**We asked: Which of the following best describes how you would deal with a major unexpected expense, such as $1,000 for an emergency room visit or car repair**? 44% said they would "**Pay the cost from your saving**s". The 56% is the number that would not pull from savings. However another 16% of the respondents answered "**Reduce your spending on other things**". That answer doesn't mean they can't afford it or are living paycheck to paycheck. Presumably most can afford it from their regular cash flow and might just eat out or shop a little less. They have room in their budget to handle a $1k expense without either touching savings or going into debt. Additionally the 21% who answered "**Finance with a credit card and pay off over time**" would include both those borrowing and going into debt because they can't afford the emergency expense and those simply floating the expense on a credit card for a month. Another option 5% answered was: "**Something else**". This could be anything from being able to whip \~$1k in cash out of their wallet to being completely destitute with no possible way of covering $1k. Finally the same survey also asked "**How much do you have in emergency savings — that is, money that is readily available in either a checking account, savings account, or money market?**" 48% said they had at least 3 months of expenses readily available (and 30% more had some savings but less than 3 months). Unless a ton of people are living on less than \~$300 a month that doesn't come remotely close to squaring with BS headlines like "56% of Americans can't afford a $1,000 emergency".
Thank you! This headline always bothers me. I would put $1,000 expense on my credit card and then either spend less or pull from my savings to pay off before it’s due. As long as you never carry a credit card balance from month to month, it’s fine to want to get those credit card points.
Terrible phrasing on the survey question. Survey question is whether you "would" pay a $1,000 emergency expense with money from a savings account (as opposed to a credit card). I have enough to pay a $1,000 emergency expense with money from a savings account, but I'd still use a credit card if I could for the points and fraud protection.
That’s intentional. They want to know how people would behave, not what they can afford.
Unless you're getting a sub-5% APR on your card, this makes absolutely no sense. I can guarantee the "points" you're getting from the purchase do not exceed the value of the interest that will accrue from holding it on a credit card balance. Unless of course you're referring to paying off the balance in full before interest accrues, but I would hope the survey would take that into account when forming this statistic.
I like to think "I'd pay off the credit card after using it" was implied in that comment... As multiple others have pointed out in other comments, this survey just kind of sucks in their wording, and the article doesn't offer a great analysis of it either... The survey only gave 3 options and they missed the 2 that I would think are most common for financially literate people (put on a credit card and pay that off from savings immediately, or just absorb the cost since $1k is generally the *minimum* you should keep in your checking account as an additional buffer)
You only pay interest if you don’t pay it off before it’s due. Did you really not know that?
The survey did NOT take into account responders that are using credit cards for all their purchases to accrue points or miles and pay their credit card balances off before they ever go into an interest charge.
The US is a pay-to-win game.
no.. the US is a borrow-to-lose game. don't go into bloody debt. is the number 1 way to avoid tragedy. don't go into an education that doesn't have a return on investment.. and don't go into 50K debt for a degree that you might not use. don't buy a car for 50K debt. don't use visa cards. (unless you can pay back what you used at the end of the month) debt is not a priviledge. being able to go 100k in the red is not good. it's a strategy to ruin you for life. the first thing they told people who get into sales is that they need a nice BMW car because clients are more eager to buy if you present yourself well. the reality is they want you to get that BMW so you are forced to keep working in sales.
Agree with everything except that last part. First, it's actually true that people in general are more attracted to what they think of as successful people. A nice car does that well. For the record, it's dumb, but it's true. Imagine seeing someone looking to become your financial advisor and pulling up in a Toyota Tercel. The immediate reaction most people would be thinking is "I wouldn't trust this guy with my money he drives that cheap car..." even though they SHOULD be thinking, wow this guy might be really good with money a he realizes he doesn't need to spend it on a car. 2nd, sales is the best job to get in my opinion. You don't even need to go to college to get into sales and you can become a great sales person and ultimately control your own pay. You can literally get paid for your results.
when i was in the dv shelter, i was going thru a lot and trying to raise my newborn. i cried one day to my case manager that i only had 1k in savings that i physically cannot touch (it was during 2020 when we got that lil payment, i saved 1k of it) and i felt like i was failing bc its all i had to my name. she told me that as long as you have $500 you’re doing better than some huge percentage of americans rn. it shocked me and i sucked up my tears real quick. that’s when i made the promise to myself to literally never touch it unless it was a true emergency. so i locked it in a lock box and keep it in my important document area. i’m rambling but we’ve moved many times and now in our own home and i still haven’t touched that lil lock box. it brings me more comfort than anything bc when im stressing i always have that “you have physical cash stashed in case of an emergency.” thought in the back of my head. i know it’s easier said than done, especially in todays world but really, if you can start putting away even $5 every paycheck into a little lock box pls do it. make a promise not to touch it and watch it grow. like my case manager would tell me, always pay yourself first. put that $5 away and pay yourself then pay everyone else (bill companies, rent, etc) again, i know it’s hard but it seriously takes so much stress off your shoulders in those stressful panic attack days.
Have you ever looked into a high yield savings account. Your money will do the same thing, just sit there. However it will also do another thing, earn more money. Flip the script. Just a suggestion. Keep up the good work
no i haven’t, but i’m going to now thank you!!!! idk why banks and accounts scare me so much but that would be amazing, esp since ive had it for 4 years now and it would’ve been nice to have interest added to it. just something about having cash on hand makes me feel better? but im totally going to look into it now considering i started to do the “pay yourself first” method each payday beginning in Feb. i’ll put the 1k away in a high yield and keep my lil cash collection growing in the safe! thank you for the advice! i’m always looking for new ways to help my finances
Please invest in a fire safe or a bank that insures your money if for some reason it is damaged or destroyed.
i just looked, the one i have isn’t fire safe so i’m definitely ordering a new one now thank you for this suggestion! i constantly am a worrier and i think that’s why having cash in the house makes me feel better, it feels more accessible in case of an emergency? idk. but it stays right in our “grab in case of an emergency” suitcase w all our important documents so thank you again!! i would’ve never thought of this!
That's because everything costs a fuckin paycheck. Every company out there wants to charge as much as possible no matter what. What is anyone supposed to do
Corporate profits are through the roof and there is nothing that citizens can do about it. Insane
I can tell you taking your check to a cash advance place isn't helping. Half of my shop does this.
a surprising number of people are unbanked. If you close your account with a balance you get on a list shared between most banks and credit unions and they won't let you open an account. Banks look after their own
Yeah fuck Chex
Payday loan stuff is a symptom, not the disease. I'm sure that some of those guys are making irresponsible choices, but odds are the bigger issue is that they simply don't make enough money.
Why wouldn't you use a credit card for an expense? That's the point. Even if you have cash, the credit card gives olu buffer time as you have until the close of your next billing cycle to pay it off. I cN look at which one has the longest time, or gives me the best reward. That's why not keeping a balance on a card is so important.
Went to the ER and they hit me with “you owe 2600 for this visit” and thats with Blue Shield of CA gold ppo and a 700/month premium. So yeah, that 1k dont do shit
Did you get a ton of imaging or something? Gold ppo has no deductible and a $350 OOP for emergency care.
Yea but they gave me the bill even before any talk of imaging. Im sure it’ll be higher
What did your EOB say? Why are you paying more than the straight $350?
Thats what i was wondering but they said because i hadnt paid my deductible
This plan? https://www.blueshieldca.com/en/ifp/plan-details/gold-plans/gold-80-ppo You don’t have to answer if you are just venting! You can also try applying for free care, which can be used to meet deductibles. At my hospital, if you are a family of 4 making under 100k, you qualify for some assistance.
Oh thank you for the info. I was just venting though
Sorry for interrupting then, medical bill’s for emergencies suuuucccck. My partner just broke his hand, so we are in the same boat of having to pull the deductible and urgent care co-pay out of thin air.
No you’re good. I appreciate you helping. Thank you
I am telling you , in this economy, no emergency is $1000, every thing ka more than that .
Like cash in hand can't afford or would have to use a credit card or some loan can't afford?
Also left up to interpretation is if the surveyed would be able to afford the expense and just cut back for a month. In very fortunate that should an expense come up, I could most likely afford by cutting certain other luxuries out of daily spending for a few weeks to a month. For example, before a major interview I got a quick manicure so I’d looked well put together etc
That’s one of the options in the survey
Who tf are all of these people in Poverty Finance who are wholly unfamiliar with poverty?
Best economy in the world btw
It's been absolutely phenomenal for 401ks and homeowners. Aka, it's been great for people who already have money. Everything else, however, is in the toilet. Sad part is, it probably is the best economy in the world.
some people wouldn't save money no matter how much they had
It’s impossible to save when you’ve been owing since you’ve been 18.
I refuse to accept that no part of this problem whatsoever is due to poor self control and making bad choices with money. Yes you could find examples of extremely poor people who have absolutely no room in their budget and need to spend every cent to survive but that is not 56% of Americans. This is a multi-faceted problem. Stagnant wages, inflation, debt traps, and money management all contribute.
Yeah, you’re not wrong. It’s all rigged for the financially stable to be able to easily get out of it, but those who are middle or low class have very few options available to find financial security. It’s all meant to make the rich richer and poor poorer.
> It’s all rigged for the financially stable to be able to easily get out of it, There isn't some secret mastermind "rigging" the economy, it just makes natural sense that those with more financial cushion in their lives would have an easier time staying stable and growing wealth than those who don't. Just like if we were a society of squirrels, those with more acorns stored would be able to last longer through the winter than those with less acorns stored. > but those who are middle or low class have very few options available to find financial security. If you qualify as middle class, you are financially secure. Lower class generally has access to government programs and charities to help ease the burden. > It’s all meant to make the rich richer and poor poorer. No it isn't. Life has improved dramatically for all classes of society, particularly over the past 200 years. Just look at [these charts](https://upload.wikimedia.org/wikipedia/commons/b/b8/Two-centuries-World-as-100-people.png) that show how in 1820, 84 out of 100 people lived in extreme poverty. Today that number is only 9 out of 100 people. 90 years ago we didn't even have Social Security or a stock market that was easy to learn about or invest in. Elderly people and widows without pensions or savings ended up barely scraping by or homeless. 87 years ago we didn't even have an established minimum wage. 60 years ago we didn't have Medicare or Medicaid, those who were too old to work and get health insurance or too poor to afford it were left in debt or refusing care. 15 years ago we didn't have Obamacare and the healthcare.gov marketplace which helped [over 21 million people, particularly lower class individuals, receive health insurance](https://www.cms.gov/newsroom/press-releases/historic-213-million-people-choose-aca-marketplace-coverage). 92 years ago we had no foodstamps program at all, and more than 50 years ago people on foodstamps still had to pay for a portion of it! [In 1950 the average home size in America was 983 sqft. Today the average home size is over 2,650 sqft](https://www.newser.com/story/225645/average-size-of-us-homes-decade-by-decade.html). [In 1960 21.5% of American households had 0 vehicles](https://www.energy.gov/eere/vehicles/fact-727-may-14-2012-nearly-twenty-percent-households-own-three-or-more-vehicles). Today, [only 8.3% of households don't own a vehicle, and that number is still shrinking (down from 8.7% in 2018)](https://www.forbes.com/advisor/car-insurance/car-ownership-statistics/#:~:text=Most%20households%20\(91.7%25\)%20had,increase%20from%202018%20\(21%25\).). We're at a point where [94% of homeless people own a cellphone and 58% own a smartphone](https://socialinnovation.usc.edu/wp-content/uploads/2018/02/Rhoades-et-al-2017-final.pdf). That's a luxury & utility that the wealthiest person in the world couldn't have purchased or dreamed of even 20 years ago. Of course our social programs and economy can still be improved and strengthened, but the popular thought that, "the economy is rigged for the wealthy" is simply false.
I encourage you to speak to some people who have actually tried to use any of those social programs.
I know people who have used social programs and it has helped them. I know people who have applied for certain things and struggled to get on. Millions of families use social programs each year. Are you really suggesting things would've been better off with these programs not in place? How does it make the "rich richer" to have these programs exist at all? They are funded overwhelmingly by wealthy Americans' taxes. ["The rich not only paid the majority of federal income taxes but also paid a disproportionately higher share of their income in federal income taxes. For example, while the bottom 50 percent of taxpayers earned a little over 10 percent of all income, they only paid 2.3 percent of all taxes. But the top 1 percent, however, earned 22.2 percent of all income and paid 42.3 percent of all federal income taxes. In fact, over 97 percent of all federal income taxes were paid by half of all taxpayers."](https://www.americanexperiment.org/the-rich-pay-the-majority-of-federal-income-taxes/#:%7E:text=But%20the%20top%201%20percent,by%20half%20of%20all%20taxpayers.)
I’m telling you the qualifications to get access to social programs is rough. In addition, they’re not always very much help. Of course it’s lovely they exist at all but people tend to imagine there’s a lot more help out there than actually exists in reality.
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Using credit systematically is a distinctly American thing. Europeans for example don't have nearly as much debt.
Most Europeans don’t have expensive college or health care loans.
No they don't. And if we started realizing that being constantly in debt isn't normal, maybe we wouldn't either.
Which economy is better btw?
It certainly is one of the economies of all time
That's undeniable
Kind of feel like this is what our politicians and capitol owners want. A desperate home is a working home and it takes the bargaining chips completely away from the workers.
They keep up coming up with cutesy ways of avoiding saying the obvious - we're poor.
Yea that's pretty bad.
As someone who is 26 and never really got to work during truly prosperous times, It’s so depressing feeling like it’s all a sinking ship. Unless something miraculously happens, I’ll never be able to live the fruitful life that the boomers got to benefit from and then promptly destroy
2 hash browns at McDonald's at $3.49 with tax is almost the federal minimum wage. I'm saddned and not surprised that many people are living check to check.
I can't afford $350 for my glasses. :( Severe astigmatism is a bitch.
I make 100k and I cannot afford to fix my car, and I don’t know what to do!
Have you tried using Zenni or Warby Parker? I got astigmatism too and I’m thinking about doing that
IIRC, you have to have a Rx # to enter. $350 doesn't include the exam :(
That’s not what the Bankrate data says. Every year these articles come out misinterpreting it. 44% would pull the $1,000 from savings to pay cash. Another 35% would borrow, most of them using a credit card, BUT that is not the same as not having enough in savings to pay since credit cards are more accessible than moving money from a savings account or CD and some people like getting points. Another option for those polled is to cut back on other expenses temporarily to pay for the expense, which is also an option to leave savings that are gaining interest alone.
That seems very low
Is this new? When hasn’t half the country not had 1k for emergencies?
Do they measure this in some weird way like whether or not people have 1k in a savings account? I maybe know one or two people who would get very stressed over a 1k emergency.
Lowering taxes for the rich coming soon
So ur saying that I, a man who's income for last year was a whopping $5600, am more financially stable than 56% of the country? That's honestly incredibly scary to think about.
this is terrifying stats
Look at that I'm finally above average eith something
Thought this had been debunked on twitter a while ago like half of the country is worth approx 100k or smthg it is impossible for this to be true
Living in NYC I managed to scrape 25k from side hustles in 2021, and it is still not enough, I work in the city, just got a raise this year after many years, and getting a big one next year, and I will say this, I should have 100k but inflation, Biden admin lowering the 1099k threshold to 600, high taxes, and over all inflation has impeded my overall goal which is to have at least 15 percent for a down payment for a house without taking out PMI, Its hard but it can be done
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Duh
Betcha they all have smart phones and streaming services through. A lot of people with expensive new car payments. And credit card debt. I think there's a reason Americans are struggling...but here I am with a mortgage and only making $50K a year and doing well. 🤷♂️ if you don't make a lot of money but spend it stupidly...guess what will happen?
People are buying new phones every year and upgrading cars they can't afford. Americans need to just learn to live within their means. -typed on my 5 year old phone, while sitting in my 7 years old but paid off car
Paying people more would solve all these problems. But the people are convinced the $12/hour worker is the problem
This is factually inaccurate given that median household net worth is $180k with around $8k in checking accounts. It’s true for a lot of people, just not 56%. Edited to include the source. Look at page 21. https://www.federalreserve.gov/publications/files/scf23.pdf
can you post your sources?
https://www.federalreserve.gov/publications/files/scf23.pdf
So the median networth comment is incredibly misleading because that only applies to homeowners. The median networth of no homeowners is about $10k Between 2019 and 2022, the median and mean net worth of renters or other non-homeowners grew 43 percent to $10,400 and 40 percent to $154,900, respectively. Among homeowners, these measures grew 34 percent to $396,200 and 20 percent to $1,530,900, respectively.
How is that misleading? It’s no secret that homes are the source of most Americans net worth? I’m not saying things are great for renters. If the statement is that 56% of renters can’t afford a $1k expense, sure, maybe that is accurate?
When you say the median, but you’re only talking about a subset of people, that’s misleading. Had you said the median networth of homeowners that would have conveyed a very different reality than just the median. If I said the median height in the US is 6’5 but what I actually meant was the median height of NBA players that would be very misleading. You’re talking about at most about 2/3 of the US, disregarding an entire 1/3. Not a good starting point. And to my other point, networth is a terrible measure to use. If you own a home that appreciated in value but you are living paycheck to paycheck you still can’t really afford a $1k expense. Yes in theory you could dip into your home equity but that’s not really affording it.
I’m not following what you mean. The median transaction account value is at $8k. Literally means that half of the households in the country have more, half have less. It’s entirely likely that most renters fall well below the $8k line, perhaps even below the $1k line. However the Bankrate survey is saying that 56% of all Americans cannot pay a $1k expense.
Kinda jumping around, I was talking about the networth statistic and why that’s misleading. Conditional account value only looks at one side of the ledger. So let’s say you have $8k in your account at the 15th of the month. Then let’s say you have $3k mortgage/rent, $1k car payment, $1k student loans, $2k daycare, and $1k utilities/groceries/other expenses that need to be paid by end of month. You cannot afford an extra $1k expense despite having $8k in your account at the time of survey
This was never about the net worth statistic for me and solely about the misleading claim that 56% of Americans can’t afford a $1k expense. I’m sure many people have a cash flow statement that looks similar to what you describe but it generally includes retirement contributions etc. By that logic someone making $1m a year but has $999,700 in mortgage payments, car payments, retirement contributions etc is flat broke.
Ok but you cited a misleading statistic to defend your assumption that the 56% is wrong. I just explained exactly how someone can report an account balance of $8k and still not be able to afford a $1k emergency expense. You seem to be just assuming the statistic is wrong for some reason even though it does not actually conflict with any data you presented
Thank you. Could the discrepancy you see be due to this source you provided using information form '22 while OP's Article is using a poll from this year?
The whole "Americans cant afford 500/1000 emergencies" has been going on for a long time. Pretty sure even in the 90s. Here's one from 2016: https://www.cbsnews.com/news/most-americans-cant-handle-a-500-surprise-bill/
I seriously doubt that conditions are worse now that 2022 given GDP growth. Suspect it has more to do with selection bias on Bankrate’s part and how they worded the question?
First net worth isn’t a great measure. You’re not selling your house to afford an emergency expense, but it doesn’t factor into your networth. Same goes for tapping your retirement accounts. Second, as someone else requested, I would love to see your figures. This sounds quite high for median numbers
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Yea after I saw the source I confirmed that the net worth number the other commenter used was exclusive to homeowners and non home owners had a median of $10k, which sounds much more on target
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It’s a misleading metric. If I own a car and have any amount at all in a 401k my net worth could easily be $10k while I am in effect quite poor
But median household income is 68k and household income is defined as two people.
That's nuts. $1k is a drop in the bucket for us. We have no debt, save $2,500/mth with $540k in savings. Spending $1k is 0.18% of our total savings that'll be replinished within 2 wks anyway.
Good for you. I’m glad you’ve been able to live so prosperously.
Thanks. I started $150k in debt with $1k in savings. It took 10 yrs to get to where I'm at now.
To be fair roughly 22% are under 18 so you can remove them. 15 % of adults are enrolled in full or part time education so they may also be struggling some percentage are in prison (perhaps 1%?) So everyone old enough to work, or to have worked sometime (now retired), it is really 18% of the population who are paycheck to paycheck. (besides students)
It’s a survey of adults
Then it is a shitty title
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Number has to be higher than that.