28% of Americans Cannot Afford $10 Emergency

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28% of Americans Cannot Afford $10 Emergency

Postby Soontir C'boath » 2017-05-18 08:39pm

Having knowing people who need money to scrape a fare for the subway, I can believe it.
Consumerist

If you opened your mailbox today and found that you owed the city $100 and you had to pay it right away, would you be able to? A new report claims that nearly half of us are not prepared to absorb this cost, and more than 1-in-4 Americans is up a creek if they have to unexpectedly pay as little as $10.

This is according to a new survey [PDF] from Bloomberg and New America, which looks at — among other things — our ability to cope with financial surprises.

For instance, when 1,000 online respondents were asked if they were prepared for unexpected expenses, such as medical bills or home repairs, the majority did not have a safety net to cover these bills.

Four out of five survey respondents said they would not be able to afford an unanticipated bill of $1,000. If you’ve ever been hit with a medical emergency that your insurance didn’t fully cover, you probably know that $1,000 is a small amount compared to many hospital bills.

A $100 surprise invoice would put 48% of Americans in a bind, says the survey. That means something like a parking ticket, a minor auto repair, or a broken window would land them in debt.

Even at $10 — an amount that many people will spend on a forgettable lunch on any given day — 28% of respondents said they would have to worry about being able to pay.

Given all this uncertainty, it makes sense that most respondents put a premium on stability. However, most people say they aren’t sure how much they are going to earn from month to month. In fact, a quarter of American workers say their income varies on a weekly basis.

In spite of all this uncertainty, most respondents (73%) said they expect their kids to do better and make more money than they do.

They also reported being a bit more optimistic of their own futures, with 61.7% of survey participants noting that they expected make more money than they do today in a few years. Another 33.1% expect to make the same, while 5.2% say they will likely make less money in the future.

“Our research reminded us that most workers want certainty more than making more money, more than doing work they feel is important and meaningful,” the report states.
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby The Romulan Republic » 2017-05-18 08:44pm

This is the America Republican hatred and greed have built, and which Democratic cowardice has permitted.
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby Gandalf » 2017-05-18 08:52pm

Isn't this the glorious capitalist society for which the US fought the Cold War?
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby The Romulan Republic » 2017-05-18 08:56pm

Gandalf wrote:Isn't this the glorious capitalist society for which the US fought the Cold War?


Well, its the society for which Republicans fought the Cold War, maybe (or at least Republicans from Reagan onwards). Not all of us view the world in binary options of "Unrestrained capitalism, fuck the poor" or "full-blown Communism".
"Our progress in degeneracy appears to me to be pretty rapid. As a nation, we began by declaring that "all men are created equal." We now practically read it "all men are created equal, except negroes" When the Know-Nothings get control, it will read "all men are created equal, except negroes, and foreigners, and Catholics." When it comes to this I should prefer emigrating to some country where they make no pretence of loving liberty -- to Russia, for instance, where despotism can be taken pure, and without the base alloy of hypocracy." - Lincoln.

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Re: 28% of Americans Cannot Afford $10 Emergency

Postby mr friendly guy » 2017-05-18 10:40pm

I would be interested to see what these 28% spend their money on. I am not unsympathetic, but I remember an article a few years ago here where the poor person has an account which charges him shit loads of money just to withdraw. Its still pretty shit, but maybe with a bit of adjustments they might be able to improve their financial situation.
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby Gandalf » 2017-05-18 11:05pm

mr friendly guy wrote:I would be interested to see what these 28% spend their money on. I am not unsympathetic, but I remember an article a few years ago here where the poor person has an account which charges him shit loads of money just to withdraw. Its still pretty shit, but maybe with a bit of adjustments they might be able to improve their financial situation.


This article has a breakdown of the top and bottom 20% and their spending habits. Interestingly, the biggest expense is that of housing, taking up some 40% of wages.
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby mr friendly guy » 2017-05-18 11:20pm

Thanks Gandalf. I don't want to be too judgemental, however most Aussie financial guru's books which I read do mention things like saving on smoking and alcohol. As someone who doesn't smoke, and rarely drinks (I mainly drink overseas as part of savouring that nation's cuisine), I can save money there. They could save on average $181 if they stop smoking (I am aware that not everyone can go cold turkey) or $115 in alcoholic beverages according to your article.

That certainly will not cover the medical bills, but if should be able to cover the $10 fund which 28% of Americans apparently would struggle with.

Note, this is not to say income inequality in the US sucks, it does, but since I can't change that, at least I can give advice which might help with the bills.
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby Jub » 2017-05-19 12:05am

mr friendly guy wrote:Thanks Gandalf. I don't want to be too judgemental, however most Aussie financial guru's books which I read do mention things like saving on smoking and alcohol. As someone who doesn't smoke, and rarely drinks (I mainly drink overseas as part of savouring that nation's cuisine), I can save money there. They could save on average $181 if they stop smoking (I am aware that not everyone can go cold turkey) or $115 in alcoholic beverages according to your article.

That certainly will not cover the medical bills, but if should be able to cover the $10 fund which 28% of Americans apparently would struggle with.

Note, this is not to say income inequality in the US sucks, it does, but since I can't change that, at least I can give advice which might help with the bills.


Most people would rather have their little luxuries than a few extra dollars which, rightly or wrongly, they don't feel will improve their situation in the long run. There's also the issue that many people at lower income levels haven't grown up with sound financial advice and likely don't have a firm grasp of budgeting. When you add this to things like banking fees and overdraft which exist to squeeze a few extra dollars out of the poor a few dollars a week on drinks and smokes don't seem like your largest worries.

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Re: 28% of Americans Cannot Afford $10 Emergency

Postby Gandalf » 2017-05-19 01:25am

The Romulan Republic wrote:
Gandalf wrote:Isn't this the glorious capitalist society for which the US fought the Cold War?


Well, its the society for which Republicans fought the Cold War, maybe (or at least Republicans from Reagan onwards). Not all of us view the world in binary options of "Unrestrained capitalism, fuck the poor" or "full-blown Communism".


I'm not following you here.
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby Patroklos » 2017-05-19 02:01am

A "survey" eh. I would like to see the actual survey of questions and their participant demos. The fact that this passes anyone's BS filter is both sad and amusing.

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Re: 28% of Americans Cannot Afford $10 Emergency

Postby Guardsman Bass » 2017-05-19 02:17am

Patroklos wrote:A "survey" eh. I would like to see the actual survey of questions and their participant demos. The fact that this passes anyone's BS filter is both sad and amusing.


The Consumerist link has the pdf file on the survey if you want to look.

I'm a little shocked that the amount was $10, but otherwise it seems about right. The amount of savings that American households have is highly unequal, with something like 70% of US households having less than $1000 saved (although they might have their homes as a form of equity, and be able to draw upon credit cards and such if necessary). It's why the US should really be trying to get Social Security contributions and payouts up to the point where it replaces a higher percentage of income than it does now.
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby Joun_Lord » 2017-05-19 02:31am

mr friendly guy wrote:I would be interested to see what these 28% spend their money on. I am not unsympathetic, but I remember an article a few years ago here where the poor person has an account which charges him shit loads of money just to withdraw. Its still pretty shit, but maybe with a bit of adjustments they might be able to improve their financial situation.


Unfortunately in some areas, too many areas, adjustments are nearly impossible thanks to how some of our Republican assclowns treat poor people. Treating "luxuries" like a washer and dryer or a car as items poor people don't need. Ridiculous restrictions on withdrawals like Kansas tried to pull. Treatment like they are freaking criminals with mandatory drug tests. Discrimination against two parents families that makes in hard to raise children. Ridiculous requirements for parents to go back to work when the infant is 3 months to even a day old that especially negatively effects single parents. Really asinine asset limits as low as $250 dollars. Bans on using welfare money on steaks, certain seafood, tattoos, snack foods, soft drinks, even lingerie.

And it goes without saying that financial institutions and business that "cater" to the poor are extremely predatory. Many times depending on location or education the person might not have any alternatives to overcharging an ATM (machine, that annoys me anytime someone says its like that and anyone who says PIN number) or predatory businesses or even know there are alternatives. Its the same sort of problems people in inner cities or isolated rural areas have with getting proper and financially sound nutrition.

But Republicans help create that environment that is incredibly hostile to the poor.

Now of course part of it is just plain poor planning or stupid spending. Over spending on actual luxury items, addictions, getting things out of their price range on credit, and so on. This isn't exactly something that is just limited to poor people though even if its does bite them in ass far harder then someone of the middle class. It does help keep some, some, poor people in poverty even if all the other hardships and restrictions were lifted but by no means are most people in poverty, sometimes poverty so bad its inhumane, because they want their tobacco fix.

Its my understanding that some countries will actually have programs for people on public assistance to help them manage money and even get treatment for addiction. If true shows you just how shitty some American't poor got it.

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Re: 28% of Americans Cannot Afford $10 Emergency

Postby Patroklos » 2017-05-19 02:58am

Guardsman Bass wrote:The Consumerist link has the pdf file on the survey if you want to look.


The PDF does not have the survey questions or demos. There were some other links but I consider the fact that this information is missing from their PR product an indication no further effort on my part is warranted.

For instance their summary made it clear no substitution was considered, ie faced with an unexpected expense most of us would modify our behavior, including ongoing frivolous consumer behavior, to address a this new pressing issue. Even rich people generally have their money accounted for requiring this same reassessment. Even someone like me with a 50% savings rate doesn't tap into savings when something like this happens. One less pack of cigarettes, skipping a morning latte, bnot going to the movies that weekend, buying a cheaper pair of pants that weekend than otherwise, or skipping your second trip to Disney World this year, etc. Absent the survey questions if that was your answer you are $10 away from financial ruin according to their analysis.

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Re: 28% of Americans Cannot Afford $10 Emergency

Postby K. A. Pital » 2017-05-19 03:02am

Guardsman Bass wrote:
Patroklos wrote:A "survey" eh. I would like to see the actual survey of questions and their participant demos. The fact that this passes anyone's BS filter is both sad and amusing.


The Consumerist link has the pdf file on the survey if you want to look.

I'm a little shocked that the amount was $10, but otherwise it seems about right. The amount of savings that American households have is highly unequal, with something like 70% of US households having less than $1000 saved (although they might have their homes as a form of equity, and be able to draw upon credit cards and such if necessary). It's why the US should really be trying to get Social Security contributions and payouts up to the point where it replaces a higher percentage of income than it does now.

Wait lol what, less than 1000 bucks? I mean... I had more savings when I was in the Third World. :lol:

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Re: 28% of Americans Cannot Afford $10 Emergency

Postby The Romulan Republic » 2017-05-19 03:21am

Gandalf wrote:
The Romulan Republic wrote:
Gandalf wrote:Isn't this the glorious capitalist society for which the US fought the Cold War?


Well, its the society for which Republicans fought the Cold War, maybe (or at least Republicans from Reagan onwards). Not all of us view the world in binary options of "Unrestrained capitalism, fuck the poor" or "full-blown Communism".


I'm not following you here.


My point is that not all Americans, even those who supported the Cold War and opposed Communism, had the same reasons for doing so, or would have had this sort of absolutely unfettered capitalism in mind. No holds barred corporate domination and concentration of wealth in the hands of the few at the expense of the many is primarily a pet project of the Republican Party (though some blame can certainly be found on the part of Democrats for being too often spineless compromisers who enabled this agenda).
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby K. A. Pital » 2017-05-19 03:24am

The US has not only destroyed communism, but also social democracy (Reagan and his witch friend).
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby The Romulan Republic » 2017-05-19 06:39am

The Cold War conservatives tried, but I'm cautiously optimistic about a resurgence, especially once the Trumpian Right crashes and burns and people are still looking for an alternative to the Centre establishment.
"Our progress in degeneracy appears to me to be pretty rapid. As a nation, we began by declaring that "all men are created equal." We now practically read it "all men are created equal, except negroes" When the Know-Nothings get control, it will read "all men are created equal, except negroes, and foreigners, and Catholics." When it comes to this I should prefer emigrating to some country where they make no pretence of loving liberty -- to Russia, for instance, where despotism can be taken pure, and without the base alloy of hypocracy." - Lincoln.

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Re: 28% of Americans Cannot Afford $10 Emergency

Postby Simon_Jester » 2017-05-19 08:48am

Basically, the specific result is surprising, but the general result is unsurprising.

28% of American citizens will be unable to scrape up X dollars in an emergency. If asked to predict what X would be, I would have said "more than ten, but less than a hundred." You have to be very hard up or very ill-advised to not keep at least ten dollars available. Conversely, there ARE people that hard-up or ill-advised... but if asked to predict how many, I'd have said something like "take the number of homeless people in America and multiply by a factor of about two, three, MAYBE as much as five." That wouldn't take us above 10%.

The survey may well be exaggerating the problem, either because it targets demographics that are unusually likely to be flat broke, or because the survey questions lead people to underestimate how much money they have available in an emergency.

That said, there is a very important result here that should not be denied:

Huge numbers of Americans exist, who have utterly negligible savings, and who are one minor accident away from having their finances spiral entirely out of control. As a direct consequence, many Americans DO suffer these spirals every year, causing tremendous grief and harm for the nation as a whole.
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby K. A. Pital » 2017-05-19 09:37am

The problem is not that Americans have neglible savings, the problem is that also they spread this culture to many other nations - as the spearhead of global capitalism.

Capitalism starts breaking if people don't spend more, so a healthy personal savings rate actually means lower profits and tighter markets (or even contracting markets, worst case) for overall capitalism.

Therefore the shout of CONSUME loud over the mountains in developed nations,US included.
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby mr friendly guy » 2017-05-19 11:43am

I thought the US had a negative savings rate. So for every dollar earned, they spend more than that. So I guess with that its not surprising that a lot would not even have $1000. That being said, its quite easy to structure your finances in such a way to have savings even if you have a home loan. For example have a line of credit offset account and borrow against the asset's equity.

Another thing I like to add, if an American still owed say $100 000 on a property, does that mean that person has less than $1000 savings? Because it would be quite understandable how so many might have less than than $1000, if they don't count the value of the property as "savings," because a lot of Americans may have mortgages.
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby Simon_Jester » 2017-05-19 11:54am

The survey strongly implies that they are asking, not about net worth, but about liquid assets. Even if you have negative net worth due to debt, you may still have savings and liquid assets available to pay for things in an emergency. The question is, in effect: How much money do you have on hand to pay for immediate, urgent needs that arise unexpectedly?

This is part of why the exact wording matters. Does it count if you are able to pay the $100 emergency cost with a credit card, confident of being able to pay your credit card debt at the end of the month, for instance?
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby General Zod » 2017-05-19 12:19pm

The current American system is designed to fuck over the poor. In the long run they wind up spending a lot more money on cheap junk that you have to constantly replace instead of a handful of really nice items that they'll never be able to save up the cash for when it's something you need right away.
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby Crazedwraith » 2017-05-19 01:03pm

General Zod wrote:The current American system is designed to fuck over the poor. In the long run they wind up spending a lot more money on cheap junk that you have to constantly replace instead of a handful of really nice items that they'll never be able to save up the cash for when it's something you need right away.


aka The Sam Vimes' "Boots" Theory of socioeconomic unfairness.
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Re: 28% of Americans Cannot Afford $10 Emergency

Postby Broomstick » 2017-05-19 01:15pm

I feel my situation is somewhat pertinent to the topic.

I am no longer "under the poverty line" for the US (in part because my husband died, leaving me half the number of people to support on one income) but I'm not middle class. I would come under "working poor" for most purposes. I make just under $10/hour which is not lavish by any means.

On the other hand, I just bought a new set of tires and a front end alignment for my car. Yes, I did put it on my credit card, but that was planned to keep my credit rating up (if you don't use your credit it decays, so a couple times a year I buy something on credit so if ever I truly do need to really borrow I will be able to do so at a better interest rate), truth is I have the money for it in the bank and the credit card will be paid off in full as soon as I get the bill. And I still have money in savings.

Now, about seven years ago I was pretty damn destitute but I crawled out of that.

I look around at some of my co-workers, though, and they constantly have money woes.

Some of it is "substance luxuries". I mean, I like my alcohol, too, but when I was rock-bottom financially I just quit drinking entirely. For that matter, when I was flying airplanes I was maybe having a drink just a couple times a year because I wanted to spend my money on flying and aviation and alcohol are a bad mix. I don't smoke - holy crap, tobacco is expensive! And I don't do weed, which is still illegal in my state and not cheap even where it is legal. Hell, I'll even downsize my daily diet, eating less meat and sticking to what's on sale. Some people just won't do this. And don't get me started on lottery tickets - yes, I've occasionally bought such tickets myself, but it's rare and when I have the money to spend a buck or two on frivolous perks. At work there are people who spend $50-100/week on them, which is thousands of dollars a year.

Some of it ties into the Sam Vimes Theory of Economic Injustice (link in signature) - they buy cheap rather than quality. When I mentioned at work that I needed new car tires (this being rather obvious what with having a flat in the parking lot) a lot of folks started telling me where to get a set of used, refurbished tires. Yeah, sure, maybe half or 1/3 the price of new but you know what? I got new tires which will have a longer life AND came with a 65,000 mile warranty. This is only the third set of tires my car has needed in 15 years - I know people who buy "new" (that is, refurbished) tires every two years, which means in 15 years they go through seven sets and have more problems with leaks and flats. If you're paying half the price of new you're actually paying more over the long haul with that set up than if you buy new when you need them. Likewise, I pay about $200 a pair for my work shoes rather than get $50 shoes like most of my coworkers. Sure, not cheap, but after 8 hours of working on concrete floors I can go home and my feet don't hurt. I'm not spending the "savings" at the podiatrist and I feel a lot better and healthier. Oh, and my shoes do last longer, but that's in part because I'm a cobbler (I also have fixed co-workers shoes for free, because I'm nice like that).

Some of it is just... well, I don't know what to call it. I have coworkers that forgo the life insurance offered as a benefit at work. Granted, it's a low payout (particularly for worker family members) but it's literally only pennies a paycheck. The policy I had on my husband only paid out $5,000, which really isn't much, but it paid for his cremation, and for the time I took off work, and some of the other expenses incurred during the final months of his life, paying to have someone else do my laundry so I could spend more time with him, and the extra gas burned, and ... well, all the little expenses that add up, plus a bit left over (which has largely gone to maintaining the vehicles, but it's a necessary thing to do). Granted, the odds of one's partner or child dying in a given year is (I hope!) low, but in this case it saved me from what would have otherwise been a very serious economic drain on my resources. Ditto for people refusing to purchase even catastrophic health insurance.

So you've got people who won't spend a few pennies a week on insurance, and buy cheap, but then blow the savings (such as they are) on booze, cigs, weed, and so on. Some of this comes from hopelessness - if you don't think you get a better lot than your current one why scrimp, why not enjoy things today? That's part of it - down at the bottom of the socio-economic ladder there's a lot of hopelessness whether or not there should be. Some of it is ignorance. Some of it is blatant misinformation about how to manage life (a classic is "don't spend money going to the dentist since everyone loses their teeth by [arbitrary age] anyway).

And then you have susceptibility to advertising and upselling. Sure, the guy at the tire place offered me various packages more expensive than the one I chose in the end, but I didn't get the rock-bottom one either. I purchased based on past experience and my anticipated future driving. I didn't either cheap out completely (which is usually not a good long term strategy, see Sam Vimes again) but I didn't get the most expensive option either. Too many people think More Money=Better. Only up to a point. You have to know when you can go cheap and when you shouldn't, and when paying more really does get you more value. You can't be 100% correct on these things all the time, but you can improve from where you start in life. And some people are VERY vulnerable to advertising and upselling.

Bottom line, the Powers That Be have NO interest in actually educating poor and middle class people on how to really properly manage their finances because it would cut income for business and the people at the top. That doesn't mean a better educated populace would get so conservative as to crash the economy - I mean, even someone like me does spend money every month, and buy stuff, because I need to eat, somewhere to live, and stuff wears out - but it would cut profits down from present levels. So, unless you are fortunate enough to come from a family that will teach you how to manage finances you will probably keep repeating your parents' mistakes (a few people figure stuff out for themselves, but only a few). Which will tend to keep you poor, or make you poor.
Last edited by Broomstick on 2017-05-19 01:20pm, edited 1 time in total.
A life is like a garden. Perfect moments can be had, but not preserved, except in memory. Leonard Nimoy.

Now I did a job. I got nothing but trouble since I did it, not to mention more than a few unkind words as regard to my character so let me make this abundantly clear. I do the job. And then I get paid.- Malcolm Reynolds, Captain of Serenity, which sums up my feelings regarding the lawsuit discussed here.

If a free society cannot help the many who are poor, it cannot save the few who are rich. - John F. Kennedy

Sam Vimes Theory of Economic Injustice

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Re: 28% of Americans Cannot Afford $10 Emergency

Postby General Zod » 2017-05-19 01:16pm

It's really true though. I've had cheap shoes end up falling apart on me more than if I'd been able to spend more than $150 on them. Anyone who says they don't see the difference has never spent money on high quality shoes. Sometimes you can get cheap shit to do the job that works as well as the more expensive version, but a lot of the time they just need replaced in a few months if not sooner.
"It's you Americans. There's something about nipples you hate. If this were Germany, we'd be romping around naked on the stage here."

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