Optional:
- Do you think rising living costs are the main reason Americans can’t save for emergencies, or is it more about poor financial planning?
- How can the government or financial institutions help Americans build emergency savings more effectively?
- What steps can individuals take to improve their savings habits, and how can employers support them in this?
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“Two in five Americans (42%) don’t have an emergency savings fund. Nearly as many (40%) couldn’t cover a $1,000 emergency expense with cash or savings, though 60% said they’d had an unexpected expense pop up in the past year.”
https://www.usnews.com/banking/articles/2025-financial-wellness-survey
Comments
People can’t save if they don’t have anything left after paying for basic living expenses.
Wealthier people blame lack of saving on "lack of responsibility" but they’re just ignorant. You can’t save if you literally don’t have enough money left to save at the end of the month. Most people who can afford to save do so.
>How can the government or financial institutions help Americans build emergency savings more effectively?
Increase wages.
When I moved to the town I live in currently my rent was $1000. It is now $3,000. My salary has not tripled in that time.
some of it the high cost of living but I’m not convinced that’s all of it. some people just refuse to save money. they look at the number on their paycheck and think that’s how much money they have to spend. they go into debt to buy things they don’t need or more than they need.
People spend too much money. When their income goes up they increase their spending to match.
Assume a family of 3 is getting by with $80k income (the U.S. median income). That means that other families of 3 could get by spending $80k of their income and saving the rest.
But when they start making $90k they don’t save the extra $10, they spend it on things they now feel they need.
Salaries don’t keep up with inflation
Bad spending habits
Really not hard to understand. High cost of living. Houses get bought by institutions. They take out high interest loans to buy them. That high interest is reflected in the rent. Food is somewhat affordable, for now.
Oh and raises in salary haven’t kept up with inflation either. So most people live from paycheck to paycheck
Then you have high medical costs if something happens to you.
And now we have higher tariffs in play, which will increase the price of some things like certain electronics, cars, etc.
42% goes well beyond poverty. My wife and I have some friends that are making double the money we are; yet they go out to eat at a nice restaurant every single day and have to have the latest in everything. I had more savings when I was in poverty than they do now
Everybody has a different story but many people don’t try to even save money. As Dave Ramsey says rice and beans rice and beans beans and rice beans and rice.
You can argue that things aren’t Fair or you can learn to cooperate and be smart. Also savings $5 is the pathway to saving even more money so don’t be afraid to save small amounts
Bad spending habits. People try to keep up with those with more money. They cannot bring themselves to live within their means. They cannot seem to fathom that if they save and invest, doing without for a while to accumulate funds, the returns will allow them the lifestyle they desire and often better.
Salaries don’t keep up. Costs keep increasing, and big ones too – housing, childcare, healthcare, transportation (cars/insurance/maintenance).
It’s expensive here in sneaky ways- and prices keep rising when income does not.
I live with no extra expenses… I make a modest income less than the national average… I cannot afford a car payment, subscription payments,… Any extras, other than food and shelter
The sneaky expenses I mentioned are car and home insurance going up hundreds of dollars every year… Phone bill climbing every year… Etc.… Property tax increase in my neighborhood by hundreds of dollars this year… If you break all of those down to monthly amounts/budget. It leaves me with absolutely nothing at the end of my pay .
Forgive the wonky sentence structure… I’m voice texting this.
Nothing is more expensive than being poor, cheap stuff breaks more quickly and if you cant go without then you have to buy the cheap thing and cant save up for the higher quality version, owning a house is cheaper than renting, cheaper food isn’t as healthy, a cheap microwave will break before a good one, Terry Pratchett described this very well with the Sam Vimes Boots theory of economics
rent and utilities costing $1400 a month on a $23/hr wage is incredibly painful
I’m also prioritizing employer matched and tax favored retirement accounts before a taxable brokerage account, since the federal government and employers often give out nice amounts of free money for contributing to those
plus, my car has needed some expensive repair/preventative work to avoid becoming totally unusable, and that would be a nightmare.
I also have a multiple thousand dollar tax bill due in a few weeks, and the penalty for being late there is a 7+% interest rate and 0.5% per month.
Financial illiteracy. When people are younger they aren’t taught to save, they are encouraged to spend without thinking, buy newest shiny toy, even if you don’t need it, go out every weekend, take an expensive vacation every year, etc.
If you develop bad financial/spending habits when you are young, they are harder to break when you get older.
A lot of people would have $400 or more if they learned to put aside part of their paychecks when they were younger.
I think it’s the use of the credit card. Spend on the card and there is no pain, you don’t realize how much you spend at a time.
Used to be when I first started working I would get $50 out of my check and put the rest in the bank. As I spent, I knew how the cash flow was going, to much of if I had more than I thought I did at the end of the week.
Fast forward until today, Gas: nozzle in and fill the tank, Lunch: Chick fila credit card no idea of the amount, Dinner: steak house meal, drinks & tip, not idea of what I spent today. And the cell phone bills, the cable bill and Little Joey has a field trip ………. uggg USE THE CREDIT CARD cause we cannot do without.
There is not pain when you spend on credit, there is when you spend cash.
Another thing is the younger generation thinks they should have the same as the older generation and have it now, where as when we came along, we realized we had to work and save to be able to get, not today …. I’m 18 and I want the same lifestyle the 55 year old have, vacations, new cars and all the cool stuff.
Here’s something, start looking at how many hours you have to work to pay for something……. IE Chic fila meal deal is $12.00, you worked roughly 1.5 (if you make $12 with taxes, ss, insurance) hours to get that chicken sandwich, where you could have brought a loaf or bread and a pack of bologna $8.00, worked about an hour and fed your self for a week.
81% of Americans dine out once a month. 40% once a week. 70 % have been on a vacation in past year. Crazy amount buy coffee every day. Expensive phones. Expensive streaming. It’s about priorities.
Over spending on electronics definitely is a problem. I see plenty of people who say they are struggling but they drive nice cars and have nice phones. When I was struggling I had the cheapest phone possible, old car, and it was the only time in my life I was skinny.
Cost of living. I was in Spain for a bit and i was utterly shocked at how cheap rent and basic goods were. Wherever someone can squeeze more profit out of something (and anything) they will.
Tuition.
Housing.
Heathcare.
Daycare.
Elder Care.
These things are wiping out middle class incomes and inheritances, with costs ballooning due to lots of companies taking a cut. The actual workers don’t get paid much. But the prices keep skyrocketing because there is no straight path from customer to provider. Parents are not allowed to pay teachers directly. Patients do not pay nurses or doctors. There is a labyrinth of middle management that takes many cuts, and there are accountability sinks so customers cannot complain to managers.
People who earn a very low income cannot keep up, and are easily wiped out financially by one or two emergencies. They cannot save. They have nothing left over.
People have a lot of bullshit spending they don’t temporarily sacrifice. Also, instead of saving up cash for an emergency fund, they use credit cards which just amplify the problem.
Probably, it is the easy availability of credit. l know I’d cope with an unexpected bill via my credit card. I can pay it off when the bill comes, but it’s my first move. And my son is on my card, so I may have him handle it for me.
If they saved up $400, it would be quite discouraging when they had to spend it all.
My rent is 2x what it was just 5 years ago.
My pay is 1.2x what it was 5 years ago.
This isn’t to mention any other mandatory expense – groceries, utilities, travel, and more.
There’s a number of factors outside of folks’ control, but it’s undeniable that people today spend like congress. I don’t know the numbers on it, but I’d have to bet it’s more than half of americans who do not understand how compound interest works.
Two main issues.
The working poor, not being paid a living wage. These are the people that work full time at jobs that you likely see everywhere around you whose salaries are not enough to cover basic rent, utilities costs, food, insurance and new clothes every 4-5 years. Medical office front office and billing staff, fast food workers, lower tier construction workers, daycare providers and teachers, retail and entertainment workers, baristas, basic office staff, etc. Maybe they have a credit card for an emergency but they try not to use it because they really cannot afford to make an extra monthly payment and also keep eating lunch and they cut out breakfast years ago. If they have no credit then they desperately call around to good friends and family. If they also have no money they desperately look around for what they have that they can sell or try to find odd jobs they can do for cash or try to find a second job.
The working middle class and upper class that not only receive a decent to high salary but also have extensive credit available to them. These are the people that earn $150,000+ and also have another $150,000+ available on various credit cards. In their minds they view that available credit as cash or actual funds. They are bad with money and feel richer than they are because $150,000 is a lot and it’s really $300,000 because that credit is cash in their mind. They contribute to retirement fund and play around with the stock market.They heard about a hot (maybe risky) stock and just had to get it. They used their credit card, they’ll just pay it off later. They have huge revolving debt and monthly payments. Student loans, huge car payment, maybe 2, huge car insurance, multiple credit card payments, the cost of all their state of the art devices and appliances, they don’t know how to cook and eat out all the time, take trips, and never tell themselves "no" to anything. They not only run out of cash every month they play the transferring credit card balances game and tell themselves it’s smart. They don’t actually have the money for an emergency but they can always contact all their credit cards and ask for another limit increase. But they don’t actually have access to the money if they urgently needed it.
If either of these types of people gets hit by a hit and run driver while crossing the street and can’t work for awhile they’re ruined.
That statistic is wrong.
The total responses add up to 143%.
https://www.cato.org/blog/it-true-40-americans-cant-handle-400-emergency-expense-0
A relevant and somewhat famous analogy from one of my favorite book series:
"The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. … A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. … But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while a poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet. This was the Captain Samuel Vimes ‘Boots’ theory of socio-economic unfairness."
People try to live above their level and look cool and have bad habits that don’t help their situation. That’s pretty much everything that’s wrong .
There is a thing called "The Paradox of Thrift" that some people who are responding here don’t seem to comprehend.
Say that all those young people with their avocado toast and mimosa brunches start not buying those things. They start saving their money! Well, that is good. But soon, all those little cafes and restaurants start not making money. They start laying off workers. And what do those laid-off workers do? Well, it turns out our young people who started being thrifty were making their money by examining the teeth or changing the oil of all those now unemployed service workers. Suddenly no one is doing that, and they start getting laid off…
The Paradox of Thrift is not a new concept. Yes, one person can save money by not purchasing things, but if everyone starts doing that, everyone loses out.
Uber Eats!
Tried paying bills and buying groceries lately, hon?
Rent keeps going up. Utilities keep going up. Food keeps going up (while package size keeps decreasing.) Insurance keeps going up (and covering less.) Gas keeps going up. Healthcare costs keep going up.
Hell, even secondhand shit keeps getting more expensive.
Meanwhile, wages have barely budged in DECADES.
And although you CANNOT budget your way out of poverty or near-poverty, poor financial literacy can certainly make it WORSE. So when you add in the fact that kids aren’t being taught financial literacy – because their PARENTS and GRANDPARENTS weren’t taught financial literacy and schools sure as hell don’t cover it – you have a recipe for unmitigated disaster.
And that is 100% by design.
If it’s one or two people, it’s a personal issue.
If it’s society’s at large, there’s a bigger picture at play.
We went from a country that COULD save to one that can’t. In that time income inequality has gone up, labor rights have gone down, unionization rates have gone down, and inflation (re: the prices companies charge) has gone up more than wages.
It isn’t hard to figure out why. It’s just hard to convince the propagandized to believe it. Everyone just feels like a temporarily displaced billionaire. They aren’t. And never will be.
Complacency with lower-mid tier jobs, lack of motivation to move up in their life, poor decisions when young, and excessive spending are the core principles of poverty. People tend to not like taking accountability for their own actions but in most cases long-term poverty is caused by one’s own decisions.
70k/ yr 5800/month
taxes take $1400, rent takes $1600, car + insurance takes $630, health insurance $670, food $250.
Leaves you about $1250/ month to save assuming you have no other debt, so basically one random life event or a kid and someone making a supposedly decent salary is f.
Unexpected things can really drain your bank accounts. Car repairs, home repairs, medical bills, etc.
Bullet 2 – “How can the government or financial institutions help Americans…”
Ha! For starters, both could stop actively trying to fuck us.
Every economic system in a capitalist economy is designed to take as much as possible for what they’re offering. Things have gone from "supply and demand" to "if you need it, I’ll take your firstborn son." Obviously, the bottom blocks of the pyramid are going to bear the most weight.
When you work your ass off all week, take care of kids and home you want to relax and enjoy yourself, go out to eat $100, movies, $60, a few drinks $75. And so on
increased cost of living mixed with not being willing to struggle in order to save.
yes rent is expensive insurance cars etc but at the same time the majority of people who are in poverty situations dont live off top ramen
and then theres those predatory places that offer temporary relief which makes people feel good short term but then they get taken advantage of later, i recently payed off my MIL payday loan debt "Payday loans typically carry extremely high interest rates, often expressed as an Annual Percentage Rate (APR) of 391% or higher, due to the short repayment terms and fees charged" thats fucking insane
and then theres the insane interest rates on other things like credit cards, like common banks give us 5% instead of 30% if your credits low you get higher interest due to risk but then it keeps you in debt
my grandma has been living off 400$ a month for years, beans and rice, living with friends (most people dont have that opportunity) no car (no need for one) state medical but most people wouldnt be capable of living off beans and rice theyd go out and open a credit card or take out a loan which would put them further into debt.
so its a mix of shitty business and peoples unwillingness to put aside their present happiness for future success
Theft and greed. Every dollar I have to pay out, the person/entity I am paying is straight up stealing a percentage of said payment.
I realized that I got a raise this time last year. I’m due for the next yearly increase in like a month. It’s the same job. So let’s compare:
My car has not changed in that time
My living situation has not changed
The number of credit cards I own has not changed; in fact I even got rid of one
Yet for the last two months I haven’t been able to afford my car payment or my credit card payments. So my guess is it’s other factors
Because after I pay my bills and buy groceries I am lucky to have $100 left. Sometimes it’s less than that.
It’s primarily how Americans handle their money. Roughly, the same percentage of Americans don’t have a budget as who don’t have any savings. I would argue there is quite a bit of overlap there.
Children.
It’s not nice to say but it’s true. So many people pop out kids when they can’t afford them.
Groceries up
Car prices up
Rent up
Health insurance up
Homeowners insurance up
Utilities up
Services up
Shoes up
Clothes up
Personal hygiene items up
Health costs up
Home prices up
College Tuition up
Wages not increasing to meet all these costs.
These are BASICS
This does not include purchasing anything that gives you an experience such as going to the movies or concerts, traveling, art, hobbies. We keep lowering our standards.
And what about our time spent away from our family, friends, and children.
A dinner out on Friday night or a movie?
What of our quality of life let alone cost.
Glorifying the side gig and the person who takes on a second job.
All of this to say, sure there’s places to cut costs for some but not all. Meanwhile the quality of life goes down. What about rest? What about family time? What about happiness?
Many feel bad they can’t save in a system that is designed to bleed them dry.
We put the ownership on the citizen to save in a system that is designed to keep them working their lives away. And many of us vote in ways that keep it thriving. We are the majority yet we are allowing our on suppression. This is supposed to be a system for the people BY the people but we have given our power a way and now we all carry that cross. Hopefully there’s still time to turn it around.
A great example is groceries. If you’re poor, you can’t afford to bulk buy and save money. You can’t afford the space to get a freezer and freeze your bulk purchases. You can really only afford the garbage food that is full of preservatives and salt. When you rent, it’s hard to save to buy. It’s just a month to month cycle where you pray that nothing goes wrong or you’ll spend the year trying to get your head above water. That was my 20s and it sucked.
I would blame more of the problem on financial planning or rather the lack thereof. As an example, so many people are walking around with full sleeve tattoos. That’s easily a thousand dollars that I’m sure they didn’t save cash until they had the full amount. You do that with a few other categories and you are suddenly in debt and living paycheck to paycheck
Nevermind the other cost of living challenges.
Most people struggle to save money because pay is too low and necessities are expensive.
The rent at my old apartment in Berkely, California in 2010-12, was $1840, rent controlled, then ended up around $1980 by the time we moved. The rent for the same apartment now, but currently owned by some conglomerate (was owned by a couple when we lived there), is $3100. My salary isn’t much higher now than it was then. Why?!?! Basically, double, why??
Outside of America, so many people think Americans are rich, and comparatively they are. But our cost of living is insane. Food, rents/property taxes, education, and so on are insane. I get why people don’t have much money for emergencies. So many things are emergencies now.
because the great depression was almost 100 years ago, and then there was a post war boom.
It costs money to be poor unfortunately
A lot of people are going to say it’s an income issue, it’s not. If you gave everyone in the country a six figure salary the percentage would probably be in the same boat but with slightly nicer stuff. People are just horrible with money.
Because a thousand dollars isn’t not alot of money to have but it is alot of money to owe
It depends on the income and cost of living. There are multiple groups represented. For some of the people in this group, they don’t make enough to live on even though they work full time or more. That’s called the working poor. It’s a disgrace.
There are also Americans who live beyond their means, even though they make enough money, because they have a high consumption lifestyle. There are a lot of Americans who look rich from the outside but are deep in debt because this is a really consumerist society. Some people will spend every cent they ever get (and more in debt) even if it puts them in danger.
The income gap is enormous and wages have not kept up with inflation. There are other contributing factors to low wages, such as the decline of labor unions, outsourcing, automation, and lack of workers bargaining power. Plus, the US minimum wage is woefully deficient and hasn’t kept up with the cost of living.
When wages stagnate and the cost of living keeps increasing, then you end up where we are. When I was a kid only one parent worked and could support a family on those wages. Same with my friends families. Now it really takes both parents to work and even then families just skimp by.
I am willing to bet those 42% have a Netflix subscription
Once upon a time, a man could support his family and buy a house on a shoe salesman’s salary.
I’m part of the 48% who do not live paycheck to paycheck. I retired at 58, paid my home off and to this day I reserve about of my income to savings, yeah, I’ve been fortunate, but retirement took long range planning.
I did get to work at a job I liked which was beneficial to my pay rate increased according to my work output.
I have been paycheck to paycheck but found comfort in having something to fall back on should the occasion arise.
Credit cards, in my opinion are what many people I know lived off of and many months only paid minimum payment.
42% of Americans are either incompetent or slobs
Honestly I think having kids is a big reason people can’t save. It sucks to say it. But I grew up super poor and I’ve worked hard to be able to be where I’m at today. I never had kids but I’ve been in a relationship where we both have income for a long time. We’ve been able to save enough to get us through emergencies.
We do live below our means, but that’s because we were lucky enough to find a nice apartment in a "bad" neighborhood (it’s not bad but don’t let the landlord know!) Neither of us drink coffee. We do get takeout a lot, but nothing crazy. Almost everything we have is secondhand except our bed. Idk. There’s many factors.
New phones, all kinds of cable TV/ streaming services, Starbucks, eating out and buying unnecessary stuff for the most part.
I did. And more besides.
Once. Two and a half years of illness and disability ate every cent I had, and I eventually lost literally everything, my home included.
It can happen to anyone. You included.
I expect a lot of people who have never had an unexpected emergency drain their savings to tell everyone how irresponsible people are with their money. Republicans have destroyed empathy in America. Government could help by fixing healthcare like every other country in the world has managed to do but they are paid big money by insurance companies to not do that.
I can’t cover a $4 emergency.
Had to quit working to care for my mother (Parkinson’s) full time. We now live in a single bedroom in my sister’s house on my mother’s social security check.
After paying $500 rent to my brother in law, $195 for car insurance, $150 for 2 cell phones (will be switching from Verizon to Consumer Cellular at $81 per month), $280 for her supplemental health insurance, $140 for a storage unit (she refused to toss her furniture when we moved), she has about $684 left to pay for her meds, gas to get back and forth to her doctors and food for a month.
It doesn’t work. The "American dream" is just that – a dream, a fantasy, propaganda to keep unbridled capitalism in power.
You should really see it from the other side kid
A variable of note is the exposure to financial education early as well as the establishment of good financial habits. You would be surprised at what people don’t know or understand that hurts them in the long run in my opinion.
Our wages are low and everything is expensive compared to other industrialized nations.
Credit card companies will allow just about anyone to borrow money at 20% APR. When you are poor and a need arises or a bill comes due and you haven’t the funds it is incredibly tempting to use the CC. The average debt on CC’s in the US is $6700. If you send them the minimum payment monthly this debt sky rockets fast.
gotta a surplus in money to save first.
Why save when you’ve got a credit card with a $10,000 limit at 20% rate?
I say this in all seriousness as I think this is what people do…because it’s what I’ve done
the ridiculousness of rent is a big factor IMO.
the apartment complex i had my first adult place in, i paid $310/mo for one bedroom, one bath. each unit had a balcony (2nd floor) or enclosed porch (1st floor). all tenants have access to a pool, a laundromat and trash and water was paid.
that same apartment is now almost $1100 dollars and you have to make 2.5 times the rent to be considered. plus application fee.
to their credit, they do allow pets again, whereas shortly after i moved out, they banned pets. pet rent is $45 per pet plus non refundable $150 deposit.
I just spent $4,860 at the dentist last month. I had my credit card paid down to under $500, now… not so much.
I couldn’t find the underlying data from US News, so I will just speak generally. Usually, the question in these surveys is “how would you handle an unexpected expense of $X?”
And then the respondent is given the options like cash, savings, credit card, borrow from a friend or family, etc. If they say “credit card” they get lumped into the category of “can’t afford an $X emergency expense” rather than “opted to pay expense with credit card.” They never ask if you plan to carry the balance for an extended time so these surveys often overestimate the number of people who can’t afford a given expense. The “good” answers are cash or savings. The “bad” answers are everything else. This happens often enough that I assume it is deliberately misleading on the part of the surveyors.
Basic living expenses are 1900 a month for me and my kids. I take home 2200 a month. That leaves 300 for groceries and emergencies (and cc payment) not much play there. I also have physical disability which limits what type of employment I can do
I think it’s a few things as an American based on my experiences growing up in a struggling family and living abroad;
These are just a few things as a guy who’s successful now, but grew up poor, lived in other countries, and has a multi national family. My family and friend get on my wife and I about living WELL beneath our means; but we can save for us and our kids, and could easily afford our lifestyle with one income.
Yikes.
Between 2013 and 2019, the US personal savings rate was about 7 percent, per federal reserve data. In 2020 and 2021, it was 12 to 20 percent and even over 30 percent for a short time. After that, it plummeted to 5 percent.
What this tells me is that, if people are conscientious about needing to save for an uncertain future, and temptation is removed thanks to quarantine protocols, then people can save and save a considerable amount.
I’m not arguing that austerity measures should be mandated. I’m just trying to go against the average sentiment here that people are impelled to not save.
I’ll just mention that even without a claim my car insurance has nearly tripled in the last 18 months..
Inflation outpaces wages by a significant amount
Most people are financially illiterate
5 years ago, I made $18 an hour and my house was $1600 a month.
Now, I make $18 an hour and my house is $2700 a month.
Studies and statistics like this have been around for well over a decade now. Prices have continued to go up faster than wages since then. Frankly, I’m surprised the percentage isn’t higher.
Put differently, if nearly half of a country is struggling, by definition, it isn’t a personal issue. There are clearly educational, economic, and political issues at play for so many people to be affected.
I grew up on never pay more than 25% on housing. By the time I got old enough to try that, it was already long gone.
70 years ago a high-school educated man could get a job that payed enough for a house, car, wife and couple of kids. College was affordable with a part time job.
Productivity has risen, GDP has risen, housing, college, and healthcare has skyrocketed, but salaries have not. That extra money has gone into the hands of the top 1%.
There’s always going to be people who fuck up with money, the different is there’s no cushion or room for error now.
The cost of living, housing in particular, is rising faster than wages. Taxes are regressive, the less income you have the more tax you pay. Top earners pay nothing.
In America we pay more for healthcare and have worse outcomes than most other countries. Mandatory insurance, car and home, are designed by politicians who take large amounts from those industries.
It is very difficult to save money when working an average job. It is not a personal issue, the system is rigged against those with the least influence.
I work with people in poverty and help them budget. I see it month after month, the littlest thing can sink a household living on the edge. It is just too hard to save when you barely make enough to get by.
Along with the other valid answers, it is also worth noting that many Americans, even wealthy ones, are shit at budgeting. Credit card debt is at historic highs because many are unwilling / unsure how to budget.
Most people are financially illiterate and don’t know how to stick to a monthly budget. Just like your physical health (eating right and exercising) your financial health requires discipline.
42 percent? I don’t believe that, how did they figure that out?
Mostly a combo of poor financial planning and a lack of discipline, but inflation is a contributing factor–and it has been a significant one for the past several years.
"Live below your means and pay yourself first." This very simple concept is not easy or fun to do, yet it’s the key to building and maintaining wealth over time.
The system here in America is built to keep poor people poor. So in most cases, there’s nothing you can do except maybe get lucky with the right connections or opportunities.
That being said, having low intelligence and/or impulsive habits only makes the situation worse. Cause if you’re stupid, you fall for a lot of scams and don’t learn from it. If you’re impulsive, you buy a ton of random shit and probably have an addiction or two that also drains your wallet.
But rich people can also be stupid and impulsive. They just got lucky or were born rich. Ultimately, it’s by design that American capitalism keeps us poor.
BECAUSE SHIT IS EXPENSIVE BRO
Poor financial discipline likely a factor but can’t be the main one. You see plenty cases where a poor person buying expensive phones/cars, daily Starbucks, doordash etc. But main reason may be systemic.
As for financial discipline, Americans can learn a thing or two from Chinese and Indians who seem to do great with savings and living below means.
Lots of people are just plain stupid, especially when it comes to money. I’d bet at least half of those who claim to be "pay check to pay heck" have all sorts of debt on toys they don’t need.
Getting divorced- so going from two high earners to one and still maintaining the house, coupled with like a free falling economy, which included doubling utility rates has made me tired. So tired. And broke.
The rent is too damn high.
And they don’t make that much.
One big issue is things aren’t built to last anymore. People are having to replace things more frequently, reducing the amount of money they could save.
Another problem is having to have a perpetual subscription for EVERYTHING. Like what the fuck? How did we get to this?
A steady job doesn’t mean shit if the pay is too low.
The premise is basically a lie. Notice how the number of people who can’t pay $1000 from savings is less than the number of people who don’t have a savings fund at all?
These studies typically define savings as money in a bank savings account. That type of account is not preferred anymore and most people do not have one. Other studies claim that anybody who prefers to put expenses on a credit card must be in dire straits, which is also not correct.
Because your credit card or a HELOC can act as emergency savings. I’m not saying it’s best practices…
My kids struggle to pay their bills, I help them.
Uhhh…..try housing costs, to begin. If that’s not the problem then it is consumptivitis, that is the inability to refrain from spending money one doesn’t have. Eating out is often a big contributor to this. Add clothes and cars beyond one’s means and there you have it. But for many it’s housing that digs the hole.
Okay, so I figured it out. Tl;dr at bottom.
The article gave little information on who was surveyed, just how many and who conducted the survey. So I tried to discern the legitimacy of "purespectrum", the company that completed said survey. I found out it apparently is decent enough.
So how do they collect their data? Online surveys. Here’s where the data gets COMPLETELY FUCKED for this survey. These are paid surveys. The only people spending the time to make a couple bucks filling out surveys are obviously not going to have a bunch of money in savings.
The moral is, this data is completely worthless.
However, I am biased. I went looking to prove the survey was incorrect, as those numbers sound wrong to me. So, it is possible confirmation bias entirely skewed my findings as well. Do what you will with that information.
Tl;dr: Respondents to the survey are paid, so they only asked people who complete online surveys for money, how much money they have.
The working class is being slaughtered by class warfare from above. Their real wages are dwindling by the hour
Citizens United. Minimum wage not keeping up with inflation over decades. The algorithm the landlords used to formulate higher rents illegally. The private equity firms buying up our farmlands. Interest rates not going down the way they needed to. The wealthy don’t pay their fair share and squeeze the working class more and more.
It’s because people aren’t making living wages.
Either they need to make more or things need to cost less.
All it takes is one (1) emergency to wipe out one’s emergency funds. We all know, when it rains it pours.
I can’t answer for all Americans, but the people I know that you described, they are terrible money managers. They splurge on “wants”when they should be saving toward future “needs”.
Disclaimer: this is from an european point of view, i am just pointing out a few seemignly common financial things in america that don’t really make sense to me.
Buying cars that you cannot afford: aka buying a brand new car with a ten year payment plan and then selling the car few years later, or even buying multiple cars at the same time with this method.
Credit card obsession. I think this is quite self explanatory. Basically just the common use of credit cards instead of debit cards where you instantly know how much you have spent instead of pushing the paying into the future by thinking "i can pay it from the next paycheck instead".
Both of these in my opinion promote a sort of a natural "it’s a future me problem" thinking, which can cause poor finances when all the payment plan bills start stacking up.
Edit: i am aware these are not the only things, just a few points that i have noticed
I know it’s called NoStupidQuestions, but this one is low hanging fruit. They don’t get paid a decent wage. People like Musk and Bezos pay themselves massively and stiff their staff. This is in all industries and roles.
When it’s 42% of a population of 350+ million it’s not personal issues, it’s something wrong with a system.