
Survey: 69% of Americans Have Less Than $1,000 in Savings - tomashertus
http://www.forbes.com/sites/niallmccarthy/2016/09/23/survey-69-of-americans-have-less-than-1000-in-savings-infographic/#2761220391ee
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shados
That is scary, but not surprising.

Even if you gave someone without savings 600 bucks right now, chances are
they'd turn around and buy a new iphone with it instead of saving it. And then
you have all the people who are in a situation where they can't save if they
wanted to, be it because of poor decisions or bad circumstances out of their
control.

And honestly, even if you CAN save...I'm very lucky and quite privileged, and
was looking at my 401k recently. It's doing quite well (yay!), but if I
extrapolate to retirement, I'm not even close to what I'll need to have a
comfy retirement. The majority of people are just flat out screwed.

How to solve this...who knows. Its a hard problem.

~~~
eli
How did you arrive at the conclusion that most poor people would waste $600 on
things they don't really need?

~~~
bisby
If more than the top 30% of people have iphones (or equally expensive phones),
then some percentage of people did exactly that.

There is going to be a huge intersection of people with less than 1000$ in
savings, but have an iPhone.

Perhaps that's WHY they have so little savings? I knew a family who filed for
bankruptcy while having 3 macbooks they used for MS Word and Facebook. Bad
spending habits and the need to keep up with the Jones are both issues.

Not all people are poor because they "waste" money, but when you consider that
a lot of luxuries are considered "necessities", you have to question things.

~~~
pdkl95
> ... but when you consider that a lot of luxuries are considered
> "necessities", you have to question things.

Sometimes "luxuries" _are_ necessities, in less obvious ways. For example, it
may be very difficult to get certain types of jobs unless you display the
right status symbols[1].

[1] [https://tressiemc.com/2013/10/29/the-logic-of-stupid-poor-
pe...](https://tressiemc.com/2013/10/29/the-logic-of-stupid-poor-people/)

~~~
teslabox
That's a nice site... The author has some really good points about for-profit
colleges too.

    
    
      The $20 Principle
      
      I have written before about how $20 can change a 
      student’s life.
    
      The $20 is slightly euphemistic but not entirely so.
    
      We talk a lot about big money in higher education but I 
      know for a fact that it’s small money that can derail 
      one’s educational ambitions.
    
      I was a student in a doctoral preparation program. I was 
      an older “non-traditional” student. I was independent. I 
      didn’t have children but neither was I still someone’s 
      child. To take advantage of this highly competitive 
      program, I had to submit a $100 reservation fee.
    
      I didn’t have it.
    
      I was $24 short.
    

\-
[https://tressiemc.com/2016/08/30/the-20-principle/](https://tressiemc.com/2016/08/30/the-20-principle/)

------
ghshephard
Given my savings account pays 0.01%, and a 30 day CD from my bank pays .75%,
and the average dividend yield of the S&P 500 ETFs (like blackrock's IVV) net-
of-fees is 2%, is it all surprising that nobody uses Savings Accounts anymore?
Seems like rational behavior to me.

~~~
intopieces
This response comes up every single time this statistic gets posted. I assure
you that your condition is not typical for the 69% mentioned in the statistic
quoted.

"The Fed asked respondents how they would pay for a $400 emergency. The
answer: 47 percent of respondents said that either they would cover the
expense by borrowing or selling something, or they would not be able to come
up with the $400 at all. Four hundred dollars! Who knew?"

[http://www.theatlantic.com/magazine/archive/2016/05/my-
secre...](http://www.theatlantic.com/magazine/archive/2016/05/my-secret-
shame/476415/)

1 in 3 Americans has $0 saved for Retirement, and 56% have less than $10,000

[http://time.com/money/4258451/retirement-savings-
survey/](http://time.com/money/4258451/retirement-savings-survey/)

~~~
gizmo686
I agree with the conclusion, but do not think you can get their just by
looking at how people would pay for a $400 emergency.

For example, in my financial situation, I would borrow to cover an unexpected
$400 expanse. However, that is because I have a prior agreement with my
parents that they would loan me (at 0% interest) to cover unexpected expenses,
so I have no reason to keep a surplus of money fully liquid when it could be
earning better returns elsewhere.

My parents, for their part, base their savings on the assumption that they
would cover unexpected expanses from their line of credit secured against
their house. This, again, is not because they do not have the money to set
aside for emergencies, but because they think that the opportunity cost of
keeping the money liquid outweighs the cost of occasionally paying on credit.
As it happens, they could pay for a $400 emergency out of pocket, but that is
mostly because they are too rich to micromanage at the $400 dollar level.

With respect to retirement savings, I do not think that stat is as bad as it
first appears (although I do think the typical American is underrepresented
for retirement). The basic financial story is:

1) take on debt for big, lifetime purchases (education and a house).

2) Pay of debt

3) Accumulate wealth

4) Retire and live off of accumulated wealth

Given this, it is not unreasonable that young people would have no money set
aside for retirement, because it might be more efficient to use that money to
pay off debt.

~~~
brianwawok
I don't care what kind of plan B you have, having $500 or $1000 cash seems
like common sense. What is the opportunity cost of $1000 not in the stock
market... $50 a year?

~~~
rdm42116
Yes, that comment was ridiculously out of touch.

That's fantastic you have a safety net with your parents, with amazing credit,
that can borrow at good rates, at any time.

What about the people paying double digit interest rates to get a crappy used
car? People who can't borrow money because of no credit, without their parents
to cover extreme interest rates?

It's great that some people have the luxury to somehow not have an emergency
fund, but a huge portion of the population is unable to do that. The last
thing they care about is return on investment in savings-they need money to
get food next week.

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iambateman
Another poster asked this, but does this mean this group has less than $1000
in liquid assets, or less than $1000 in a "savings account"?

Also it would be helpful to see how this has changed over time.

~~~
rasz_pl
What assets? That Ram on the driveway loaded with a bike/jetski/boat on a
trailer? 50' TV? iphones all around? its all on lease 40 days away from being
repo'd.

~~~
sosborn
My house is an asset yet I owe quite a bit of money on it. Which way does it
tilt the balance sheet for this survey?

~~~
shorttime
Worth - mortgage principle = savings.

~~~
metaphor
I can think of one reasonable instance in which home equity may have
equivalent liquidity as a savings account: when filing for bankruptcy.

------
qwrusz
Obviously "savings account" and "in savings" are not the same thing. This
survey and article don't seem professional - basically this is clickbait or
they are clueless.

But the main issue still is real. Regardless of "savings account" status,
other studies show ~half of Americans are financially insecure today. Should
an emergency expense of $2000 come up they don't have it.

The problem is getting worse as baby boomers retire. If you include
underfunded retirement savings in the group at risk then the vast, vast
majority of Americans are in a financially insecure position.

Pew Trusts did a study as well: "One in 3 American families reports having no
savings at all, including 1 in 10 of those with incomes of more than $100,000
a year."

"41 percent did not have enough liquid savings to cover the $2,000 cost of the
typical household’s most expensive financial shock."

Link to Pew report [pdf]
[http://www.pewtrusts.org/~/media/assets/2015/11/emergencysav...](http://www.pewtrusts.org/~/media/assets/2015/11/emergencysavingsreportnov2015.pdf)

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rsmsky1
I think this is somewhat deceiving. I'm pretty most Americans have more than
$1,000 in savings, maybe in their checking accounts, their stocks, etc.

~~~
Johnny555
Is it deceiving?

"The Fed asked respondents how they would pay for a $400 emergency. The
answer: 47 percent of respondents said that either they would cover the
expense by borrowing or selling something, or they would not be able to come
up with the $400 at all."

[http://www.theatlantic.com/magazine/archive/2016/05/my-
secre...](http://www.theatlantic.com/magazine/archive/2016/05/my-secret-
shame/476415/)

~~~
pharrlax
Do stocks count as "something"?

~~~
eli
Do many people invested heavily in the stock market not also have $400 in cash
or equivalent?

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fred_is_fred
The article specifically says savings accounts. Only a damn fool would keep
money there long term. My checking account earns 5x the interest and the money
market account at my brokerage is about the same.

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lithos
Wow I was expecting a full blown article, and instead found something smaller
than a write in opinion piece.

Even worse the source document has far more interesting data on it, sorting by
gender/age/location. Even if it is a self serving study by a service that is
in the business of selling savings accounts.

The data is pretty scary though. After finally getting a 6 month runway of
living expenses I can't imagine going back. Even having a month or two runway
makes it so easy to not make unreasonable mistakes.

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mtmail
Similar study from the UK "Millions have less than £100 in savings"
[http://www.bbc.com/news/business-37504449](http://www.bbc.com/news/business-37504449)

~~~
shirro
I think it would be similar in lots of countries. Living in Australia, our
household priority is to pay down debt. I don't understand the value of
holding lots of cash while you have a mortgage. If cash is needed we can
redraw.

Ofcourse public health care is free here and education is still affordable and
there is a social security safety net and compulsory superannuation payments.
So it isn't like a family sickness will see us lose our home and sleeping
under a bridge.

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namlem
This is a stupid article. I don't even have a savings account. WTF is even the
point when the interest is negligible? Money I need access to stays in my
checking account, savings go in Vanguard.

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shorttime
Without defining "savings" this article doesn't really say anything at all.
Savings can be assumed as many things.

