
62% of Americans Have Under $1,000 in Savings, Survey Finds - gregd
http://www.gobankingrates.com/savings-account/62-percent-americans-under-1000-savings-survey-finds/
======
patio11
There's a conversation to be had about many Americans living in precarious
financial situations, but the reason why most Americans don't currently view
their savings _accounts_ as priorities is because in the current interest rate
environment savings accounts and CDs are products with vanishingly little to
recommend them.

The APY my bank offers is _one basis point_. That's $1 per year for every $10k
held in the account. You can imagine that if I suddenly found $100k burning a
hole in my pocket I would not immediately think "Sweet! All I have to do is
stuff that it the bank for a year and then I can almost afford an entire movie
ticket!"

~~~
Spooky23
If you need liquid savings, cash is king.

I opened a savings account with my son a few weeks ago. In my day, those
accounts paid 3-7%. There was a story of compounding interest to tell. Now, I
feel like I'm teaching my kid to be a sucker.

~~~
hugh4
I think if I ever have a kid I'll let him open a "bank of Dad" account which
pays a decent interest rate just to get him into the habit of investing.

~~~
beambot
Best example ever: [http://www.mrmoneymustache.com/2015/05/20/what-im-
teaching-m...](http://www.mrmoneymustache.com/2015/05/20/what-im-teaching-my-
son-about-money/)

~~~
branchless
MMM has at least two rental properties and is a phoney.

He can teach his kid to be a rentier by borrowing long and taking advantage of
the separation between the value of labour vs assets when fiat money is over-
issued by private banks.

And how to run a web-site about being frugal whilst deriving rental income
from three families who cannot save because they are busy working hard to keep
MMM pumping out half-truths on the internet.

Can we all take up three times as many houses as we need and live off the
rental income siphoned off from the labour of others? No.

~~~
beambot
How does owning rental properties invalidate his message of "avoid rampant,
unnecessary consumerism"? Certainly, not everyone can derive their retirement
income from rentals (the numbers don't work out). But lucky for you: There are
other forms of investment.

BTW: I currently rent. It's the financially prudent thing to do in my
situation, and I certainly don't begrudge my landlords for it -- they're the
ones locked into an illiquid, overvalued asset.

~~~
Avshalom
If you work at say Target 40 hours a week, squeak in the occasional overtime
and work on every holiday you take home about 12-15k a year after taxes that's
about half of what MMM gets from rent.

MMM hasn't come within ten grand of frugality in his life.

It doesn't strictly invalidate his message but it's a grain of salt that
should not be forgotten.

~~~
beambot
I get that he earns a lot from rent. But I still don't understand the
animosity. Would you be equally up in arms if he just invested in municipal
bonds -- the bonds that pay for your parks, roads, fire stations, police
upgrades, and schools? There are reasonable tax-free bond funds (eg. PMF) that
pay >6% annually.

I've read most of his posts. He harps on things like biking instead of buying
a new car. Or "why spend $150/mo on a cellphone bill when you can use Google
Fi for half that?" Using that latter example, that's a difference of $900/yr
-- or 8% of your Target family's net annual income; enough to make a
downpayment after just a few years.

To be honest: It seems like y'all are taking away the wrong message. The
problems you see are legit, but directing your animosity at a guy providing
free, online insights and advise seems misguided. YMMV.

~~~
Avshalom
The animosity isn't specifically at MMM. People who think "have you tried
spending less" is insight, thats what who we hate. Believe me poor people are
way ahead of you on the spending less money idea.

~~~
hugh4
That advice isn't aimed at people who are genuinely poor, it's aimed at middle
class whiners who earn middle-class money and still complain that they "can't
get ahead" and "will never be able to retire".

MMM has never claimed to be frugal -- indeed, he likes to talk about the
"extravagance" of his $25K pa spend for a family of four.

~~~
Avshalom
>MMM has never claimed to be frugal -- indeed, he likes to talk about the
"extravagance" of his $25K pa spend for a family of four.

And imagine how well that sarcasm goes with those of us who have never seen
25,000.

~~~
hugh4
And if you're in that situation then MMM isn't for you. People in that
situation need a blog on how to earn more money, not one on how to spend less.

------
david927
A lot of people here think this is about you parse "savings". It's not:

 _47% of Americans say they lack the cash to pay a surprise $400 bill_

[http://www.politifact.com/punditfact/statements/2015/jun/09/...](http://www.politifact.com/punditfact/statements/2015/jun/09/hunter-
schwarz/47-say-they-lack-ready-cash-pay-surprise-400-bill/)

~~~
nemo44x
I think the audience on this site is mainly out of touch. When you're making a
fine salary it's easy to forget that most people don't. When you're spending
your time looking up at those above you and positioning to get to their level
(because upward mobility is an option) it's easy to forget to look at the
piles of people below you where it isn't

It's easy to assume throwing $100 around here or there is normal when you're
able to throw $800 on an impulse iPhone without a problem. Many people can't.

I'm probably just as guilty too.

~~~
nommm-nommm
>I think the audience on this site is mainly out of touch

Yep!!

I grew up in an entirely different mindset than the upper middle class office
workers I work with. I often feel like that I can't fit in or relate to them
in many ways because they seem very out of touch with the world outside of
their own upper middle class existence. Even in college they never worried
about bills or living expenses, their parents paid.

It wasn't that long ago (less than a decade) that spending $600 on a car
repair was absolutely unbearable for me. I went through that stress and now it
almost seems surreal that sort of money was such a stress in my life when I
look back on it.

I will never, ever, lose touch with the sort of lifestyle that my income can
provide me (though I prefer to blow $800 on a weekend trip instead of an
iPhone...)

The most interesting thing is that having so much extra money provides so much
more opportunity to earn even more money. The old "You gotta have money to
make money" really is true. I do money making activities outside my day job
that I would never be able to do if I didn't have several thousands of dollar
on hand to float for a month or so. If you are talking about real estate you
need tens of thousands of dollars. The more money you have the easier it is to
obtain more.

------
manigandham
This should be more explicit in saying "Savings Account" and not just savings.

I have plenty of savings yet have 0 savings accounts (since they're
practically useless). A little misleading here when many people just keep
their money in checking or investment/retirement accounts.

~~~
6stringmerc
Well, I think it's relevant to consider that any type of investment vehicle
outside of an insured savings account is subject to risk. Of course there are
varying risk profiles, but in cold, hard terms an insured savings account
(FDIC) is, conceptually, a secure store of funds. No downside risk and access
without penalty to 100% of funds is something I don't think many investment
vehicles can claim.

~~~
kd5bjo
Checking accounts are also insured by the FDIC, and most people wouldn't
include their checking balance when asked about a "savings account"

~~~
hugh4
I probably would, because I'm not sure I see the distinction.

I'd also answer "none of your business" if asked.

~~~
joshuacc
In the US there is a legal distinction between savings accounts and checking
accounts, which governs how many "convenient" transfers can be made to/from
savings accounts, among other things. The question is specifically asking
whether people have money in the legal "savings account" category, not whether
they have savings in any random bank account.

------
abritinthebay
And people wonder why they say Tech is out of touch. Reading the comments here
is a great demonstration.

Examples:

> who uses savings accounts anymore?

> Cash on hand or it's invested in stocks, bonds and my home.

> The truth is you're losing more money by not having any of it generating
> higher potential yields.

> the total net worth of my wife and me is many orders of magnitude greater
> than what our savings account reflects

These kind of statements just show that _the audience here is woefully out of
touch with the average person_.

The average person in the US is unable to absorb a $1000 emergency. The
average person in the US avoids going to the doctor because they can't afford
it. The average person in the US _doesn 't have enough money to justify an
investment account of any kind_.

But we in tech are privileged and goddamnit if we're not mostly (as a group)
utterly blind to it... or worse - in denial that we are (and aggressively
defensive about it).

The median _household_ income in the US is $51,939 the median _individual_
income in the US is $28,567. Note: median, not mean. That is the financial
reality of the average american.

In tech we're used to making 6 figures and then bitching that other people
aren't _trying hard enough_. We quibble over what "in savings" means. We try
our hardest to minimize problems that we ourselves don't experience rather
than work on the very real, very clear, issues at hand. This feels like we
have a maturity and empathy problem as an industry to me...

~~~
Artistry121
This doesn't parse. You just said the median household income is $51,939.
That's a ton of money. I and many spend far less than that.
[http://www.mrmoneymustache.com/2015/01/16/exposed-the-mmm-
fa...](http://www.mrmoneymustache.com/2015/01/16/exposed-the-mmm-
familys-2014-spending/)

Even throwing on a mortgage payment a couple can easily afford this - and this
is a lot of luxury.

~~~
OrwellianChild
Aggressive MMM savings strategies aside, $52k isn't a ton of money... Your
profile says you are in Kansas City, so lets run some numbers really quick...

$52k means take-home (after tax) is about $38.5k.

This site [1] says monthly rent is about $1.4k plus $150 in utilities. One car
payment on modest transportation will be about $200/month and insurance and
gas might cost $200 more.

We're up to about $2k/month in expenses for what is a relatively normal cost
structure. That monthly take-home on $38.5k annually? $3.2k.

We're down to $1.2k remaining cash each month and haven't considered
heathcare, food, student loans, retirement, savings. And there aren't any kids
in this equation yet, which causes another pile of problems if we assume the
1.8/family rate from the CIA Factbook.

These are just ball-park, but then, so is that household income. It is _very_
easy to eat up income without living an extravagant lifestyle full of
smartphones, laptops, and luxury vehicles.

[1] [https://www.expatistan.com/cost-of-living/kansas-
city](https://www.expatistan.com/cost-of-living/kansas-city)

~~~
lmm
$1.4k is way too much for somewhere that you're still driving to work from. I
think a lot of people overestimate the value of a big house. You just end up
filling it with junk.

If you get a smaller house - say $1k/month - suddenly you can afford to live
very comfortably, and save some as well. $52k is absolutely a lot of money; of
course there's always more things to spend it on, and I won't pretend more
money isn't very nice, but $52k really should be plenty. Putting it another
way: if $52k isn't enough to make you happy, $100k probably won't be either.

~~~
OrwellianChild
I appreciate the critique - I'm not from the KC area, so I don't have local
intuition. Seattle rents in the city are about $1.2k to $1.6k for a _single-
bedroom_ apartment, and a 2-bedroom (as would befit a couple or small family)
are north of $2k, so I don't have local context.

Can I ask what you mean by "really should be plenty"? I left out costs which,
in my part of the country, would vastly exceed the remaining $1.2k in our
little exercise. I guess I should have been explicit about this assumption. I
am better off than the average American by far, but even so, student loans
from my grad school (an extravagance, I know) hurt to the tune of $1k/month. I
don't have kids, but feeding/clothing/sheltering them would take a pretty
penny too, nevermind the costs to time, commute, etc.

Any one of the un-accounted-for expenses could vary wildly person to person,
and could easily swallow up all that excess. I'm all for frugality and feel
like folks have a lot to learn in that regard. Still, $52k for a household
doesn't seem to math out without a whole lot of scrimping and luck.

~~~
lmm
I'm not from KC either, so I may be off base there. I do live somewhere with a
higher average salary than nationally though.

Certainly there are places (SF in particular) where you're in a pretty bad
place if you're making the national median, but I think anyone making the
_local_ median in those places is doing all right. The median is by definition
not going to be a good place for keeping up worth the joneses. But if you opt
out of the competitive things and just spend on what you need, I really think
$52k is a pretty good place to be, and if you're struggling at that level (and
aren't tied to a job in an expensive city) you should seriously look at
downsizing your house/car/whatever your biggest expense is, because I have to
wonder where all that money's going.

Of course plenty of people really are struggling - half of the country is on
less than $52k after all. Below about $40k I'd definitely say "it's not you,
it's your income" or something on those lines.

------
brianclements
So many people live paycheck to paycheck that saving is just this intangible
concept that "wealthier" people do. No one they know saves, no one taught them
to save growing up, and even if they tried, they probably couldn't. Cost of
living has outmatched wage growth; it's a mess.

On the personal responsibility side of it though, I'm willing to bet that over
recent decades, another thing that has also inflated is many peoples "minimum
standard of living". I've seen people who, for probably very cathartic
reasons, will make very poor spending choices on food, electronics, gas
guzzling cars and other things instead of plan for items that move their lives
forward.

And the sad part is that everyones minimum standard of living SHOULD be going
up, we all SHOULD be living better then our previous generation. But the
actions of many in the governance tier of our society have chosen otherwise
for us.

~~~
Avshalom
>, and even if they tried, they probably couldn't

For instance near as I can tell it takes like 10 grand to get into an index
fund. Even if that didn't represent _years_ of savings for most families there
are so many things that 10 grand needs to be used for before [[2-5%/y return
on investment over 20-30 year period IF the market doesn't crash shortly
before you need to start drawing on it]] is a compelling proposition

~~~
akeck
You can buy Vangard market index ETFs. VOO is their S&P500 ETF and BND is
their bond ETF. Maintaining a 60/40 split of VOO/BND is hard to beat over long
time frames. Substitute VYM for VOO for more cash flow at the expense of
higher volatility.

------
6stringmerc
My gut feeling is that the population of commenters here may exhibit some
selection bias. As in, leveling criticism that the article doesn't include
"investment vehicles" is a negative may be a valid point in some circles, but
as a profile of the general population in the US, is a valid approach. With
housing having gone through a giant bubble cycle and rents approaching all-
time highs IIRC, there really isn't any extraneous income to invest (well,
_save_ ) with a large portion of the population. I'll refer to the following
chart as relevant to supporting my perspective:

[http://www.zerohedge.com/sites/default/files/images/user5/im...](http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/09/Rich%20vs%20Poor_0.jpg)

~~~
manigandham
How does not including other vehicles help give an accurate picture of
"savings"?

~~~
jellicle
The vast majority of the population is not saying "I have nothing in savings"
because all their money is tied up in yachts and Manhattan real estate; it's
because they have no money.

~~~
6stringmerc
Thank you for that take on it. As a 30 something, I've been "coached" over
time that savings is for liquidity in the case of an unexpected event - loss
of job for X months (cover bills with savings), medical emergency (cover bills
with savings), or potential family development (need to purchase vehice for
teenager). These events are not _supposed_ to be covered by "dipping" into
retirement funds, e.g. IRA or 401k.

The _ideal_ method of financial planning I was taught is to invest for
retirement through financial products which minimize risk and are not liquid
assets, while concurrently saving in a "traditional" account.

------
eimai134
I'll bet a lot of people have money elsewhere. However, I have a lot of
friends who are poor (by that I mean that they qualify for food stamps), and
it's amazing to see the way they spend money. When I was poor I bought the
very cheapest shampoo ($1) and bought generic everything. The poor people I
know now buy name-brand products and buy a ton of Christmas and birthday
presents. My husband and I have savings but we don't do any of these things!

~~~
sleazebreeze
My partner's family lives in government subsidized housing and they get the
full array of benefits including disability and food stamps. His mother buys
new luxury items like purses from Coach regularly with cash from under the
table jobs. They have more TVs, newer smartphones and iPads and lots of other
expensive goods, and yet they have zero savings. I don't understand the
thinking there.

I just hope their retirement plan isn't to live with my partner and I.

~~~
exhilaration
At least in the U.S., putting that cash into savings would make it visible,
putting their government benefits at risk. They probably don't make enough to
survive -- those TV's and smartphones might only add up to a month or two of
rent alone -- so they're trapped.

------
habosa
There is a lot here about the interpretation of "savings account" and I agree
that it is problematic. I have 10x as much in investment/checking as savings.
However I don't think that fixing the semantic issues would change the overall
issue: the distribution of wealth is even more skewed than the distribution of
income. Most of this country would be utterly ruined if they got into a car
crash and owed $10k to medical/repairs. And then there are people like most of
HN (and me) who get paid ~$100k and save 20-60% of it and are not worried
about that situation at all. It's not because we are better people or really
that we deserve anything, we just have the right skills/opportunities at the
right time. We are the few.

I was born into the wealthiest gender of the wealthiest race in the wealthiest
nation and I happen to find working in one of the wealthiest industries to be
not only easy but enjoyable. I have won the lottery. I have no idea what it
would feel like to be at the other end of the spectrum, I just hope I don't
forget how lucky I have been.

~~~
stuxnet79
I applaud you trying to maintain perspective because a lot of people lack it.

------
code4tee
Theres a big difference between "savings" and "cash in a savings account."

Given the current interest rate situation theres essentially no difference
between money in a checking account and money in a savings account, other than
that the checking account likely has a debit card of some sort directly linked
to it. Both are likely earning near 0% or so close to 0% it makes no
difference. Not that long ago CDs were paying >5% so it made sense to put cash
into such instruments. Right now a CD is essentially pointless.

I would agree, though, that too many people have far too little cash on hand
(regardless of where its stored). I often see people that live in a million
dollar home but don't have enough cash in their bank account to pay the cable
bill. These so called "asset rich cash poor" people are playing with fire
since it's often that they banked too much on the appreciation of those assets
to justify the situation they've put themselves in.

People should maintain a healthy chunk of readily accessible liquid assets
which could include non-retirement non-speculative investments and some good
old hard cash too.

------
hwstar
The whole economy in America has no margin of safety and is a house of cards
just waiting to fall down.

The average employee lives paycheck-to-paycheck.

The small business owner is constantly worrying about making payroll, and is
constantly on credit hold with his suppliers.

The large corporations are holding profits offshore and are draining away the
opportunities by offshoring.

The banks and Private Equity are conjuring up ways to rip the small business
owner and common folk off.

------
learning_still
It is worth noting that these statistics never take into account people's
retirement funds. The survey also does not ask how much people have saved, but
rather how much they have in their _Savings Account_. Many people keep all of
their money in a checking account. Hence 1 in 5 people saying they don't even
have a savings account. This is a rather misleading statistic overall. But
yes, most Americans do not save. They have absolutely no education when it
comes to personal finance, and feel absolutely no responsibility to educate
themselves. They honestly think they can figure out their budgets on their
own. This is shown by a lot of other similar statistics as well as many books
on personal finance. The reality is we live in a debt culture. Most people do
not understand why savings is necessary not optional. When shit happens, they
just think, "There's no way I could have prepared for that." But the reality
is that shit always happens. That's the whole purpose of saving.

~~~
brewdad
Here's some interesting info on retirement accounts for those 50-64.

[http://www.economicpolicyresearch.org/guaranteeing-
retiremen...](http://www.economicpolicyresearch.org/guaranteeing-retirement-
income/528-retirement-account-balances-by-income-even-the-highest-earners-
dont-have-enough.html)

In short, very few Americans will be retiring at all, much less comfortably.

------
mikestew
"Savings account"? I have $5 in my savings account to keep in good stead with
the credit union. Despite that, one can rest assured that the total net worth
of my wife and me is many orders of magnitude greater than what our savings
account reflects.

Maybe I'm out of touch, but asking about savings accounts strike as being in
the same vein as asking how much I feed my horse.

~~~
6stringmerc
I'm not criticizing, but would like to point out you may fit the definition of
"asset rich and cash flow poor" and, under certain circumstances, could
essentially be bankrupt due to an inability to access funds. A recent example
would be the entertainer 50 Cent declaring bankruptcy in the context of a
judgment totaling in the millions. Also, based on my experience on Wall Street
(note: not a licensed advisor or broker), I remember when the Auction Rate
Securities market collapsed, and hundreds of millions of dollars in "as good
as cash" (sic) structures were suddenly rendered illiquid. I mention this
simply as context for what _can_ happen in the financial markets in
undesirable scenarios.

~~~
mikestew
Not taken as criticism, and I absolutely know where you're coming from; solid
advice. My mitigation is tight stops, and yes, I know what the downsides of
those can be in a crashing market. The risk/reward for me versus a savings
account at 0.5% is acceptable to me.

Or if you mean it's all tied up in a 401K, yeah, I hear ya. The vast majority
of our funds are in there. The mitigation to _that_ is a goodly amount of cash
(easily get by for a year with no income) in a standard brokerage account that
has a debit card and a checkbook I've got lying around the house somewhere,
under the assumption that something like AAPL should be liquid _enough_ should
we need the cash. But, see above...

~~~
6stringmerc
Very cool! Also, a nice elaboration without getting too granular. I'm hoping
none of these scenarios come to pass...but they aren't called "rainy day
funds" because of sunny outlooks.

------
agentgt
To me savings is liquid cash that you have on hand. It is an emergency buffer
account. Every month (or whenever I get paid) since I have been employed or my
wife has I have had money taken out of our checking account and put into
another account. It doesn't really matter that its savings or checking account
but that I can get immediate access to the account.

When the account has gotten too big we just apply some of the money elsewhere
(which is not really hard).

I understand how the truly impoverished unable to save but I'm sort of
disturbed to read so many here post that they think their 401K/Roth IRA is an
emergency cash account.

I actually once tried to sell stock to get liquid cash. Perhaps it was just
Scottrade sucking but it took a significant amount of time... so much so that
I had to use my emergency buffer (savings account). Its been awhile since I
have tried so maybe things have changed.

~~~
Vraxx
How long is a "significant amount of time"? If it's anything less than a month
a credit card could cover that with 0 interest right?

~~~
agentgt
There is a surprising amount of things that don't take credit cards
particularly emergency house repair. There was another time when I had to put
a down payment right away or else some one else would buy it. I suppose that
is not that much of an emergency but I still think it's good to have a reserve
with auto deposit.

------
tracker1
Every extra cent I've had for the past 5-6 years has gone towards paying off
medical bills from a hospital visit that exceeded my insurance policy's
maximum by about $138k... I now have under $8k left to pay (everyone that
would take sane payment arrangements or reductions has been paid off at this
point). It's been very tough, I emptied my retirement accounts and have handed
over tax returns etc. to pay it all off...

After this coming year, my plan is to start putting 20% of post-tax income
into a Roth IRA.

~~~
jtwaleson
Stories like this make me very happy not to be an ill person in the USA...

------
tcdent
Since this discussion turned into a conversation over semantics and investing,
I'm curious to see if there are any trends in HN readership. I expect some
people won't feel comfortable commenting about this so I created a poll:

What is your NET worth?

[https://news.ycombinator.com/item?id=10355745](https://news.ycombinator.com/item?id=10355745)

------
jsprogrammer
Any given dollar is primarily a representation of someone else's debt. Since
the number of dollars can only expand through debt, the sum total of dollars
(savings) over all people will always be near 0.

You'd need most of the debt to be taken out by corporations or governments for
the people to have a >0 average savings.

------
wil421
Does savings include 401k? If not then I would fall under the less than $1,000
only because I made a large purchase a few weeks ago.

If I had over 10k in savings I would try to invest at least some of it in
something that would give a marginal return in a few years. It would be better
than just letting it sit in a savings account.

~~~
cvburgess
Reposting my comment to another commenter:

A 40 is not liquid - if something happens and you need money tomorrow yo don't
have immediate access to those funds. There may also be heavy fees if you pull
funds out before you are 60.

~~~
wil421
That is true but why should I let the bank make all the money off my savings?
If I were to lose my job today I could easily find a bartending job like I did
in college to support myself in the time it takes to find a new job. My
situation may be different than a lot of people and I live in a large city.

If I had 15k in savings to buy a house in two years I could put 10k into a CD
and still make something like $300. The 5k could be for emergencies and the
10k is still more liquid than a 401k.

~~~
bmj
_f I were to lose my job today I could easily find a bartending job like I did
in college to support myself in the time it takes to find a new job. My
situation may be different than a lot of people and I live in a large city._

This is not an option for a lot of people, particularly those with families.

That said, your follow-up makes sense, and I've typically done something
similar.

~~~
nommm-nommm
Don't count on the fact that a bartending job will always be easy to come by
just because it once was.

Back in 2008 any job (even fast food) was hard to come by in my area.

------
s3nnyy
Some manage to live frugally, and retire within 5 years:
[http://earlyretirementextreme.com/how-i-became-
financially-i...](http://earlyretirementextreme.com/how-i-became-financially-
independent-in-5-years-part-i.html)

My personal savings-rate is around 80% (I spend about 1.2k CHF and make around
6.5k CHF) - I probably can also retire in five years or I will keep on working
20%-40, when I have kids.

I live in Zurich, read my story here: "Eight reasons why I moved to
Switzerland (to work in IT)" [https://medium.com/@iwaninzurich/eight-reasons-
why-i-moved-t...](https://medium.com/@iwaninzurich/eight-reasons-why-i-moved-
to-switzerland-to-work-in-it-c7ac18af4f90))

------
JustSomeNobody
Less than 86% even have enough for a proper emergency fund. This is very sad.

Either they have found a place to put it other than a savings account (which
we all know doesn't provide even enough interest to cover inflation), or
people are in a world of hurt right now.

------
kristopolous
So what do we do about this? Should we have a society where people are working
full-time and living paycheck-to-paycheck? Is that a fair and equitable thing?

After we fix our government corruption in this country, we should look towards
more socialism - I'd rather live in a society that houses homeless children,
cares for its disabled, helps its sick, and empowers its poor, then one that
doesn't - and I think most people share my view.

~~~
mod
Yeah, I share that view--where we differ is you're saying "socialism is these
things, and capitalism isn't," and I disagree.

~~~
howdoipython
Does it really matter what it's called?

~~~
mod
No, it matters how it's accomplished. Socialism and capitalism differ in that
regard.

~~~
kristopolous
correct! capitalism doesn't help those without capital.

------
izzydata
My savings account is pointless. The interest rate is about 0.01%. The
question should probably be restated to get a more accurate response in how
much of their own money people actually have access to in emergencies.

I have over 10k in checking, more in 401k/IRA and 0 in savings. The last time
I had 1k in savings they gave me 1 cent in interest.

------
tn13
I dont keep any money in my Savings account. The interest rate is rubbish. I
just invest it someplace better.

------
cheriot
It's not just the ability to save, the return on savings, but also the ability
to draw on credit that discourages savings.

The permissive rules that allow credit cards to bypass state regulations make
it easier for them to encourage this kind of precarious situation.

------
KirinDave
The US financial industry has been consistently reducing the value of consumer
savings accounts. Their interest is poor, their rules are arcane, they're
awkward to work with, and they're often oversold as a feature to consumers who
neither need nor want them.

In many institutions, interest bearing checking accounts with sufficient
minimum balances deliver HIGHER returns than savings accounts for the same
balances. In most cases, the march of inflation means your savings account is
a pretty depressing way to LOSE money over time.

The savings account is a legacy product from an entirely different era in the
American banking system. For the most part, consumers realize this and avoid
them.

------
intopieces
The articles says that "The responses are representative of the U.S. internet
population, with a margin of error within 1.70 percent." They don't give us
any information I could use to refute that assertion. So with that, we can
assume that the people who reported <$1000 savings were not people with
diversified portfolios or people who voluntarily eschew savings accounts
because the interest rate is not profitable for them. It's astounding what a
bubble this communitiy lives in that it could forget that most of the country
doesn't have a bunch of money lying to around to invest.

------
ausjke
When you have 0 interest rate people will park/invest their money _anywhere_
but saving account.

checking accounts, investing, real estates etc, check all of those big-data
then you can get the real picture.

------
bebop
Interesting article, but I wonder why they did not use red=>green for "No
Savings"=>More than 10k. It seems like an easier way to visualize the
information.

------
darkstar999
Flawed survey, it asks “How much money do you have saved in your savings
account?" Which isn't the same as "how much savings do you have?"

------
dlandis
As others are pointing out it is a totally meaningless survey. They asked,
"How much money do you have saved in your savings account?".

Many people will only keep a small emergency fund in cash plus some money in a
checking account and have everything else invested. Do those investment
accounts and retirement accounts qualify as "savings accounts"? Probably not
if people are reading the question literally.

~~~
cvburgess
Those accounts that you mention are not liquid - if something happens and you
need money tomorrow yo don't have immediate access to those funds. Also, sot
retirement accounts levy fees if you pull funds out before you are 60.

------
coryfklein
It actually surprises me how many people keep >$10,000 of cash in their
savings account. That would make sense to me if you have a large expense
coming up like a house or a car, but if it were me then most of that money
would just be sitting there and I'd rather have it somewhere that it's making
more money for me.

------
eli
Metacomment: Great example of how to turn a cheap Google Consumer Survey into
a blog post that gets a bunch of traction.

------
igorgue
I don't have a savings account, but I do have more than that to spare and
spend on whatever I want or not...

------
uptown
Individuals have a variety of options for where to invest excess cash. On a
slightly different subject, does anybody have any advice what a small business
should do with cash? Are there practical or relatively safe ways to get a
return on a corp's cash on hand beyond basic interest?

------
tomasien
What do people use to save? I use Qapital, I know a lot of people like Digit.
I know they can't foundationally help the problem but they can help a lot of
people who are capable of saving but aren't - which I would suspect is
probably close to the majority of these folks.

------
MadManE
It's interesting to see this juxtaposed with the story about extreme poverty
dropping globally:

[https://news.ycombinator.com/item?id=10352189](https://news.ycombinator.com/item?id=10352189)

------
calvinbhai
Does anyone know the survey sample size or where/how this survey was
conducted?

Title says "savings", article is about savings accounts. Also, the definition
of millennials, is quite eye popping

------
kelukelugames
Keep in mind median household income is below 60k. This isn't surprising. I
wonder what the statistics for our social economic level are.

~~~
zeckalpha
"our"?

~~~
kelukelugames
I bet most people on here make more than 50k a year.

------
irremediable
As others have pointed out, the article is stupid because it asks a misleading
question.

So, instead of discussing that, I'd like to ask: roughly what savings do HN
readers have?

How much should I be saving at the minute? What should I be saving it in?

I'm a PhD student in my early 20s, living in London, and I only have about
~£500 in savings. I'm trying to save £1000-£2000 per year. At the minute, I
just keep my savings in a separate current account to my main account -- which
also has higher interest (3%).

------
vvpan
I wonder how many of those people are paying off mortgage with what would be
their savings.

~~~
arbitrage
You should be able to pay off your mortgage and still maintain & increase
savings. If you can't, you have too much mortgage.

~~~
lmm
I've been overpaying on my mortgage by 150% all year; that's the money that I
would otherwise have saved. Savings account would give me 3% tops; stocks
would give me more but not risk-adjusted more. Paying my mortgage off early is
4.2%, risk-free.

Am I being dumb? It's quite possible there's something I've missed.

~~~
AjithAntony
Long term fixed rate? Why bother paying early. Interest rates must rise
eventually. If even if they don't the future dollars are much cheaper anyway
becuase inflation won't stop. In real terms, your interest rate goes down
every year, to the point where is can reach 0 or negative. Locking the money
in the house means opportunity costs to take advantage higher rates later.

~~~
lmm
Medium-term I guess. I've got 2 years left on the fix, then it floats.

Everyone says rates have to rise eventually. But so far we've gone 7 years of
near-zero rates. If there were a dramatic shift I could take a payment holiday
and put it all into savings, but I doubt I would. As for inflation, it affects
any form of saving equally - nominal 4% interest is better than nominal 3%
whatever that is in real terms.

------
pizzaburek
Too bad that a far more interesting discussion about Libertarian communism got
flagged (or at least is not visible on a main page).
[https://news.ycombinator.com/item?id=10351830](https://news.ycombinator.com/item?id=10351830)

------
humbleMouse
This is a silly article, who uses savings accounts anymore?

~~~
brianwawok
Lots of people. My ally savings account is 1%, about the same as a CD.. so I
keep 2 months of expenses in it.

------
curiousjorge
I wonder what the numbers are like for Canadians

------
rozap
So 38% of Americans are have more than $1000 sitting around becoming less
valuable everyday? That may be a more interesting conversation to have.

~~~
TallGuyShort
Only 38% of Americans are capable of being self-reliant in the event they miss
a paycheck or two.

edit: Why the downvotes? Is there a problem with being moderately self-
reliant?

~~~
lmm
Savings accounts aren't the only way to achieve that.

------
drzaiusapelord
Good! Savings account is the worst place to keep money. Mine are in my 401k,
investments, tied up in my home, or just sitting in checking ready to be used.

I really hate these "OMG USA IS THE WORST" articles. How we handle money in
the US is different than some countries. American cash is often invested
and/or invested in their retirement via the 401k system, as opposed to the
pension system controlled by the government or a union.

There's probably a good discussion to have about spending, how poor young
people are, college tuition, and retirement savings and such, but not with
this data. Net worth is probably what people are looking for when having these
kinds of conversations.

[http://www.fool.com/investing/general/2015/01/26/the-
average...](http://www.fool.com/investing/general/2015/01/26/the-average-
americans-net-worth-by-age-heres-where.aspx)

