
Most Americans don’t have enough assets to withstand 3 months without income - hhs
https://today.oregonstate.edu/news/study-most-americans-don’t-have-enough-assets-withstand-3-months-without-income
======
kanobo
When you're living paycheck to paycheck your IQ and decision-making ability is
effectively handicapped from having to constantly worry about eating and
security. Combine that with a system that can be brutal if you don't have the
means, this stat is not at all surprising.

~~~
BLKNSLVR
> Combine that with a system that can be brutal if you don't have the means

And there's the crux of it. "The system", when it's working towards a
sustainable civilisation, must provide some level of protection for those who
don't have the ability to make good decisions. Scammers and advertising as one
example. Regulation and fines that are enforced and sufficiently discouraging.

It's too easy to profit off the bottom end.

Finding where protections intersect with personal freedoms / responsibility is
the perpetual impossibility.

~~~
sv1123
Correction: who don't have the _privilege_ to make good decisions, not ability
:)

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MattGaiser
Someone with unemployment insurance is classed as going to starve in a few
months without a job. Except they paid into that. For the purposes of
unemployment, insurance is saving.

Someone without retirement savings is declared to be unable to retire. Except
for Social Security and Medicare. They paid into those. Those are saving.

What these miss is that plenty of saving is being done by people, but it is
done through government programs so it does not get classified as saving.

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beer_cub
If I missed one paycheck I'd be hosed, so this isn't surprising.

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yalogin
This is well known. The income inequality is high as is, but the number of
below middle class to poor is also increased. Unfortunately there is no
political will to help the situation. We are more than happy to provide
trillions to wasteful spending but severely against spending on people.
Decades of such behavior will of course hurt the country. The sad part is we
stopped caring about fixing our house in prosperous times as well.

~~~
rayiner
Not really:
[https://www.nytimes.com/interactive/2015/01/25/upshot/shrink...](https://www.nytimes.com/interactive/2015/01/25/upshot/shrinking-
middle-class.html). The percentage of households making below $35,000
(inflation adjusted) has shrunk since 1967, though it's up modestly since
2000.

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jimrandomh
This is a misinterpretation of what the survey data says. It's a widespread
one, and worth correcting.

A large fraction of people have debt, such as student loans, mortgages, car
loans, etc. If they have a significant amount of extra cash, they'll use it to
reduce their debt, because money sitting in a bank account makes less interest
than the interest on a mortgage or any other sort of loan. So if you look at
these peoples' bank accounts, they don't have any savings. Scary, right? But
most of them _do_ have lines of credit, so if they have a financial setback,
they won't lose the ability to buy groceries, they'll just take on additional
debt.

~~~
sethammons
likely additional "unserviceable" debt.

------
whatl3y
Couple of thoughts:

1\. Although I agree it’s a problem, this isn’t new news I don’t believe. I
don’t have good references to point to right this second, but I swear I hear
almost monthly if not more often that most people couldn’t come up with
$500-1k in an emergency, much less multiple months of expenses.

2\. The article points to COVID-19 exacerbating these findings, but on top of
the cash every US tax payer received who made under the defined threshold,
there were a ton of things put in place or implemented like aid, loan
forbearance plans, rent extensions etc. as apart of COVID-19. It seems a
little (but I guess not totally) surprising that this crisis is what brought
to light this issue.

~~~
snow_mac
Dave Ramsey would say ANYONE can come up with $1000 for an emergency fund...

~~~
drunkpotato
Dave Ramsey can say whatever he likes, he's the head of a massive personal
finance brand. Having listened to a fair bit of him, and Mister Money
Mustache, I can say it's a mix of decent advice and completely oblivious out
of touch-ness, as well as a complete unwillingness to face how incentives
actually work in the real world, despite an insistence, contrary to all
evidence, that they are somehow hard-nosed realists dispensing truth.

As in, their advice is worthwhile, in as much as it helps you live your life
in a way that makes you happier. Beyond that, they're just as stupid as
everyone else.

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samsquire
If you don't have an emergency fund of money, begin saving one now.

You don't want to get ill and have no emergency money left besides.

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ekianjo
> A new study from Oregon State University found that 77% of low- to moderate-
> income American households fall below the asset poverty threshold, meaning
> that if their income were cut off they would not have the financial assets
> to maintain at least poverty-level status for three months.

Low-to-Moderate income, if defined by the median being moderate, would count
up to 50% as a whole group.

77% of 50% of the population is NOT "Most Americans", another deceitful
headline not supported by data.

~~~
boomboomsubban
How many members does a household have above 50% and below 50%? Further, the
study is paywalled but some percent of the 50% above the median likely also
fall below the asset poverty threshold.

The headline may be wrong, I'm unsure, but you aren't even looking at the
data.

------
umvi
Even in the middle class people live unsustainable lifestyles above their
means. We need to bring back a culture of living below means and self-
reliance.

~~~
Accujack
No one likes being poor, and most people learn to live as well as they can
with the income they have. Our society encourages this because it makes
workers happy with less pay.

Banks and businesses prefer consumers this way, and any attempt to get people
to live "within their means" will fail because of the push back from that side
as well as the general discomfort and distaste for living less well (and less
healthily, at least in the US - quality food is expensive).

A far better solution is to address income inequality and to bring equity to
the results of everyone's work. Wage growth has been too low for decades which
has been great for corporate owners and investors, but bad for society.

------
recursivedoubts
And, what is worse, Americans have lost most of their non-monetary social
capital: large extended families, neighborhood churches, civic groups, mutual
aid associations, etc.

[https://en.wikipedia.org/wiki/Bowling_Alone](https://en.wikipedia.org/wiki/Bowling_Alone)

Things are never as good or as bad as they seem, but it sure seems bad right
now.

~~~
readflaggedcomm
The casualties of social justice are justified, not bad.

------
snow_mac
It's so stupid. Spend less then you earn, save, don't buy the latest shit. So
many people waste their money buying new toys like the latest iPhones or
Androids, fancy ass cars and expensive vacations. All my neighbors make like
blue collar salaries; $50k at the most, but they have the latest treager
grills, fancy infinitis, audis in their driveways, new tvs every year; and
guess what tens of thousands in credit card debt

~~~
slavapestov
> Spend less then you earn, save, don't buy the latest shit.

This logic breaks down when you get an unexpected medical bill, or the car you
rely to get to your job breaks down and you get fired, etc.

The latest iPhones and Androids are quite affordable compared to healthcare
and rent in this country.

~~~
the_gastropod
It’s not about the iPhone (or coffees, avocado toast, etc.) It’s about the
habit of unnecessary spending. _Many_ people (obviously not all) could handle
unexpected expenses if they had better financial habits.

~~~
slavapestov
> It’s about the habit of unnecessary spending. Many people (obviously not
> all) could handle unexpected expenses if they had better financial habits.

What you call unnecessary spending is what actually floats the entire economy.
If everyday folks’ disposable income dries up, the whole country will suffer,
even your bullshit startup in a converted loft in SOMA or whatever it is that
you do that earns you a six figure living.

~~~
sifar
>> What you call unnecessary spending is what actually floats the entire
economy

I get tired how this argument is used to justify so much BS.

I think this pandemic has debunked this. You forget the other part that is
saving is what generates real capital to invest, not debt.

------
sabujp
apparently "huge" businesses/franchisees don't either :
[https://moneywise.com/a/these-restaurant-chains-are-
closing-...](https://moneywise.com/a/these-restaurant-chains-are-closing-2020)

------
Omie6541
can someone please put a number on low-to-moderate-income? as in lower bound,
upper bound. Couldn't find this in the article, and hence it makes less sense
to me being a non-american.

------
RickJWagner
I've always been amazed that basic money-handling skills are not the top of
the curriculum starting in elementary schools. Everybody should know how to
manage money, yet only a few people do-- and they are self-educated!

There will always be a tiny percentage of people who are in financial trouble
because they had some catastrophic illness, or they got fired repeatedly
through picking bad employers, or something else. But the vast majority of
people could learn to spend less than they make and invest for the future.
It's completely simple.

But it also requires discipline. I think therein lies the rub.

------
adamnemecek
It's not most Americans, it's "77% of low- to moderate-income American
households fall below the asset poverty threshold".

------
trilinearnz
The study focused on low-moderate income households and whether they had any
financial assets like stocks/bonds and mutual funds. That this segment has low
representation in this respect doesn't surprise met at all, given the level of
education / discretionary income needed to pursue such investments. Also,
Western capitalist society saturates the populus with consumerism (which to be
fair supports the economy), so there's that force at play as well.

------
11thEarlOfMar
> ... U.S. wealth inequality is more pronounced than income inequality.

This should be obvious? Wealth can grow exponentially and more or less
indefinitely, but income does not _. Since 1990, median hourly wages are
beating inflation by a slim margin. An investment in the S &P 500 in 1990,
adjusted for inflation, would be worth 7x. With 4 companies now in the
Trillion Dollar Club, that inequality seems to be accelerating.

Does that imply that Americans are not wealthy because they don't plan their
finances for the purpose of growing wealth? Andrew Yang wants to help with
UBI, but I wonder if people would simply spend up to their new income and be
in the same 3 month boat. They'd have more stuff and more fun and eat better
and live in a better location. But many would still 3 months from insolvency.

Personal financial management should be taught as a life skill in high school.

_technically, it does, but in practical terms, there is essentially no wage
growth above inflation, 7% since 1990: [https://www.brookings.edu/blog/up-
front/2019/09/10/are-wages...](https://www.brookings.edu/blog/up-
front/2019/09/10/are-wages-rising-falling-or-stagnating/#)

------
smart_jackal
But America does give unemployment allowance to the laid off, so no need to
worry?

~~~
sethammons
It is different from state to state, but when I found myself on unemployment
many years ago, it was less than my already meager earnings. It helped float
us, but each month was negative cash flow.

~~~
kube-system
Isn’t unemployment less than earnings just about everywhere? I think the
typical approach to unemployment isn’t really to make it like you never lost
your job, but to provide just enough to get by temporarily.

~~~
guerrilla
Not less than _their_ meager earnings. They were saying that they weren't
making enough already and this was less, not that it being less than what some
people make is bad. If you make the absolute minimum for survival, it
shouldn't be less than that.

~~~
kube-system
Negative cashflow doesn’t cause immediate death. Many (most?) people who
suddenly lose income have a a negative cashflow in the immediate term
(especially in consumerist societies) — many expenses take time to adjust. And
people generally aren’t planning to be on unemployment for the long term
anyway.

~~~
guerrilla
To not be catastrophic does not necessitate being good or even acceptable. Our
systems of insurance can treat people better and we should want this because
any of us can end up in that situation due to unforseen and even unforseeable
events.

