Quote:
Originally Posted by Skid Row Joe
Those numbers surprise me not....
At my age, I would get nervous if I didn't have perhaps 10 years or more of living expenses on hand. But I realize my risk meter is touchier than most American's risk meters.
The numbers speak volumes for themselves:
52% of American households don't have $5K to their name.
26% of households don't even have $1K to their name.
These statistics seem to indicate that waves of Americans may be totally clueless on what it takes to get and stay ahead financially.
This leaves approximately 25% of American households that possess $5K+ or more in savings.
Many Americans are very BIG consumers of money & credit, even when in the negative balance range. Sad...
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Moreso, I think the debt-savings ratio shown shows how much of a disparity there is between inflation and the increase of pay rates.
Couple that with all these things people can't live without, and expenses are out of control. Think about what marketing tells you you need:
Cell phone
Computer with internet service
Some sort of pay TV service, with "premium" channels
New car
Huge house
Fancy jewelry
frequent restaurant meals
The list goes on and on, in just the example above you're looking at well over $2000 a month before you get to housing. Housing is probably another $2k per month, plus it's associated expenses like electricity, water, heat and so on, so before you know it, you and your spouse are both working full time to make ends meet. Then your neighbor goes and buys a boat or Harley or vacation property, so because your balls are in your wife's purse you have to have the same or better. Get a loan, another payment out the window, and further in debt.
On top of all this is that the current "adult" group was raised by a group with an overblown sense of entitlement, who had money to blow thanks to their parents. Pre-50's US society was very economically minded for the most part, and there simply weren't the cash siphons there are today. People could save up enough to buy a car or a house for cash, or have a quite small loan on it. Loan interest rates reflected this and controlled it to some extent by being fairly high.
Nowadays, you get a loan for everything so you can have it now, instead of saving up for it. When was the last time you heard someone seriously say they were saving up for a house, car, or other expensive thing and actually mean a sizeable portion of the cost?