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62% of Americans Have Under $1,000 in Savings, Survey Finds

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Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#21

Post by [deleted] »

6stringmerc wrote: post #15
manigandham wrote: post #2

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.

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.

[deleted]

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#22

Post by [deleted] »

kd5bjo wrote: post #18
6stringmerc wrote: post #15

Earlier quoted context omitted.

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.

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

[deleted]

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#23

Post by sbuttgereit »

patio11 wrote: post #5

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.…

Don't forget, our government also encourages spending. Indeed, consider the entire premise of Keynesian Economics where the answer is stimulate demand (spending/consumption) over capital accumulation. Both major political parties buy into this idea.

Cars for Clunkers was about new sales: taking a possibly working asset, albeit an older one, and trading it in (with cash) on newer cars.

Interest rates are part of this and there are even suggestions going around now for negative interest rates. Why? To make savings less attractive and spending moreso.

Completely predictable and what our leaders want.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#24

Post by manigandham »

6stringmerc wrote: post #15
manigandham wrote: post #2

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.

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.

Checking accounts and certain retirement accounts are also insured, and easily retrievable

The issue seems to be the relative lack of use from a separate savings account.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#26

Post by Spooky23 »

patio11 wrote: post #5

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.…

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.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#27

Post by 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...

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#28

Post by thibaut_barrere »

patio11 wrote: post #5

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.…

I'm curious about that - isn't it also culture-driven (spending habits) or maybe linked to education costs?

For instance in France, where "CD" equivalent (DAT) rates are fairly low as well currently, the saving rate (ratio between what is added to savings monthly, and monthly revenue) is 15.1% in 2014 (source: INSEE [1]).

Also, still in France, people will save /even/ if the interest rate is low.

[1] http://www.insee.fr/fr/themes/tableau.asp?reg_id=0&ref_id=na...

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#29

Post by 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.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#30

Post by [deleted] »

patio11 wrote: post #5

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.…

[deleted]
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