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

Post by manigandham » Thu, Oct 08, 2015, 5:28 PM UTC

6stringmerc wrote: post #27

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 ex…

Post by ngokevin » Thu, Oct 08, 2015, 5:30 PM UTC

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.…

Post by HLRoku » Thu, Oct 08, 2015, 5:36 PM UTC

Shivetya wrote: post #16

vvanders wrote: post #9

Earlier quoted context omitted.

I'd be surprised if it's just savings percentage driving this. As tech workers we're a bit more privileged in that we have access to salaries and opportunities that a lot of America doesn't have. Less than 6 years ago I was very much in that 62% category as high cost of living was eating into our combined paycheck pretty heavily.

A lot of people get into the dangerous mentality that since the interest rates are not high that it somehow makes saving not a good idea, similar to many people in our industry who won't max out their 401k simply because the employer does not fully match. With regards to savings and lack thereof, regardless of salary. Far too many people excuse themselves from budgeting because they believe they are stretched too far…

Post by hugh4 » Thu, Oct 08, 2015, 5:37 PM UTC

Spooky23 wrote: post #26

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.

Post by hugh4 » Thu, Oct 08, 2015, 5:40 PM UTC

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"