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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

#51

Post by cvburgess »

dlandis wrote: post #14

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.

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.

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

#53

Post by Laaw »

HLRoku wrote: post #40
Laaw wrote: post #36

Earlier quoted context omitted.

You're exactly the kind of person this article is pointing out, because your ability to be wiped away by the market is a precarious position to be in.

I don't really follow how having money in stocks, bonds and a house is somehow capable of being wiped away by the market when a savings account in a bank wouldn't be in dire straits with such an economic upheaval to render those 3 investments useless

I'm sorry you don't follow, but it should be fairly obvious that stocks can crash, bond markets can collapse, and home prices can plummet, whereas money in FDIC insured savings accounts would only be lost in the event of a catastrophic, country-jeopardizing event, in which case we'll all have bigger problems.

I'm not meaning to attack anyone personally, I just think this survey is trying to suss out what percentage of Americans are in a position such that an economic downturn would hurt them severely.

I also don't know much at all about finances, so take what I'm saying with a jar of salt.

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

#54

Post by Laaw »

beambot wrote: post #44
Laaw wrote: post #36

Earlier quoted context omitted.

You're exactly the kind of person this article is pointing out, because your ability to be wiped away by the market is a precarious position to be in.

What? Let's assume he's intelligent and has good diversification (eg. he mentioned bonds, stocks, home, and cash -- probably in a investment account). If all his financial positions got "wiped out" in a broad-sweeping financial collapse, then "cash in savings" would be equally worthless. In the meantime, he has a home to live in. Plus, most investment accounts give you easy access for withdrawals (eg. debit cards) or…

You're the second person to say this, but how would "cash in savings" be equally worthless? Maybe I'm not understanding, but it's pretty difficult to actually lose money in a savings account, that's the whole point.

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

#55

Post by ChuckMcM »

nostromo wrote: post #10
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.…

Also, the article title is very different than the actual survey question: > How much money do you have saved your savings account ? That's a very specific question. A person with $5k in their checking account or a person with $100k in a retirement account might still answer that they have no savings.

That was what I was wondering as well, since savings accounts are such poor vehicles for saving these days in terms of a return I'm sure a lot of people just leave the money in their checking account.

That said, its really really important that if you can't save some money every month, and don't accumulate savings year over year (those are importantly different things!) That is a signal that you are living beyond your means, budget down and find ways to reduce your burn rate.

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

#56

Post by realquick81 »

eimai134 wrote: post #13

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…

Indeed, much of the poor are poor because they have low IQs.

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

#57

Post by cvburgess »

wil421 wrote: post #41

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.

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.

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

#58

Post by Nadya »

deckard1 wrote: post #43
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 don't think that's the case here at all. You're talking about people that are both savvy enough to have a savings account and familiar enough with investments to know that a savings account is bad compared to other investments. On top of also knowing another place to put their money (many people completely fear the stock market and all index products). The average American is just not sophisticated at all here. We'…

This is the situation I am in. I'm not savvy enough to make investments that have meaningful or significant returns - so it all goes into a savings account.

I have 1 years' expenses saved and it just slowly accumulates because I don't know how to make a safe return on it. I don't want to invest say, 3 months savings only to lose it...

Definitely the "play to not lose" mentality rather than a "play to win" mentality but I see little reason to change that behavior.

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

#59

Post by 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...

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

#60

Post by Laaw »

runako wrote: post #45
Laaw wrote: post #36

Earlier quoted context omitted.

You're exactly the kind of person this article is pointing out, because your ability to be wiped away by the market is a precarious position to be in.

I think you're implicitly doing an asset allocation for the poster. > Cash on hand or it's invested in stocks, bonds and my home. That could be $100k on hand in checking, $600k in stocks/bonds, and $200k in home equity, with $0 in a savings account. Asset allocations that don't use savings accounts are not necessarily 'precarious'. Also, it's worth noting that most financial advisors do not recommend that you keep a…

You are, as far as I know, entirely correct. I still think the survey was designed specifically to find these people who exist in this manner, and I think your criticisms are valid when placed against the thrust of the survey.
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