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40% of Americans can't cover a $400 emergency expense

money.cnn.com

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Re: 40% of Americans can't cover a $400 emergency expense

#151

Post by whatAmount »

ralusek wrote: post #31
sjg007 wrote: post #19

Earlier quoted context omitted.

We should but you know personal responsibility and all that jazz. The wealthy only care when the pitchforks come out. The biggest achievement of the wealthy has been to convince the middle class to eat itself.

But personal responsibility is actually an important concept. It is completely unacceptable to not have $400 on reserve for an emergency as a functioning adult. That is a situation that can only be achieved by poor decision making and a lack of personal responsibility. Any strategy that is employed to remedy this has to contend with the fact that the individuals who need to have this situation remedied for themselves…

What makes $400 such a special number? Why not $100, Why not $500, Why not $1,000?

What makes $400 the ideal number? Probably nothing, except the fact that it makes for the best headline, since "2 out of 5" is a quotable statistic.

Formulating advice should follow a different pattern. The ideal number for emergencies is probably closer to $5,000 since it covers more realistic emergency scenarios.

$500 might cover food, gas, a few taxi rides or train tickets and basic OTC medication like asprin for possibly a week.

$5,000 might cover a lost or stolen laptop, plane tickets, hotel stays, car repairs, emergency rooms and ambulances and out-of-pocket prescriptions, funerals, rent or convert to a month's worth of basic needs (food, gas, short-haul travel).

More is obviously always better, but emergency response is about covering the cost of capacity to react, plus supplies needed to take action, plus duration of endurance. $500 wouldn't keep you off the street for more than a weekend, but $5,000 could last a month or more.

Re: 40% of Americans can't cover a $400 emergency expense

#152

Post by makecheck »

We can’t improve the money situation without improving the “free time” situation too. For people with 2+ jobs and hours of commuting, when is there time to do anything that would remotely fix their financial situation? Exhaustion for starters. No time for more school or other improvements that might net a better job. No time to even research where a better place to live might be. Heck, even voting for someone to help change your situation takes a lot of time, if you want to figure out which candidate is truly in line with what you want.

Re: 40% of Americans can't cover a $400 emergency expense

#153

Post by AnimalMuppet »

s73v3r_ wrote: post #132
AnimalMuppet wrote: post #62

Earlier quoted context omitted.

I have yet to see a UBI proposal that provided non-trivial amounts of money and yet was not simply financially impossible. For example, there are over 300M (300,000,000) people in the US. To provide $1000 per year would require $300B. But that's less than $100/month. If you're homeless, that might be enough that you don't starve. But it's not enough that you can go to a doctor and eat. It's sure not enough that you c…

"If you make it $1000/month, now it's enough money to actually help people. But it also costs $3 trillion a year. That's twice the current Federal budget." The 2015 Federal Budget (I guess the last time we actually had and official one) was about $3.8 trillion dollars. The budget President Obama submitted on 2016 for fiscal year 2017 was about $4.2 trillion.

I stand corrected. I had $1.5T in my mind for some reason.

Still, $3T more would be a pretty large increase. And there's exactly zero chance that a corresponding $3T would be cut somewhere else...

Re: 40% of Americans can't cover a $400 emergency expense

#154

Post by jlarocco »

ralusek wrote: post #31
sjg007 wrote: post #19

Earlier quoted context omitted.

We should but you know personal responsibility and all that jazz. The wealthy only care when the pitchforks come out. The biggest achievement of the wealthy has been to convince the middle class to eat itself.

But personal responsibility is actually an important concept. It is completely unacceptable to not have $400 on reserve for an emergency as a functioning adult. That is a situation that can only be achieved by poor decision making and a lack of personal responsibility. Any strategy that is employed to remedy this has to contend with the fact that the individuals who need to have this situation remedied for themselves…

The funny thing about what you're saying is that there's always somebody richer saying the same thing about you, just with bigger sums of money. "He wouldn't have a mortgage if he just made better financial decisions!" ;-)

Honestly, though, you're just stating the obvious: people screw up and behave irrationally. That's common knowledge.

The goal is to minimize the impact of poor decisions and give people a way to get back on track. "F* 'em, I've got mine" doesn't help anybody.

Re: 40% of Americans can't cover a $400 emergency expense

#155

Post by eli_gottlieb »

rndmize wrote: post #55
johnm1019 wrote: post #2

I think we as a nation should consider this an issue of national security. This type of financial instability in such a large percentage of the population could lead to making short-sighted or bad decisions in tough times, increased violence, increased rates of incarceration (both of those increasing the cost of government for all), among many other things. The reasons for it are multi-faceted I'm sure. I hope voters…

Your post is optimistic to the point I choked on my coffee. Our economy is predicated on consumer spending; we have a whole set of industries built on the backs of poor financial decision making and being near-broke (payday loans, credit cards, overdraft charge reordering, debt collectors, etc.) all of which pull power away from desperate people and give it to others (now your landlord/phone company/ISP/etc have lega…

> Your post is optimistic to the point I choked on my coffee.

Don't sneer. Do the hard work to make necessary things happen.

Re: 40% of Americans can't cover a $400 emergency expense

#156

Post by prewett »

Wow, everything in this thread is "those evil rich people, fleecing the poor." Quite aside from the fact that the target audience of this site can expect to make around 2X the median income of the US--meaning that we are those evil rich people--surely the problem isn't this one-sided.

The poverty rate in the US is about 13% [1]; we would expect those people to not have any savings. That leaves about 33% unaccounted for. It looks like 42% of workers in the US make less than $15/hr [2], which does fit the figure fairly close. However, some of those are teenagers, so they don't count as they aren't living on their own.

I'd like to see some analysis of spending. How many people don't have any savings because they aren't spending wisely. This girl [3] discovered that she could actually save for a deposit for a house in London, despite making under £40k (about $53k). That's less than the median US income and presumably doesn't go all that for in London. She was simply spending a lot of money on food, drinks, and specialty coffee.

[1] https://poverty.ucdavis.edu/faq/what-current-poverty-rate-un...

[2] http://fortune.com/2015/04/13/who-makes-15-per-hour/

[3] https://www.theguardian.com/money/2018/jan/29/can-you-really...

Re: 40% of Americans can't cover a $400 emergency expense

#157

Post by dpark »

sigstoat wrote: post #86

https://www.thestreet.com/story/14296470/1/americans-spend-b... so the average american doesn't have $400 saved up, _and_ spends $206 per year on lotto tickets. if we're in society collapsing danger, maybe we could look at the organizations running the lottos?

The average American spends about twice that on just beer (not all alcohol) every year. I share your concern for poor people dumping money into the lottery, but that’s actually a pretty small vice.

Re: 40% of Americans can't cover a $400 emergency expense

#158

Post by bcohen5055 »

georgrwasington wrote: post #109
jvanderbot wrote: post #104

Earlier quoted context omitted.

Can you explain why you feel NASA is a jobs program? There's certainly a much larger, constant-stream funding source going to national defense and national sciences. NASA is being paid to continue our usually unprofitable interests in space. Everything else falls under the non-compete restriction. Also, NASA employs some highly employable folks who would make much more in private industry.

I'm actually not going to do this. If you want to have this conversation go read up on it. Not trying to be rude but your question makes it sound like you've never heard the idea before. Given that, I feel like you're not ready to have this conversation. ...I'm trying not to sound rude but it isn't working. I am not expressing malice towards you.

Any links to good articles about this? I for one have not heard of this before.

Re: 40% of Americans can't cover a $400 emergency expense

#159

Post by skookum »

aarongray wrote: post #126
skookum wrote: post #122

Earlier quoted context omitted.

The inflation of medical expenses in the US significantly outpaces the standard measures of inflation that you're quoting, generally by at least 3%. The OPs estimate of $500 is much closer to reality than yours.

See my reply here: https://news.ycombinator.com/item?id=17130287

Quoting a factoid about the distribution of actual medical _spending_ doesn't change the incorrectness of projecting CPI onto medical _costs_. There are indices - the BLS maintains one and a number of actuarial firms publish others - that track the costs of various medical services and they all outpace CPI.

Re: 40% of Americans can't cover a $400 emergency expense

#160

Post by dragonwriter »

rndmize wrote: post #55
johnm1019 wrote: post #2

I think we as a nation should consider this an issue of national security. This type of financial instability in such a large percentage of the population could lead to making short-sighted or bad decisions in tough times, increased violence, increased rates of incarceration (both of those increasing the cost of government for all), among many other things. The reasons for it are multi-faceted I'm sure. I hope voters…

Your post is optimistic to the point I choked on my coffee. Our economy is predicated on consumer spending; we have a whole set of industries built on the backs of poor financial decision making and being near-broke (payday loans, credit cards, overdraft charge reordering, debt collectors, etc.) all of which pull power away from desperate people and give it to others (now your landlord/phone company/ISP/etc have lega…

> Actually, it appears that voters and politicians have zero interest in improving this situation, seeing as the current administration is making every effort to demoralize and defang the CFPB

The current administration was elected with fewer votes than the leading opponent, so it certainly reflects a subset of voters and the politicians comprising the administration, but hardly is a basis for concluding that voters in general have zero interest in issues simply because the administration evidently does not.

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