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Many don't have $2,000 for a rainy day

money.cnn.com

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Re: Many don't have $2,000 for a rainy day

#91

Post by yannickmahe »

nkassis wrote: post #5

2,000 bucks is a lot, I know the rule of thumbs is like 3 months net salary to keep for bad days but that's just hard for people like most on HN that are young, trying to either bootstrap a business or have a ton of student debt. Not sure what I would do but I think I could sell enough non-essentials to make up the money if it was a really bad situation.

My father used to tell me I should have around 15K€ around in case of emergency. Less at the beginning of my career of course.

I have trouble seeing 2K as a lot: I don't think it could cover real emergencies (losing a job, emergency in my family overseas...)

Re: Many don't have $2,000 for a rainy day

#92

Post by tallanvor »

anonymouser wrote: post #43

I have a question for HN hackers. I make over 6 figure a year. My wife doesn't work. She keeps telling me that we are not middle class, and that I should earn more if I want to afford us a middle class lifestyle, because everything is very expensive now. She also thinks that I'm a bit of an underachiever, professionally, for earning only 120K a year. Am I an underachiever or is she out of touch with Midwestern Americ…

$120K/year is damn good money for one person to be making, and in most of the US, a family pulling in that kind of money is still doing very well. If your wife thinks that isn't enough to be considered middle class, she's been living in a bubble.

Re: Many don't have $2,000 for a rainy day

#93

Post by singular »

hugh3 wrote: post #50
ebiester wrote: post #24

Earlier quoted context omitted.

You're looking at it from a middle class perspective. Unfortunately, most of these people are also deep in debt and have already made such cuts. This is the byproduct of double digit unemployment as much as anything. As much as we talk about consumption, most of it is at the middle class level. Now, I've seen poor people make very bad decisions, but many are on purchases you and I would make without a second thought.…

Unfortunately, most of these people are also deep in debt and have already made such cuts. Sometimes I wonder about this. How many poor folks are wasting their limited budget on frivolous crap? One reality show I really would like to see would be about a sensible financial advice type who parachutes into the lives of low-income, deeply-in-debt people and shows them how to budget properly.

That sounds like Alvin Hall[1]. He's not done a show (in the UK at least) for a while, but he's definitely done that type of show.

[1]:http://en.wikipedia.org/wiki/Alvin_hall

Re: Many don't have $2,000 for a rainy day

#94

Post by PagingCraig »

billybob wrote: post #6

If you don't have enough money to handle an emergency, you have an emergency. Go ahead and panic. Trade your car for a cheaper one, move into a cheaper apartment, stop eating out, sell your TV, and get an emergency fund . If you're already living on toasted rats in a cardboard box, that's different, but if you've got unnecessary expenditures, you should really cut those out and get an emergency fund. To do otherwise…

On top of an Emergency fund, I find taking money out for KNOWN expenses makes sense. Like putting aside money for car repair, basic home repairs, etc separate from emergency stuff.

Re: Many don't have $2,000 for a rainy day

#95

Post by sliverstorm »

I cheat a little. I'm still a student, so $2k is still a significant chunk of my net worth.

My strategy to allow myself to own a decent car, a computer, etc revolves around a credit card I secured with a very high credit limit. I have $2k I can "borrow" against my future, and then I have a 30-day grace period in which I can sell possessions to come up with the money. In other words, I use my credit card and its 30-day grace period to increase the liquidity of my possessions.

This has two caveats: 1) Keep that credit card paid off to allow use of the grace period 2) I suffer a net loss when I resell something, but that's a small gamble I decided to take.

Re: Many don't have $2,000 for a rainy day

#96

Post by encoderer »

anonymouser wrote: post #43

I have a question for HN hackers. I make over 6 figure a year. My wife doesn't work. She keeps telling me that we are not middle class, and that I should earn more if I want to afford us a middle class lifestyle, because everything is very expensive now. She also thinks that I'm a bit of an underachiever, professionally, for earning only 120K a year. Am I an underachiever or is she out of touch with Midwestern Americ…

I'm sorry but your wife sounds awful!

You are in the top 10% of wage earners in the US.

It's a nice place to be. I make about the same and my wife treats me like royalty (and works herself and makes about 2/3 that).

Re: Many don't have $2,000 for a rainy day

#97

Post by [deleted] »

hugh3 wrote: post #73
ssharp wrote: post #11

I think it's very important to instill saving behaviors early on in your adult life. After graduating college, I had plenty of debt, but still made sure I was putting money into a savings account. Technically, it would have been much wiser to put any excess money towards 15% APR credit card debt than in 5% saving accounts (5% savings accounts did exist for a few years prior to the 2008 collapse), but actually having…

I think it's very important to instill saving behaviors early on in your adult life. Why early in your adult life? People should begin saving as children. My parents were sensible. I got my first bank account at the age of five, I think. They paid me some small amount of pocket money (two dollars a week?), and encouraged me to save it up to buy things I wanted, and to worship the magic of compound interest (it helps…

[deleted]

Re: Many don't have $2,000 for a rainy day

#98

Post by david_elson »

hugh3 wrote: post #73
ssharp wrote: post #11

I think it's very important to instill saving behaviors early on in your adult life. After graduating college, I had plenty of debt, but still made sure I was putting money into a savings account. Technically, it would have been much wiser to put any excess money towards 15% APR credit card debt than in 5% saving accounts (5% savings accounts did exist for a few years prior to the 2008 collapse), but actually having…

I think it's very important to instill saving behaviors early on in your adult life. Why early in your adult life? People should begin saving as children. My parents were sensible. I got my first bank account at the age of five, I think. They paid me some small amount of pocket money (two dollars a week?), and encouraged me to save it up to buy things I wanted, and to worship the magic of compound interest (it helps…

I second this. My parents set up a notebook in their office that was my running checking account. Whenever I got a birthday check or earned some money, they would cash it in their own account and credit the value. Whenever I wanted to buy a toy, they would deduct the value. (You were lucky that you got compounded interest, though! My parental account had a zero interest rate.)

At the age of 10 I was acutely aware of the value of things and more concerned with keeping the balance on my imaginary account high than with having every toy or computer game I could see. To this day I don't like buying "stuff". It was an awesome parenting move.

Re: Many don't have $2,000 for a rainy day

#99

Post by PonyGumbo »

dmm wrote: post #74
GeneralWaste wrote: post #54

Earlier quoted context omitted.

As a UK resident, I find that distressing. The idea that needing medical treatment might impoverish me or poverty leaves me unable to obtain the treatment I need seems exceedingly cruel.

He's not going to pay $24k. Either he has insurance to cover most of it or he'll just not pay it. Bill collectors can't harass you for medical debts. Hospitals have to treat you regardless of your ability to pay. The whole situation is far from optimal though.

We had insurance, although nearly a year later we received a call from the hospital saying that our insurer had refused to pay, and that we'd be responsible for the bill if the insurer didn't come through. The insurance company claimed that the hospital hadn't provided the complete paperwork, and the hospital claimed it had provided the information multiple times.

We received two more calls about it, each about six months apart. It's been a couple of years now, but it still feels like it's hanging out there - that we may get a call at any time claiming that we owe this huge sum of money.

Re: Many don't have $2,000 for a rainy day

#100

Post by noodle »

mattw wrote: post #87
noodle wrote: post #80

Earlier quoted context omitted.

credit cards are useful tools. i use mine and just pay it down monthly. if you have any plans on obtaining a loan/mortgage at any point in time, the easiest way to establish yourself with good credit is through actually using a credit card.

Everybody says this, but I've obtained three different mortgages in my lifetime and never had a credit card. In lieu of credit history, the bank has just asked for other evidence that I pay my bills, like statements from the utility company. Maybe I'm just lucky, but in my opinion, wanting a good credit score is a pretty bad reason to get a credit card.

how long ago were the mortgages and how old were you when you tried to obtain them?

i think the climate is different now. i have a friend who is reasonably fresh out of school and tried to buy a place, but got turned down for mortgages due to lack of credit history (and presumably a lack of "other evidence" as well).

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