5.23.16
The Following is part of an article that was printed in he Ventura County Star 5.20.16 ……
Most in U.S. don’t have $1,000 handy
Poll says 2 of 3 would struggle in such a crisis
By Ken Sweet and Emily Swanson
Associated Press
NEW YORK- Most of Americans would have difficulty coming up with the money to cover a $1,000 emergency, according to an exclusive poll released Thursday, a signal that despite years of recovery from the Great Recession, Americans’ financial conditions remain precarious as ever.
These financial difficulties span all income levels, according to the poll conducted by The Associated Press-NORC Center for Public Affairs Research. Seventy-five percent of people in households making less than $50,000 a year would have difficulty coming up with $1,000 to cover an unexpected bill. But when income rose to between $50,000 and $100,000, the difficulty decreased only modestly to 67 percent.
Even for the country’s wealthiest 20 percent households making more than $100,000 a year – 38 percent say they would have at least some difficulty coming up with $1,000.
‘The more we learn about the balance sheets of Americans, it becomes quite alarming,’ said Caroline Ratcliffe, a senior fellow at the Urban Institute focusing on poverty and emergency savings issues………
…………….Americans’ struggle to save isn’t new. Three CBS News and The New York Times polls going back to the mid-1990s – the most recent one done in 2007 before the downturn – show that a majority of Americans would have some difficulty covering a $1,000 emergency. The AP-NORC results also correlate with a 2015 study by the Federal Reserve in which 47 percent of respondents said they either could not cover a $400 emergency expense or would have to sell something or borrow money. ………………….
WOW !! That is really messed up. One thousand dollars really doesn’t buy much today, yet two thirds of Americans don’t have it. Most of us have not been able to save the equivalent of 1–2 weeks wages to set aside for an emergency? Almost half of us can’t come up with $400? Really?? This country is in big trouble if really hard times set in.
I wonder what causes this level of financial insecurity among so many. I am an hourly working class guy, and I understand what it takes to make a few bucks, and what it takes to save a little money. I could understand these numbers if they were a small percentage of our population, but these numbers are staggering. I know a lot of it is the financial problems of the last 8 years, and we have lost lots of good paying jobs that are not coming back. The inability to make more than you need to survive makes it pretty difficult to save money for a rainy day.
Yet even in households with an income of over $100,000 a year almost 40% of those households would have trouble coming up with $1,000 to handle an emergency. Obviously nearly all of those households should have the ability to save one thousand bucks in an emergency fund. Yet we must remember we live in a society that promotes instant gratification, and often punishes long term savers. We no longer reward savers with interest on their savings, and the average American does not do well investing. Prices continually rise and everything costs more even though the government keeps telling us that inflation is near zero, so the reality is that our money is constantly losing value since we cannot earn a decent interest rate. We are living longer and will probably outlive our money weather we save all our lives or not, especially considering the high cost of long term care. In fact, with the outrageous cost of all medical care today, one severe illness or accident can wipe out a lifetime of hard work and diligent saving in an instant. Is it any wonder that many Americans believe that it makes more sense to spend money than to save it.
Perhaps it is time for our lawmakers make it profitable and safe to save money. That is the best way to help Americans become self reliant and financially stable.