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So how does that contradict that "they don't have the money"?
The contention is not that 40% can't pay $400, somehow, some way - including borrowing and selling property - but that they don't have enough cash reserve to do it.
That 25% here have a credit card doesn't change the contention, or the picture. A lot of the denial above is aimed at the wrong statement.
But the fact that they don’t have that cash reserve, but could pay it in 1-3 months says something too, doesn’t it? At what point in the income curve do we say people are being irresponsible with their money if they have none in a savings account? Do we believe these other 25% that’d need a few weeks to pay it off are living otherwise frugal lifestyles? it’s more likely they are just spending it to spend it on dinners and drinks, a weekend trip, clothing, etc. I have friends that make over $100k, but have $1k/month shopping habits, eat out for dinner 4-5x a week, do drinks 2-3x a week, eat out for lunch every day, etc. Now maybe it’s not $400 for them, but maybe it’s $1k that they couldn’t come up with in cash today. I have others traveling to different continents 2-3x a year and complaining about their student loan debt in the same breadth. Is that a problem that’s reflective of economic hardship or sub-par decision making?
Isn’t that the point of revolving credit? To smooth over cash flow issues?
If the question were about a real surprise ($4,000?)... you have an argument.
But when it's about a relatively token amount ($400)... not at all.
And it's not about what OTHER resources some might be able to sort out some other way.
It's about the ability to have (get) the CASH. Right the F now.
Quote:
Originally Posted by mizzourah2006
But the fact that (some) don’t have that cash reserve, but could pay it in 1-3 months says something too, doesn’t it?
Nope. That's just laying out a different example of some other point.
This is the scenario:
It's a holiday weekend and something happened with the car... and it's gonna cost them $400.
If they have a VISA it's maxed out. They just paid the rent for June.
How do they get that car out of hock so they can get to work on Tuesday AM?
Last edited by MrRational; 05-26-2019 at 08:03 AM..
Given the way the question was framed I could answer two choices and likely would have. I would have endorsed both “Charge it on a card and pay it off at the next statement” and “pay cash” as options,
But I almost certainly would pay it with a card.
I think for most it would be rearranging expenses over the next few weeks to cover it and like I said I’d almost certainly never use cash in my savings, instead use the interest free CC loan for the month and pay it off with my paycheck.
It’s a poorly worded question and the fact that they allowed choose all that apply makes the #s look way worse than they are. Clearly there are people who are struggling, but I find it hard to believe 40% of adult Americans are living frugal lifestyles and still can’t pay off a $400 expense within a month. Hell when I was 27 my wife and I were completely on our own with a HH income of $35k in Orlando and we could have come up with $400 over a month for an unexpected emergency, we would have used a card and not done much socially for the next month, but we’d have been able to do it.
The real question that seems reasonable is the next one...Would the unexpected expense cause you to be late on other bills. 14% said yes and I believe that.
Last edited by mizzourah2006; 05-26-2019 at 09:01 AM..
Sorry for being uninformed, but why "most people no longer keep savings accounts"? Where they keep emergency found? In debit account? That's what are you saying? I didn't found any confirmation of this statement online.
I thought emergency found should be kept separate from checking account. Some people might have hard time to resist spending it.
That's what I'd figure too. We have a savings account, in which we keep the money for emergencies, for purchases planned in the near future, and as a parking spot for money we intend to invest elsewhere.
But the fact that they don’t have that cash reserve, but could pay it in 1-3 months says something too, doesn’t it? At what point in the income curve do we say people are being irresponsible with their money if they have none in a savings account? Do we believe these other 25% that’d need a few weeks to pay it off are living otherwise frugal lifestyles? it’s more likely they are just spending it to spend it on dinners and drinks, a weekend trip, clothing, etc. I have friends that make over $100k, but have $1k/month shopping habits, eat out for dinner 4-5x a week, do drinks 2-3x a week, eat out for lunch every day, etc. Now maybe it’s not $400 for them, but maybe it’s $1k that they couldn’t come up with in cash today. I have others traveling to different continents 2-3x a year and complaining about their student loan debt in the same breadth. Is that a problem that’s reflective of economic hardship or sub-par decision making?
IMO that'd be subpar decision making, ie, to spend to the extent of one's income and beyond, with no thoughts of saving anything in the event that lucrative job is lost, or some crisis happens, or just because one may really need it or want to retire someday. Those expensive luxuries you listed (as well as others) are sadly considered essential must haves, self-entitlement fostered by the crass commercialism and the "keeping up with the Jones" mentality of our current society. There's no room in there for saving, or so it would seem.
The accountant who does our income taxes tells us he has clients whose income is around $250,000-300,000, and they save nothing, and live paycheck to paycheck. That's hard for me to imagine.
Unless his entire net worth is in illiquid assets that just makes no sense to me. He may not want to pay for an entire bottle of meds but he can certainly "afford" to pay with his net worth of $4MM.
It’s not new, years ago or many century ago there was this very wealthy lady who couldn’t afford a medical procedure, she died rich. I can’t remember her name. But compare to today she would have about $150 million plus. There are people like that out there.
It’s not new, years ago or many century ago there was this very wealthy lady who couldn’t afford a medical procedure, she died rich. I can’t remember her name. But compare to today she would have about $150 million plus. There are people like that out there.
Hetty Green, The Witch of Wall Street. It had absolutely nothing to do with her being able to afford medical treatment, for herself or for her son, who lost a leg... it was simply greed and frugality carried to the level of a mental illness.
I'm not sure how statistically significant it is, but what about the immigrant family where both parents work minimum wage jobs to support their 6 kids? They are hardworking folks but just paying he bills can be a chore.
Of course it's a chore, but many of those immigrant families historically have worked hard enough, done without, saved money, weathered adverse situations and done whatever it took to better their status over the years to become solidly middle class, and even wealthy in some instances. And they provided great examples of work ethics, determination and discipline to their children.
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