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"Financial security has been elusive for millions of Americans since the Great Recession ended. A new report (pdf) from the Federal Reserve demonstrates one way that this insecurity can manifest itself for people.
As part of its October 2014 survey, the agency asked 50,000 people if they could handle an unexpected “financial disruption” costing them $400. Just over half (53%) said they could “fairly easily handle such an expense” by using money in their bank accounts (checking or savings) or by leaning on a credit card.
But for 47% of respondents, $400 was a tougher problem to handle. Within this group, 14% said they simply couldn’t cover it. Another 10% would have to sell something, 13% would have to borrow money from a friend or relative and 2% would have to resort to a high-interest payday loan.
This finding was buried within the Fed report that otherwise offered a rosier outlook on the state of Americans’ financial status."
Part of the problem is that the average American has to have all the latest gadgets and are buying left and right. So that makes sense that they would have to sell something. On my street alone, there are only two families that park in the garage of their single family homes. Everybody else park in their driveway or beside the curb. Reason: too much materialism got the garages stuff to the gills.
Is that really the problem though? How many "gadgets" can you buy? And would that be more for those abusing assistance, or working and making a lower wage?
A TV, or major 'gadget' would seem like a 1 time purchase. And you didn't mention any other factors into why they may have so little disposable income.
I don't know what ALLGOV is, but I think the result is not very accurate. It sounds like a website in search of a purpose. As with any survey, it depends upon who you are asking.
A bunch of homeless people? yes.
A bunch of recent college grads? yes.
A bunch of people with jobs? no.
A bunch of retirees, no.
I really wonder if that can be true at all? I mean $400? I can understand if it is $4000. Maybe it is just me.
I agree. I know I'm better off than the median but still - - I've probably had $400 surprise expenses four or five times this year. If 47% of people couldn't even survive one of these, I'd think the economy would be even worse than it is.
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