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Median income in this country is what - 45K?? 2K is nearly 5% of that. So if approx. half the country makes less than 45K -- why do you think the difficulty of having a 2K cash cushion is unbelievable?
Thats gross not net. Net would be around $24k. Using random numbers rent cuts it down to $12k. Utilities drop it to $8k. Food drops it down to $3k. Car payments drop it down to a negative number.
And I havent even gotten to fun stuff yet. Payroll Deductions Calculator
Tweak the numbers against your own.
The problem in the US now is as the income goes up, many also grow their expenses (bigger apt, better house, better car, more toys).
Thats gross not net. Net would be around $24k. Using random numbers rent cuts it down to $12k. Utilities drop it to $8k. Food drops it down to $3k. Car payments drop it down to a negative number.
And I havent even gotten to fun stuff yet.
For a New Yorker it comes up to about (depending on deductions) $32k. So using Craigslist for an apt it cuts it down to $18k. Utilities including cable bring it down to $12k. Food drops it to $7k. Car payments and insurace bring it down to $2k. College loans and it goes negative. Remember to have $2k you either have to be saving $40 per week or have a credit card with that amount, or higher, open.
Are we talking about a single person here? What city? Almost every number you are throwing out there is way more than I'd expect to spend. If you are choosing an expensive city shouldn't we use median single person income for that city?
Are we talking about a single person here? What city? Almost every number you are throwing out there is way more than I'd expect to spend. If you are choosing an expensive city shouldn't we use median single person income for that city?
Starting with a net of $34k for a single person, give us a realistic budget that gives you $2000 in cash savings and you cant be living at home. Most Americans are not Frugal.
Neil - totally agree - 45K is not very much to live on nowadays, and especially not if your trying to build up a nest egg (or an emergency fund). And I'm not 100% sure what the median income currently is in U.S. -- its been hovering in the 40's for a long time now, so I guessed 45K.... but my point was exactly that. How can anyone be suprised that its hard to save up $2K, and a lot of people haven't managed to do that?
Given the overall stagnation in wages over the past 30 years, I think its pretty miraculous that people have generally done as well as they have. Of course, a lot of that was due to easy credit - and we've seen what happens when economic instability occurs in such a precarious environment.
If you really think that $2K is "pocket money" and have a hard time believing that a large minority of citizens would have a difficult time coming up with that - then its been a long time (if ever) since you've been in the real world.
People who make $10/hour (which is substantially higher than our minimum wage) would probably have a difficult time putting 2K together. That would be 10% of their yearly earnings!!
People working at Walmart, Target, McDonald's, Kroger -- $10 would be about average. Many are making less than that.
Median income in this country is what - 45K?? 2K is nearly 5% of that. So if approx. half the country makes less than 45K -- why do you think the difficulty of having a 2K cash cushion is unbelievable?
The world is not full of people on the C-D message boards who plan and think and save up 6 months worth of expenses.
The world is full of people who live paycheck to paycheck and for whom one unexepected trip to the doctor can force them to take a payday loan.
If you have 2K as pocket change in your sock drawer - awesome for you and your family. But, go ask the single mom who works at WalMart as a cashier if she does? Or the guy stocking shelves? Or the person buffing the floor at night....
While I do not disagree times are hard, I think the lack of savings in this country is more a matter of culture than economics.
Being raised by parents that suffered through the great depression I was taught the value of self sacrifice in order to save money at an early age.
I began working at the lucrative wage of $1.65 hr. and have always found a way to save a portion of what I earned.
Somewhere north of 90% of all Americans owns cell phones and the monthly bills that go with them.
The average American eats out 4-5 times a week.
75%+ have satellite or cable service.
It is not that they do not have money; it is that they spend it foolishly instead of saving it for emergency or investment.
A large percentage of these same people also pay for their food with food stamps.
We are becoming a culture of "people from Wal-Mart".
Starting with a net of $34k for a single person, give us a realistic budget that gives you $2000 in cash savings and you cant be living at home. Most Americans are not Frugal.
If you are talking about a single person then your budget isn't realistic, it spends too much. You have monthly expenses:
That isn't a single person who is making any effort to live within their means and save anything, so yeah they won't have any savings.
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