More than half of Americans have less than $1000 in savings

originally posted by: queenofswords
a reply to: nOraKat

And yet that's an improvement over 2016, according to the article, when it was 69% that had less than a thousand in savings. 12% increase in one year is reason for some optimism.

Maybe people prefer to purchase real estate or other investment assets rather than stick it in a low-interest savings account where all it does is just sit there.

Actually, it just suggests that credit has been given more freely in the past year. I know I've certainly seen that. My total credit limit at the start of 2017 was $4,000. With no changes to my cards it's now $45,000. These questions usually ask about credit availability too and include that in savings as emergency funds.

originally posted by: annoyedpharmacist
Same here. I have a retirement account and investments. Savings accounts are a joke.

But presumably you have checking and credit accounts? Those are considered in savings.

originally posted by: Aazadan
But presumably you have checking and credit accounts? Those are considered in savings.

Unless you can point out where in the sources they are considering these I will take their multiple statements of 'savings account' at face value.

originally posted by: Skywatcher2011

originally posted by: nOraKat
According to several articles, more than half (57 %) of the US population has less than $1000 in total savings in 2017, and 39% have $0 savings!

Are these stats taken AFTER BLACK FRIDAY store sales?

Should it matter? Are you claiming the responsible thing to do is to spend your emergency fund on mindless consumerism for the Christmas season>

a reply to: projectvxn

The main point of cash savings isn't the interest rate you earn. It's that it earns something, and when you have to spend it, you're not paying any interest, compared to normal emergency funding like credit which will hit you with a bunch of interest.

Rest easy everyone....

Trumps new trickle down economic model will increase everyone's saving account bigly, believe me!! It's always worked in the past.

originally posted by: ttobban
People that don't have any savings, first and foremost, find a mentor...

Not watching a 45 min video to make a post, but if you listen to some of these other guys like Dave Ramsey, the first thing they'll tell you is to earn more money. It's no coincidence that the percent of people who have nothing in savings is the same as the percent of people who aren't bringing in enough money to do anything with it. I've heard Dave Ramsey on multiple occasions, simply admit that his system won't work for you if you don't bring in enough money... generally that's 3x minimum wage.

If your income is less than that, the best thing to do isn't to invest... it's to work another job.

originally posted by: Lucidparadox
How are people supposed to put money into savings?

Standard rent for a 1 bedroom for most of the country is 600-900 a month.

Car payments are 100-350 usually

Phone bills are 50 to 100

Insurance 100-150

Gas.. Electric.. 150

Food $400 a month at least

Internet.. 50..

That right there is 2100 right off the bat.. not including any student loan bills or recreational money

Most Americansmake exactly that or.right around it. Not kuch room for savings.

A healthy budget should run you around
Housing 30%
Utilities 5%
Food 10%
Transportation 10%
Health 5%
Insurance 10%
Personal 10%
Recreation 5%
Savings 15%

So if you're making $30,000/year, which would be about $15/hour, you're looking at about 24,000 after taxes or $2000/month. So your budget would look like
Rent - $600
Utilities - $100
Food - $200
Transportaiton - $200
Health - $100
Insurance - $200
Personal - $200
Recreation - $100
Savings - $300

So that's basically a roommate. A car payment of $100 or less per month, and enough money to go out once a week and spend $25 at the movies or something.

a reply to: Lucidparadox

Mortgages include all types of building repairs and insurance. Most people who rent places are happy to break even until the property is paid off. You don't get to build equity, but it does tend to be a little cheaper.

originally posted by: AugustusMasonicus
Define 'affordable'. As a home owner I want my property to continually increase in value, that's one of the reasons why I purchased it.

Property forever increasing in value is unsustainable though. Eventually it prices to the point that no one can afford it. Furthermore, there's a lot of land out there, it may be a finite quantity but supply is much higher than demand.

Land should at best hold value relative to the value of the currency. Ideally 1000 hours of work purchases it today, and 1000 hours of similar valued work purchases it 10 years in the future.

originally posted by: andy06shake
a reply to: nOraKat

"More than half of Americans have less than $1000 in savings"

And chances are with Christmas on the horizon, that $1000 in savings will be gone after the 25th.

If this is progress one has to wonder if life in our first world nations is really all its cracked up to be???

If you can't afford Christmas presents without wiping out your savings, perhaps the financially responsible thing to do is to not participate?

originally posted by: orionthehunter
I think the term savings must refer to a specific account type called savings where banks pay you almost nothing. I looked up average IRA amounts for Americans and the averages ranged from around $13,000 for a 20 something up to about $200,000 plus for a 70 year old. I did not look up 401k's unless that was included.
www.fool.com...

I will admit that I have had zero in a savings account for many years. I have checking accounts and Ira accounts. Who wants a savings account that pays almost nothing? Not many.

Retirement accounts (which are also much too low usually) have huge penalties for early withdrawl. They cannot be used to cover things like a $400 car repair emergency which is what the article was referring to.

originally posted by: AugustusMasonicus

originally posted by: Aazadan
But presumably you have checking and credit accounts? Those are considered in savings.

Unless you can point out where in the sources they are considering these I will take their multiple statements of 'savings account' at face value.

That's why I gave my own source which included them, and had similar numbers.

a reply to: Aazadan

The savings model doesn't account for inflation, therefore making a savings account a liability instead of an asset. Because the lack of interest fails to meet the rate of inflation, one actually pays money to keep a savings account.

If it's an emergency fund and access concern, it only takes a couple days to move that emergency fund out of a low risk, dividend yielding stock into cash holdings. Take a stock like Arlington Asset Investment Corp... it is currently trading in the low of the 52 week average for around $12 a share of which includes a 19.75% dividend paid annually. So think about that for a minute... if you take that $1000 emergency fund, it yields almost $200 just resting. That stock could fall $2.00 and you're still going to have more money than the $1,000 after one year. Make it 3 years without needing that emergency fund, with reinvesting those dividends back into the stock, and that $1,000 will grow nearly 50%.

Beyond a couple hundred dollars in cash in pocket to pick up for something unexpected, there's nothing that doesn't warrant my unused funds working for a path of compounding. Even holding paychecks in stocks can earn a few percent gain in a month that pays for the cable bill say. There are months where I pay nothing to cover living expenses, because I pull from my investments to cover monthly bills... pulling from an investment but funneling my entire income through them creates the man made savings account of the 21st century. The ultimate freedom of the American dream is the path to learning to become a producer of interest, instead of a consumer of interest.

Hmmm... let the worth of each dollar devalue with inflation, or let dividends and compounding interest slowly open up the channels of purchasing power??? Seems like a no brainer to me...

a reply to: Aazadan

I don't watch these videos... I play them in another tab in the back ground as financial music I guess you could say. It's not about latching onto a particular person's advice... it's about thinking about finances as a new language to learn. The main point in that video I wanted to be heard was about the UPS employee who never made more than 14,000 a year became convinced to save after being made aware that we'd likely find a way to adapt to life if a 20% tax was forced on us... it may suck, but we'd live through it. That person saved that 20% weekly... it grew to 70 million dollars over the years.

Once compounding interest earns pushes past expenses for the month, entire pay checks are put right into investing... the whole check works for me through the week and year... almost always upwards. My words here are to spark that thought... the thought that people are saving their entire paychecks weekly... and it starts with starting as soon as possible, without delay. It has zero to do with Trump, tax levels, or inflation... it's squarely about our individual efforts of what we consume as a financial diet.

a reply to: Aazadan

Or, one can put money into a Roth IRA, of which contributions are exempt from penalty restrictions. After the money gets invested in the stock market and one cashes out gains in retirement age... all that invested money will be done FREE OF TAXES.

Roth IRA's are a conduit to trade stocks FREE OF TAXES... THAT'S AN ADDED 20% OF TAX SAVINGS COMPOUNDING YEAR AFTER YEAR!!!

Be wary of fees attached to 401k's... a difference of 2-3% commission on retirement accounts are catching people off guard... yielding approximately 50% decreased gains for equal gains but paying the higher commission fees. I learned that little tidbit of $1,000's earned by listening to one of those long and mundane videos that are so hard on the ears of posting here... the one I included in this thread in fact.

a reply to: nOraKat
Savings accounts in some banks actually cost you money to keep it there. The interest paid is zero. Investing it is smarter. Depending on your age you can invest and have your account manager pull out money as you need it. That is how retirees do it. I had a sizable sum in CD's it made diddley squat. Turned it over to an investment firm and wow made me 8% to date. Research banks and what they can do with your money. It will shock you.

a reply to: Ansuzrune

Even low income you can make a couple hundred dollars a year opening new bank accounts and just collecting the sign up bonuses. Return seems to be limited to about 4% there, otherwise people would borrow cash from low interest credit card offers.

originally posted by: Aazadan
Property forever increasing in value is unsustainable though. Eventually it prices to the point that no one can afford it. Furthermore, there's a lot of land out there, it may be a finite quantity but supply is much higher than demand.

I only need to increase while I own it. What happens after is irrelevant to my investment.

originally posted by: Aazadan
That's why I gave my own source which included them, and had similar numbers.

Your source is not the Original Poster's source which is what my comment that you replied to was regarding.