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Most Americans can't afford a $1,000 emergency expense

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posted on Aug, 11 2011 @ 08:45 AM
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Most Americans can't afford a $1,000 emergency expense


money.cnn.com

NEW YORK (CNNMoney) -- When the unexpected strikes, most Americans aren't prepared to pay for it.
A majority, or 64%, of Americans don't have enough cash on hand to handle a $1,000 emergency expense, according to a survey by the National Foundation for Credit Counseling, or NFCC, released on Wednesday.
(visit the link for the full news article)


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posted on Aug, 11 2011 @ 08:45 AM
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Well, this is not the standard fare for "alternative" news, since it is US-centric and about the mundane matters of daily life... but... recent conversations with others compelled me offer it up for a discussion....

Let's get this out of the way:

- No, most Americans are not stupid and lazy, unprepared, libertine profligates, spending on unreasonable things and foolishly ignoring the future

- No, Most Americans are not living beyond their means, driven to excess, or simply inclined to party like there's no tomorrow

- No, Most Americans don't feel they are entitled to free money (which is not to say they are stupid enough to turn free money down.)

The problem I see is that the means upon which Americans has been living has been withdrawn, the cost of living increases from year-to-year are never met by most employed Americans' "cost-of-living" wage increases. And the politically-driven social engineering done by the media remains incredibly focused on the materialistic consumerism paradigm.


"It's alarming," said Gail Cunningham, a spokeswoman for the Washington, DC-based non-profit. "For consumers who live paycheck to paycheck -- having spent tomorrow's money -- an unplanned expense can truly put them in financial distress," she noted.


Make no mistake, the average American citizen is utterly alone in coping with this situation because once you are living paycheck to paycheck (like most of us) there is no "preparing" anymore and we are simply staged for economic sacrifice.

money.cnn.com
(visit the link for the full news article)


edit on 11-8-2011 by Maxmars because: (no reason given)



posted on Aug, 11 2011 @ 09:02 AM
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reply to post by Maxmars
 


While I agree with most of your post, I believe that there are ways to trim expenses and still be able to put some back for a rainy day. It takes discipline, but it can be done. I started a thread about frugal living, and there is a lot of good information in there for those looking to stretch their dollar.

Frugal Living



posted on Aug, 11 2011 @ 09:08 AM
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Only 36% said they would tap their rainy day funds for an emergency. The rest of the 2,700 people polled said that they would have to go to other extremes to cover an unexpected expense, such as borrowing money or taking out a cash advance on a credit card.


How does 2700 people account for a balanced view of a country with over 300 million citizens. I'd be very curious what the age range, race and educational level is for those polled.

It's interesting because I'm none of those things you said (Lazy, unprepared, spending beyond my means, driven to excess, or entitled to anything, etc.). I'm a 31 year old college drop out, married, home owning, father of two privately educated children who is financially responsible and actively working to be debt free. I guess that makes me above average.

The problem here is two things. One, American depend WAY TOO MUCH on credit cards. We charge everything and run up enormous bills at incredible interest rates, because we think it's the only way to live. And Second, No one is taught how to be financially responsible anymore. No on appreciates the value (metaphorically) of a dollar, again, because of the credit card. Money is no longer a tangible item. It’s imaginary numbers flying invisibly over our heads. We hear figures like Millions or billions or trillions thrown around by the media and the government like it's pennies and nickels. Our understanding of money has become unrealistic

edit on 8/11/2011 by amaster because: Spelling



posted on Aug, 11 2011 @ 09:27 AM
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That's truly scary - 60% of all Americans could not come up with $1,000 in an emergency and another 35% have zero savings for retirement.
You're right of course about wages not keeping up. I worked part time for several years for 2 different companies and never received a raise. Not that I didn't work hard or do "extra" - I always did but that never seemed to matter to management.
Some states, like Virginia, are a bit too business friendly and in the process disenfranchise the workers entirely. Much to my disappointment did I discover that verbal contracts have no legal standing here. Employers can make promises (verbally) of raises, reviews, bonuses etc and then completely ignore you about it later.
People in specialized labor ought to be able to bargain somewhat but no tack I tried ever seemed to work. 8 years with no hourly raise?!! Thank you so much former employer of mine.


I'm sure I'm not alone either and that's the problem, Most working people have no disposable income to begin saving with. Fortunately for me I'm married and my wife has had a successful career though not without many bumps in the road. We actually have retirement savings and money for emergencies. Then again we haven't taken a real vacation in 10 years or bought anything extravagant for ourselves like big screen TVs or new cars.
We keep the old stuff running for as long as we can when it comes to cars and appliances.

My solution was to start my own business and stop working for others. It's not easy to do but I know people who do yard work for cash that are doing quite well right now - of course you have to avoid paying Uncle Sam his full share or you starve.

The middle class is fast disappearing in the US. When they fall it's all over for everyone else. There will be nobody left working to pay taxes to keep government running or the welfare checks going out. Both the entitlement crowd and the government are in for a rude surprise. That's why they will have no choice but to declare martial law and take over all means of production and supply (Nationalization/Communist takeover) .
Even that effort will fail due to the sheer weight of bureacracy who, in it's insatiable greed will destroy everything it touches. No doubt war will follow quickly as stealing from neighboring countries will be the only viable option left.

Without a middle class there will be no growth or recovery.
As it stands right now, we're screwed.



posted on Aug, 11 2011 @ 09:59 AM
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S&F as aways...

Look at me 50 years old semi retired... One Grand wouldn't be to hard for me to get my hands on... but if it's more...
I have a little money squirreled away but it's in places that are not so easy to get at... mutual funds bonds CD's... sure I can borrow against them if I need too... I try real hard not to as the interest on that loan will be more than my dividends...

if I needed like $7,000 in a hurry... it would take me a week at least to get my hands on it... and it's my money to begin with...so yeah I can see where this could be a huge burden on folks



posted on Aug, 11 2011 @ 10:34 AM
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I find myself considering that of the 'emergency' expenses most likely to devastate someone's budget would be along the lines of unexpected medical or even dental costs, loss of transportation, 'down-sizing' or other loss of employment, and unplanned legal liabilities.

For someone who is already close tot he brink, such things can set them behind their ability to recover, and many Americans choose to incur credit card debt to overcome them, hoping that they can pay down the event's impact over time. Obviously, such a strategy doesn't work very consistently.

Essentially, the problem with those who do not aggressively seek to be frugal, is that when they are not immediately threatened, they fail to plan or prepare for the unexpected. At that juncture, you sort of are leaving yourself open for a ride which includes the eroding of their quality of life, and the increased pressures that financial woes can place on them. It can be a spiral of failure... and once there, it appears that the current dogma for many is "Screw them if they didn't do what they needed to do when they had money." And the further stigma of seeking a government handout to help recover can be a contributing factor to financially-induced psychological depression.

Interestingly the process of 'hoop jumping' to justify your request can be equally daunting and depressing as well. I suppose that it represents a form of economic evolution, culling out those who are not properly postured for things they may not consider would ever happen to them.

I am the kind of person who does tend to feel for these economically damaged people, but I understand the lack of patience of those who insist that the ideal of 'this is America and anyone can achieve and succeed here.' No one wants to feel bad; even if it is on someone elses behalf....



posted on Aug, 11 2011 @ 11:26 AM
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Originally posted by Maxmars

Well, this is not the standard fare for "alternative" news, since it is US-centric and about the mundane matters of daily life... but... recent conversations with others compelled me offer it up for a discussion....


I do not think it is "US-centric" at all! Situation is similar in all western countries even in Israel. Socioeconomic status of middle class is worsening everywhere, countries which did not have underclass for many decades are now starting to develop it. In many European countries there was no trouble to get decently payed temporary FULL time job if you could not find one in your profession. Now it is really hard. Class division is sharper and sharper year by year, quality of public schools is dropping, fees in private schools are rising. Even responsible, educated parents have big trouble to give their offspring what it needs: good food, good healthcare, good education and few ours of attention every day.
If this will worsening (and it will) then even countries like Germany will develop underclass and should prepare for riots like we witnessed in England recently.
As I understand it (too) rich revoked social contract which was working well last 60 years and declared war on everybody else.



posted on Aug, 11 2011 @ 11:35 AM
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reply to post by amaster
 


Working for a credit card company, I couldn't agree more. Im a canadian and the view I had into the credit world of america was a surprise for me. We like to live off cash up here.....debit cards replace credit cards, and we use them for emergencies for the most part. I saw people with 7+ credit cards, all with different limits and all with similar purchases....how many times do you really need to eat out? How many coffees you need to buy in a day? Can't take a bus instead of filling up the tank? Why you paying off credit, well, with credit? You actually need 3 vehicles? Leather furniture is a necessity?
In the 5 years I was there, I would of loved to see grocery purchases or maybe that plumber that you had to call, but no it was convenience in a card and you could worry about it later. Stop feeding corporations, stop getting seduced then raped by credit card companies, live more on cash, and make some compromises. I quit that evil place for a reason, they eat your soul........



posted on Aug, 11 2011 @ 02:26 PM
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You know?? I can not remember a time in my life when a $1000 emergency would NOT be a terrible experience for me. We were raised like this, as well, despite both Mom & Dad working ALL the damn time until we ALL were grown.

In my 20's I fell into the CC crap and learned very quickly that this was NOT the way for me to go - I am pushing 60 now and have been becoming further, and further, away from using anything except 'cash on hand'. My plan is to, totally, close 1 bank account - after mother is gone - and just use Mother & I's bank because it can be found anywhere. At least, until I decide where I will be moving. If I do keep the account open it will be to cash pay checks and then drawing MOST of the money out ASAP.

Over the decades, I have moved more, and more, to a cash only type of living. It seems when I keep all my cash, I tend to spend less compared to that 'stupid' Debt Card. Hell, I'd rather go to a Stop & Shop and pay .89 for a money order to pay me utilities, than write a bank check to them.

What seems to amaze me is all the college age kids that live in my complex - with brand new vehicles, apartments - everything appears to be paid by mommy & daddy. Everything seems just honky dorky to these kids who have NO clue what life - or making it ON YOUR OWN is like. They seem to live in some type of fanatsy world that is, one day, going to really bit them in the arse!!

The last several pay checks I have been totally pulling all I can out in cash. Just a few $$ to keep account open, put my cash is in MY hand and I am, finally, starting to save some money. Of course, I will get mother's Life Ins ($3000) and her cremation is already to go - just as she wants. So, when she passes (soon I believe), I will downgrade to an effeciency apartment and selling ALOT of great stuff we have collected over the years. Then I have 3 different places I can go to work at and will take the least stressful (while still mourning mother) and save as much as is humanly possible so I can get to someplace I really want to be. I will do that for only about 6 months and sell things I cannot place into my car and off my dog and myself will go. Far enough away from major population centers, but a scooter ride into a friendly SMALL town for supplies and maybe a PT job caretaking someone - I have done this will 3 family + mother and should get a great referral from my current place of employ.

I just do not think it is right to try to place everyone into the (lazy) category just because we cannot afford the very best and seem to survive from check to check. I use to make alot more $$, now I make less than half what I was yearly. I am aware I am part of the growing number people, in the US, that has found themselves in low middle class to low class concerning finances. I only see it becoming much more difficult for more, and more, people as the economy continues it's down fall - and it will!!






posted on Aug, 11 2011 @ 02:28 PM
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From what I understood when I saw this on the news ( CNN) was that, its not that most can't afford it, it's just that most, don't bother to put it aside and therefor,don't have it when they need it.



posted on Aug, 11 2011 @ 02:32 PM
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I've tried saving money, but some months it just doesn't work, and I end up with a pittance in my savings account. Everyone has a month where the electric bill is 50% higher for no explainable reason, and everyone makes "errors" with their bank overlords, resulting in huge fees. Lately, these bumps in the road are becoming a guaranteed setback.

I've counted it out, and if I lived on my own (which I don't anymore), then I would literally not be able to spend for any "luxuries", like a stipend for snacks or a movie, or game etc, if I wanted to save. Which means I'm putting money away for virtually nothing. The 'save a penny for a rainy-day' and "fat piggy-bank" ideals are over. This is a holdover from the baby boomer generation.

The dollar is losing value as it sits in your savings, every single day. The more it stays in there, the more useless it becomes.
edit on 11-8-2011 by SyphonX because: (no reason given)



posted on Aug, 11 2011 @ 02:51 PM
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reply to post by haarvik
 


And how is that possible on minimum wage? I bet you don't live off of minimum wage. No, because it is utterly impossible. It is impossible to save a damn thing when being paid minimum wage an have a family of say five in total, including adults.



posted on Aug, 11 2011 @ 03:02 PM
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I already live frugally. Compared to how I have lived in the past though I feel rich because I have all my basic needs met, but nothing left over. I don't have many clothes, I could wash them all in two loads of laundry, and 3 pairs of shoes, summer winter and dress. I just don't see the point in having more than that. I may spend a small amount more on making sure any meat I buy is free ranged, grass fed, organic, but I grow my own veggies, plus the extra I spend I save on medical bills from eating healthy. My only real splurge is books, but I have had to curtail that in the recent months. There is no where for cuts other than the books I mentioned. I even washout and reuse sandwich bags and wash and clean tinfoil if at all possible.

In this economy people are doing the best they can. I have thought about going back to school but for what? There are no jobs in my area outside government and the medical field, which I am already in. I talked to a career counselor and found out that careers like medical billing and pharmacy technicians are only paying $9 and hour in my area. I am better off sticking with the job I have. I have heard a lot of businesses have gotten away with paying training wages for most of their employees and when they have to move them up to minimum wage they let them go. Benefits are unheard of. In a world where people will take any job they can get, no one has to offer benefits.

Its no wonder people have no money for emergencies.

I do save however, I save all my change and anything recyclable that I can get money for. That is my savings.



posted on Aug, 11 2011 @ 03:13 PM
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My deepest concern is about the media's consistent portrayal of financial distress as a 'fault' in the behavior or character of the person.

Perhaps it's just my own ego (being in an uncomfortable spot myself) but I seem to meet and learn that many - if not most - don't get to this point out of stupidity and lack of competence in life-skills.

It's sort of discouraging to see that if I lived in a different state or region I could make it on my salary... except in those regions people earn 10 to 30% less than I do for the same skill-set and experience.

Don't even get me started on minimum wage... the single most boldfaced affront to anyone trying to scratch out a living in this country (especially nowadays.) Yet the affluent insist that there should be no minimum wage, or it should be even less because that's is what's killing American businesses. Minimum wage hasn't destroyed the billion dollar enterprises of Walmart, McDonalds, or other such mega corporations, so I'm not sure I can blindly accept the reality of such a statement.

Sadly, employers seem now to mostly expect gratitude as well as labor for the vacancies in employment that get filled. It appears that a labor class is being outlined for the nation. Well, all I can say is that those who fail to see the evils of excessive profit-taking can only cry out "capitalism" as their dubious moral shield... while the rest of us who can only exchange our efforts for wages become steadily poorer at every turn.



posted on Aug, 11 2011 @ 03:15 PM
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One of the biggest issues in America in regards to income is the breakdown of family.

In many nations around the world, families are large and well networked. In the US, many families are often separate, broken and many individuals find themselves on their own without any support.

There is no patriarch/matriarch over the family and no support. This forces people to try to make it on their own and live paycheck to paycheck at a very early age. This keeps the family from pooling resources and prevents them from networking.

Many immigrants who come to the US do the opposite and quickly develop businesses and wealth, they pool resources, there is often an overall patriarch or matriarch, and they network constantly.

Among wealthy Americans, this behavior is also practiced to an extent.

Average Americans need to relearn and adopt this lifestyle, if they want to survive and thrive.



posted on Aug, 11 2011 @ 03:17 PM
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Originally posted by Maxmars

NEW YORK (CNNMoney) -- When the unexpected strikes, most Americans aren't prepared to pay for it.
A majority, or 64%, of Americans don't have enough cash on hand to handle a $1,000 emergency expense, according to a survey by the National Foundation for Credit Counseling, or NFCC, released on Wednesday.
(visit the link for the full news article)


I'm also willing to bet that 100% out of that 64% owe more on credit cards than they have in cash/back accounts, scary. Oh, but they all walk around with their iphones and $150 monthly cell phone bills, but wouldnt have enough money to pay for surgery if they got in a car accident while texting on those phones.
edit on 11-8-2011 by djtek because: (no reason given)



posted on Aug, 11 2011 @ 03:38 PM
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reply to post by ldyserenity
 


You're right, I don't. However, not too long ago I was out of work for nearly a year. I found ways to make things work, and was able to save a small amount. It gets creative, that's for sure, but it can be done. Ever watch extreme couponing? great ideas there if you watch and organize your grocery shopping. Right now, as an example, our grocery store is have a buy one get one free on Perdue chicken breast. I have a coupon for $4 off. So when I buy them, I will only pay about $1.50. there are ways to shop cheaply and feed a family for less, but you gotta be creative and diligent.



posted on Aug, 11 2011 @ 03:51 PM
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I agree with this news. IM one of them. Its not suprising news at all. The system is designed to take yuor savings, what you have. It forces you to have to go out and have a 2nd job jsut to put food on a comfortable level on your table. And im sure, weve all goine through numerous car repairs, the labor gets ya, more frequently becuase todays cars are plastic, nitrile rubber and aluminum. thas more money spent. My city, as metroplitan as it has become, has history of not filling in potholes, yet spends its money on bringing in corporate business. i cannot tell you how many struts ive been through in the past 10years, becasue of the craters* accidents watiing to happen. They way i see it, its blatant neglegence from the city, and they owe me or should have paid for them. Im sure some of you have similar situations.
Watching a michale moore documentary, capitalism a love story, and my grandmother, as she grew up in my city through the 1930's to late 90's..money back then got you alot, yuo had an untouchable pension, houses were consideered expensive back then, but not half a million for a basic setup! canned food was cheap, meat has always been on the expensive side, not including hamburger. People could buy anew car every 2 years or so, becuase they had sustainable salarys* the only real ones with sustainable salarys to date, are financial advisors, lawyers, successful real estate people, CEO's, obviously, and politicians who have made money off corporations. Cost of food has gone up rediculously, on commercial crap no less..coffee for sure, ciggarettes are now $9.45 a pack here, but some stores sell em at $8.01 after tax. gas goes up ect ect ect property taxes, ect ect u get the idea.....and without making the extra money to cover it, its one or the other now...yuo can ea, but cant do your oil change* yuo can buy yuor house, but not the car. You can buy the computer, but not the speakers...and thats what its boiling down too. Obviously, it has.
The system needs to get us back onto a fair salary system, if all its gunna do, is tax us like king george of england, in order to go out and buy things, even basic necessitys for that matter. sorry, but its true. as long as we accept, as taxpayers, and legal resdients, to just lay back and live in this selfish greedy CEO system run by the banks, we will never have enough money to go out n buy, as they want us too. we should have the right to have a comfortable life and job and salary. alot of that has been eliminated.
GM moved outta detroit, and look what happened. mass layoffs, allin favor of moving thier plant to mexico, cheap labor. who benefits? the CEO and vice president for sure...xtra bonuses and salarys. the employees? their gunna take job thier, as most of central america, is poor anyways, hence forth 3rd world country. maybe our leaders are in fact, trying too make it, so we all have no choice, but to move next to some river, build shacks made of whatever plywood was stoeln or found, all ontop of eachother, pollute the river, and drink form it a well as bath as well, while THEY, get to have the showers and tile roofs. oh and electricity for that matter.



posted on Aug, 11 2011 @ 03:59 PM
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It's all relative - even relatively well-to-do people can have a cash-flow issue. My husband and I have almost 1 1/2 million in 401Ks. We make good salaries, but with college for two kids, we've gone through most of our savings. So, if our savings gets down do a couple of grand after we make college payments, does that mean we are poor? We build it back up a bit, but another semester rolls around, and we are broke again. We've been pretty much paying for the running of three different households and four different cars. This stuff costs sooooo much money.



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