40% of Americans can't afford $1000 for an emergency!

[Dom]

Do you think it's true that 40% of americans can't afford $1000 for an emergency? And do you think it's a similar percentage over here in the UK. If true it's a dire statistic that's for sure! 

[shawy2510]

I would say its similar or worse. I have friends who don't have a penny to their name.

[GBStacking]

Most of my friends are reasonably financially savvy, but i do have a couple that would have to seek a loan if an unexpected bill of only £100 came up! They live hand to mouth through a combination of a relatively low wage and poor financial management. I sat down with one friend once and tried to help them work out a budget plan. The plan i proposed still allowed them cigarettes and a Friday night in the pub each week, just with a reduction in volume and some compromises elsewhere. In the end, i couldn't even persuade them to give up their takeaway coffee from the petrol station every morning (they went to work with a big flask of coffee anyway). I gave up at that point.

[Fadeingstar]

I seem to remember a news article from a few years ago saying around 25%-30% of Brits have no savings or other funds to fall back on in an emergancy a quick google found this but it is from 2016. As with all reports like this even from that bastion of impartiality that is the BBC need to be taken with a kidney crippleing pinch of salt....
https://www.bbc.co.uk/news/business-37504449

But on a more serious note I tend to feel that financial literacy is not taught enough to young people. I am 28 and I do not remember a single lesson at school regarding budgeting or what an interest rate is etc. Maybe that is because I went to a state comperensheive and had other things on my testosterone filled teenage mind than how inflation will mess with interest rates and what the gold to silver ratio is.

I also think that has been a shift in society to more spending and less saving. My parents and grand parents were taught the importance of saving and looking for the best deal and only buying what you need when you need it. These days when I go to the petrol station I see people I know in £50k cars that they pay through the nose for each month topping up with £20 worth of petrol because that is all they can afford. My sister will buy a dress online and wear it once then never wear it again. Recently I helped her move some furniture around and she was throwing away clothes she has never worn that still had the tags on!

For some people money "burns a hole" in their pocket and they want to spend it and I aswell do get that feeling at times so I spend my money on precious metals and do keep what I feel is enough money in the bank that can be accessed in a crisis aswell as a credit card if this are truely dire.

 

[YorkshireStacker]

The following link has some interesting/terrifying reading:

https://www.nimblefins.co.uk/savings-accounts/average-household-savings-uk

It goes into a lot of detail about household savings, saving by age, amount saved each month and a whole lot more, but "The median household gross savings in the UK is £12,500 (up from £11,000 two years ago). But 25% of households have less than £2,100 saved"

[Lyrinn]

When we see people from 20-40 struggling to get onto the housing ladder, I'd say that the number is much higher, especially when people across the west have been living on credit card debt for decades, living well beyond their means.

With inflation increasing energy costs by upwards of 100%, as well as inflation on food items being closer to 15-30%, I'd say that this number is going to only get higher.

[Martlet]

In the modern world people tend to buy things, spend everything earnt rather than save.  Product of decades of good times and state welfare. 

 

[Minimalist]

5 hours ago, Dom said:

Do you think it's true that 40% of americans can't afford $1000 for an emergency? And do you think it's a similar percentage over here in the UK. If true it's a dire statistic that's for sure! 

I genuinely believe its worse in the United States than here in the UK.

But without doubt, almost half (estimate of around 45%) of working adults in the UK dont have much saved. Majority of the adults have little savings or use a form of debt, easily over 60%.

[Minimalist]

4 hours ago, Fadeingstar said:

I also think that has been a shift in society to more spending and less saving

Due to monetary policy. 

[Minimalist]

4 hours ago, Fadeingstar said:

These days when I go to the petrol station I see people I know in £50k cars that they pay through the nose for each month topping up with £20 worth of petrol because that is all they can afford.

👀😂😳

[Tn21]

At the end of the month when you receive your pay cheque it is like finishing a marathon, (not that I have ever done one, but you know what I mean). As a result of this we want to treat ourselves and buy something/spend the fiat on something that will provide some gratification for the hard work we put in during the month that has gone by. In a way we cant really fault people that go out and enjoy their funds as they are entitled to spend their money however they wish. 

I will hold my hands up and confess, I used to spunk money, but with age and maturity the dynamics behind living change each year. Pms enabled me to treat myself with the paycheque in a more sustainable way. 

 

in terms of savings, I equate the metals as a savings mechanism. 

 

At the end of the day life is short, I have admiration for the folks that go out and enjoy their life with their funds. 

Edited February 21, 2022 by Tn21

[MancunianStacker]

5 hours ago, Dom said:

Do you think it's true that 40% of americans can't afford $1000 for an emergency? And do you think it's a similar percentage over here in the UK. If true it's a dire statistic that's for sure! 

Yes, I’m seeing mortgage applicants bank statements and they have £3,000 going in each month and £2,999 going out each month every month for the last 3 months and for some reason they don’t understand why a mortgage lender won’t lend to them on their bigger mortgage request.

Think like a bank, if you saw that would you let them borrow based on a new £750 per month additional repayment? If they were saving £750 per month easily, then it’s a no-brainer!

The guarantor mortgages are increasing in popularity now, I haven’t done any for 3 years and had two enquiries on them this week.

[Roy]

6 hours ago, Dom said:

Do you think it's true that 40% of americans can't afford $1000 for an emergency? And do you think it's a similar percentage over here in the UK. If true it's a dire statistic that's for sure! 

I think that's probably true.

But on the other hand, there's perhaps 10% of Americans that could drop $1000 on a meal or bar tab and not bat an eyelid. The disparity is rather shocking!

[Bigmarc]

1000 bucks doesn't seem a lot of money for an emergency. I was in Dominican Republic once and it cost me £1500 to treat 2 kids with ear infections. I claimed it back at a later date but I suppose you could class it as an emergency. I don't think I have ever had an emergency in the UK. Dental maybe. 

[Dom]

I couldn't believe it when I heard 40% cant afford a grand but in this day and age I think it's most likely true. 

Many people blame the younger generation for not saving which is true somewhat, but the bigger elephant in the room is the masses purchasing power has been eroded over decades of cheap 'money' printing and secretly taxing us via inflation. Inflation really is the dirtiest tricks they pull on the masses because as Keynes said "not one man in a million understands inflation". I think one in a million is a bit exaggerated but 90% of my friends and family don't seem to really understand why they are getting poorer. 

[Minimalist]

1 hour ago, Dom said:

I think one in a million is a bit exaggerated but 90% of my friends and family don't seem to really understand why they are getting poorer. 

My mates think im some sort of maniac for explaining the monetary system to them. I have experienced the traditional denial of "Away ye go" "They (banks) cannae do that" etc

Too many people are thick, conditioned to the point of brain damage and outright refuse reality. Sad, but its true.

[Rains]

On 21/02/2022 at 17:02, Dom said:

Do you think it's true that 40% of americans can't afford $1000 for an emergency? And do you think it's a similar percentage over here in the UK. If true it's a dire statistic that's for sure! 

Honestly its probably higher most people i know have money for bills and thats its if they need something its credit\borrowed 

[bluffer]

as someone else mentioned, a lot of it is generational.  it depends when you grew up, 60s, 70s, even 80s to a large extent you saved until you had the money to buy something.

 

nowadays, i think a lot of it is down to twatter, instagrime and mawbook with folk showing off the latest cars, bags, fake tans, holidays, boob jobs etc and thats just the guys!  all these "inspiring influencers" who probably eat beans on toast in a bedsit but pretend otherwise are a bad example to the idiots who walk amongst us. Come my revolution, they will be first against the wall!

 

realisation that you were stupid spending £X on whatever, normally comes through age.  With this lot?  god knows, if or when it will happen.  if it does they will probably be onto the ****ing leeches that are claims companies to get stuff written off and compensation.

 

I used to work in a bank and the amount of 18-25 year olds spending more than half their wage to get the latest audi / bmw was stupid.  once they paid the car off each month, they didnt have any money to actually go anywwhere or lived off bank of mum and dad as well as the house of mum and dad. but the selfies with the shiny shiny in the background look cool! and of course, they never owned the car, it was done on fianance, hp or pcp.  biggest con of the lot pcp!  never own anything, just keep on paying out month and month after year and onto a shiny new one after 2/3 years.......   then when it all went tits up, it was the banks fault for lending them money!🙄  interest rates go up to 3-5% range, a lot of folk will suddenly be in real problems.

 

Now, i know not everyone is like that and there are times when people through no fault of there own hit hard times, illness, unemployment and so on, been there myself.  but there a hell of a lot of folk whose brain cell gets concussion bouncing around the skull on its own who just fritter money away and dont think 5 seconds ahead. cut out a starbucks (or similar) a day, everyday. saving is not hard to do

 

rant over

[Minimalist]

14 minutes ago, bluffer said:

as someone else mentioned, a lot of it is generational.  it depends when you grew up, 60s, 70s, even 80s to a large extent you saved until you had the money to buy something.

Its because of the volume of financial securities from the 60s to now. They are gargantuan in comparison.

Most people did not have a mortgage in the 60s. Never mind car loan payments.

The average household (family), if I can correctly remember by the data, has a mortgage, two car payments and one credit card.

We no longer save our hard earned cash in the West.

[Bigmarc]

I wonder what the average cost of an emergency is? 

Don't know about anyone else but I could have nothing for years then 4 or 5 emergencies smack me in the face at once.

[Rains]

31 minutes ago, Bigmarc said:

I wonder what the average cost of an emergency is? 

Don't know about anyone else but I could have nothing for years then 4 or 5 emergencies smack me in the face at once.

Depends on someone's  definition of the word emergency could be  fridge/boiler breaking all the way to car\dental\funerals ect and yeah i have to agree one never seems to happen   cost would be £300 to £6000 imo

Edited March 1, 2022 by Rains

[Minimalist]

31 minutes ago, Bigmarc said:

I wonder what the average cost of an emergency is? 

Don't know about anyone else but I could have nothing for years then 4 or 5 emergencies smack me in the face at once.

Hard one.

In my experience, its layered by importance in my opinion... Fundamentally, emergencies should cover a job loss and funeral thats the two most important imo. Then you have the second layer of importance where its appliances or car expenses/replacements. Sticking with an emergency fund that can cover six months expenses usually does the trick, unless you are into buying used cars like myself lol.