Most Americans are one paycheck away from the street

[fan_since79]

from Marketwatch.com

 

http://www.marketwatch.com/story/story?guid=5412aa0c-95ee-11e4-912b-cf8d7808510c&storyguid=5412aa0c-95ee-11e4-912b-cf8d7808510c&siteid=nwhpf

 

Americans are feeling better about their job security and the economy, but most are theoretically only one paycheck away from the street.

Approximately 62% of Americans have no emergency savings for things such as a $1,000 emergency room visit or a $500 car repair, according to a new survey of 1,000 adults by personal finance website Bankrate.com. Faced with an emergency, they say they would raise the money by reducing spending elsewhere (26%), borrowing from family and/or friends (16%) or using credit cards (12%).

 

[Stradling]

I'm not, but if I lose my job my ex is.

[mp170.6]

That's an awful sobering article. 

[JAHV76]

Unfortunately too many people overextended their lifestyle and are now have nothing for it. Another point to consider is that many young adults do not see the importance of homeownership, health insurance, savings or retirement.

[deepdrive]

Unfortunately too many people overextended their lifestyle and are now have nothing for it. Another point to consider is that many young adults do not see the importance of homeownership, health insurance, savings or retirement.

 

Maybe it's because we live in California, but I don't know anywhere someone can live on a $10 hr full time job except in their car ( or have an absolutely meaningless life). I would say that it's more our government laws and policies that have overextended peoples lifestyles. There's many ways low income people could have a much better life that's prevented by zoning and legal requirements on how one spends their money.

[JAHV76]

Maybe it's because we live in California, but I don't know anywhere someone can live on a $10 hr full time job except in their car ( or have an absolutely meaningless life). I would say that it's more our government laws and policies that have overextended peoples lifestyles. There's many ways low income people could have a much better life that's prevented by zoning and legal requirements on how one spends their money.

I might have missed something but I thought the point of the article to be people's assets dropped in value. In other words they bought a home that they truly couldn't afford and now it's worth less. In many of those case they purchased an ARM loan that the interest greatly increased over time. No govt agency forced anyone to sign for a mortgage they couldn't afford.

[gotbeer]

Unfortunately too many people overextended their lifestyle and are now have nothing for it. Another point to consider is that many young adults do not see the importance of homeownership, health insurance, savings or retirement.

 

Also, most young adults have been brainwashed that college is the key to success.  Many go, and as a result, have a home mortgage worth of loans to pay off with nothing to show for it.

[Don]

I think it's pretty complex, but out of my peer group (friends and family my age, college buddies, etc...) the majority of us are in that situation. The tradititional hiring model that most 40 or 50 something's remember isn't nearly as prevalent anymore. It still exists, but I know plenty of well-educated, experienced people around my age that just bounce from contract to contract in their fields. For some it's super stressful and for some it's actually pretty great. One of my best friends works as an engineer specializing in assembly line technologies and just takes three month or six month contracts for a ridiculously high hourly rate and spends about a third of his year travelling. I know far more though that have just been bouncing around for years looking for something permanent and stable.

Living in the Midwest, I can get by on a lot less than what I made in SoCal, but I've had plenty of job offers here that were just insultingly, laugh out loud low. "Hey, you've got a degree and a few years of experience... Want to come work for our marketing department for $12/hr?" I've been lucky enough to not have to take anything like that, but there are plenty of people that get forced into that sort of position and can't build up much of a financial base.

In the end, I just want to tell every 12 year old I see to either train themselves to become a kickass programmer/developer or learn a skilled trade.

[mp170.6]

Also, most young adults have been brainwashed that college is the key to success.  Many go, and as a result, have a home mortgage worth of loans to pay off with nothing to show for it.

 

I know a younger couple, fresh out of college at a private university.  Last I heard, their student loans amounted to $327,000. 

 

He's having trouble finding a decent job, and she wants to be a stay-at-home-mom. 

[JAHV76]

Also, most young adults have been brainwashed that college is the key to success.  Many go, and as a result, have a home mortgage worth of loans to pay off with nothing to show for it.

I agree the student loans are out of of control.

[mp170.6]

I think it's pretty complex, but out of my peer group (friends and family my age, college buddies, etc...) the majority of us are in that situation. The tradititional hiring model that most 40 or 50 something's remember isn't nearly as prevalent anymore. It still exists, but I know plenty of well-educated, experienced people around my age that just bounce from contract to contract in their fields. For some it's super stressful and for some it's actually pretty great. One of my best friends works as an engineer specializing in assembly line technologies and just takes three month or six month contracts for a ridiculously high hourly rate and spends about a third of his year travelling. I know far more though that have just been bouncing around for years looking for something permanent and stable.

 

That's another bad trend.

 

In a lot of cases, paid a very high hourly rate -- as an independent contractor.  No insurance.  No retirement.  No benefits.  No worker's comp.  A lot of younger people are swayed by the high dollar figure and don't realize all the negative aspects of being an independent contractor. 

[Don]

That's another bad trend.

In a lot of cases, paid a very high hourly rate -- as an independent contractor. No insurance. No retirement. No benefits. No worker's comp. A lot of younger people are swayed by the high dollar figure and don't realize all the negative aspects of being an independent contractor.

All true. I was pointing out my buddy's case as an exception because a single guy in his 20s making $50-ish an hour in rural Iowa (his current location) can do his own investing and buy his own health insurance at that rate and live a pretty nice life. Most contract workers don't make nearly that much and get screwed by the lack of benefits. Add a couple kids into the mix and things could get very scary very quickly. Edited January 8, 2015 by Don

[nando714]

I pay 50 dollar Co pay for the ER.

[Catwhoshatinthehat]

Rising college costs are an issue but the student loan crisis is a bit over exaggerated as the average student loan debt is just under 30K.  I do agree that the bigger issue is kids being told they have to go to college when quite frankly some of them just don't belong there.  I've got a cousin who tries her best but if it wasn't for her parents footing the bill and telling her she needs a degree she wouldn't be in school.  She's in her late 20's, doesn't have her bachelors yet and my aunt and uncle mentioned that she's going for her masters.  This is someone who barely got through high school and while some of it was due to a learning disability that she overcame she just doesn't have the aptitude or ability to do the type of case work necessary to get her masters.  

 

Anyways the original article doesn't really surprise me.  I know of too many people who spend money on new phones, newer cars, go out to eat a lot, etc. yet they're one accident or mishap away from digging themselves into a financial hole they really won't be able to get out of.  In the mean time they continue to plod along without saving for their future.  It's not a matter of them not making enough money it's just that they don't prioritize their financial security.  Sadly more and more people are living like that and by the time I retire they're going to represent a pretty good size group of voters. 

[mp170.6]

All true. I was pointing out my buddy's case as an exception because a single guy in his 20s making $50-ish an hour in rural Iowa (his current location) can do his own investing and buy his own health insurance at that rate and live a pretty nice life. Most contract workers don't make nearly that much and get screwed by the lack of benefits. Add a couple kids into the mix and things could get very scary very quickly.

 

Even worse IMHO is the shifting of liability.  As an independent contractor, if you get injured in the scope of your duties, the employer isn't liable.  You could become paralyzed for life at a very young age, requiring millions of dollars in care, but the employer won't owe you a penny.

 

There's a lot of shady employment practices where this stuff is never discussed but included in the fine print.

[fan_since79]

I pay 50 dollar Co pay for the ER.

 

Great, but what is your monthly premium?

[Vegas Halo Fan]

Living in the Midwest, I can get by on a lot less than what I made in SoCal, but I've had plenty of job offers here that were just insultingly, laugh out loud low. "Hey, you've got a degree and a few years of experience... Want to come work for our marketing department for $12/hr?" 

 

I worked on a mental health unit at a local hospital before I went to work for the Department of Corrections here. About a year after I left, I got a call from the medical director who said that he wanted me to apply for the nurse manager position on my old unit. The setup was rather odd. The nurses on the unit worked directly for the hospital, but the nurse manager, the unit manager and the program staff all worked for a contracted company out of Nashville. They wanted me to be on call 24/7, to be willing to come in at a moment's notice if anyone called off and they couldn't find a replacement, to go into the community with the unit manager to market the program, and to supervise, schedule and evaluate unit staff for three shifts. They also apparently believed that Nashville salaries would work in Las Vegas. For all of this they were offering me about half what the other nurse managers in the hospital made, and about $12K less than I was making passing out pills to inmates in a medium security prison. I told them, double the offer and we will talk about it. I never heard from them again, but they hired someone who lasted for about a week and quit.

[fan_since79]

Most financial planners recommend having 6-9 months' worth of expenses in an emergency account, ready to draw on if needed.

 

And the older you get, the more necessary health insurance becomes. Serious illness and hospitalization can bankrupt someone without health coverage. 

[nando714]

Great, but what is your monthly premium?

I pay around 26 a month. I have Keiser. That's for vision and dental as well.

[yk9001]

I wonder how many of these people with no savings have an iphone or droid.  Or HBO.

[ten ocho recon scout]

Maybe it's because we live in California, but I don't know anywhere someone can live on a $10 hr full time job except in their car ( or have an absolutely meaningless life). I would say that it's more our government laws and policies that have overextended peoples lifestyles. There's many ways low income people could have a much better life that's prevented by zoning and legal requirements on how one spends their money.

10 dollars an hour is minimum wage (or close im assuming). Correct that youn wont be able to live on that, but the point would be to develop a skill that pays better than 10 an hour.

Edited January 8, 2015 by ten ocho recon scout

[Angel Oracle]

Also, most young adults have been brainwashed that college is the key to success.  Many go, and as a result, have a home mortgage worth of loans to pay off with nothing to show for it.

Exactly, my daughter wants to focus on a trade school, much less spent on education and maybe more likely to find employment quickly enough.

[Adam]

We gambled a bit buying our house 13 months ago. We'd be pretty screwed if I lost my job in the next 12-24 months. If it were up to me we would've stayed in our condo with a cheap $1350 mortgage and low HOA fee. 

[ten ocho recon scout]

I wonder how many of these people with no savings have an iphone or droid. Or HBO.

This.

Im biased in that how i budget myself works for me, so i (which isnt necessarily right) assume its the best way and think others should do the same. But i make a decent income, could afford to have a lot more 'things'. But i had 'cheap' parents, one who grew up very poor, so they taught me how to budget and save. So whereas i could afford a nicer car and a bigger house, im doing ok in my old car and condo. I never buy anything on credit unless its zero percent interest (like a best buy account) and always pay it off before the interest penalty would kick in.

Again, its not 'the only way' of doing things, but a lot of it comes down to personal responsibility. I know too many people (like me) who came up without a lot of money who are doing very well today. Success is a competition though. Theres a lot of jobs out there that pay well that not a lot of people are interested in doing (like mine). Sometimes you have to bite the bullet on a 'job you love' and get one thats more practical.

College isnt any guarantee but it sure helps. But i think too often immature (we all are at that age) kids pick a major (and take out a loan) in a field there isnt a huge demand for, becauae it interests them and sounds fun, and have no real plan on what to do with it after they graduate. And they dont have a secondary plan in place.

Someone mentioned above about adding kids, and that to me is one of the biggest issues currently. People who are already on a tight rope financially having kids....of course its going to be a struggle. Its no different than having a tight income and buying a house, buying a car etc.

I doubt many people out there have the discipline to save a tax return for a rainy day. If you spend that money on something practical its totally understandable, but if you use it to buy a toy thats on you.

Thats my 2 cents.

[wopphil]

We gambled a bit buying our house 13 months ago. We'd be pretty screwed if I lost my job in the next 12-24 months. If it were up to me we would've stayed in our condo with a cheap $1350 mortgage and low HOA fee.

I am in the same boat. I don't live extravagently, but a $3,000 mortgage, $800 student loan payment, $700 preschool payment, and $800 health insurance contribution (not to mention food for family of five, utilities, gas, insurance, etc) make it tough to save any meaningful amount of money.