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Treasured Social Butterfly

Emergency expenses/funds

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Message 1 of 22

" Federal Reserve reported last year, only 46 percent of Americans surveyed said they had enough money to cover a $400 emergency expense".

 

The article below discusses a different subject but one of the main points is the access to funds.  It is hard to believe that more than half of Americans have less than $400 in emergency expense savings. More than half of Americans are employed.  Where do emergency funds fall in budget and planning?

 

 

https://www.nytimes.com/2017/06/01/nyregion/getting-rid-of-bail-is-only-the-start.html?em_pos=medium...

Life's a Journey, not a Destination" Aerosmith
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Treasured Social Butterfly

Re: Emergency expenses/funds

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Message 2 of 22

So this begs the question,  what do you do if you have an emergency and no funds?  What if your car battery dies and you need to get to work and you have no money to buy one and you don't live on a bus line and you have no one to borrow from... lose your job?

 

Stats on poverty can be found at this link but what does this really tell you?  

http://npc.umich.edu/poverty/

 

 

 

Life's a Journey, not a Destination" Aerosmith
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Re: Emergency expenses/funds

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Message 3 of 22

I think I browsed that article a while back (or something similar), and found that number very hard to believe. Maybe it's more local, where some areas have 95% of residents able to cover a $400 emergency, while other areas are the opposite with 95% UNable to cover it.

 

I just can't relate to it; as soon as I started working, Mom ingrained in me the obligation to start saving & maintain emergency funds. What's Suze Orman's rule of thumb; used to be 6 months, but I think went to 1 year's worth of expenses?


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Re: Emergency expenses/funds

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Message 4 of 22

This is a subject that you guys would agree that has endless permutations. The political thread already has a discussion of poverty, although, it's more about arguing  about people not taking jobs that are available and sitting around collecting welfare. There are endless discussions about the role of government, private charities, assistance programs of all types, lack of education, lack of job opportunities, lack of training, etc.

   I've been fortunate enough to never experience poverty. My parents did, but that's the primary reason I didn't have to. A lot of us had parents who lived through the depression. And of course, poverty was very different then with so many people in the same circumstances. My mom always said they didn't know they were poor because everyone lived similarly to them. 

   It is hard to believe that in this country, the middle class has been so decimated, we have such income disparity, such disparity in needs of employers and skills that applicants (don't) have, and jobs are continuing to go to other countries.

   My first career was as a caseworker for the Illinois Dept of Public Aid where I worked in the Chicago projects. I have a whole different perspective on poverty from many people after my years of experience in that. 


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Re: Emergency expenses/funds

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Message 5 of 22

I don't think it is just low income folks that find themselves in such a state.  It is anybody who has not prepared and is living paycheck to paycheck - whether they are living above their means or they are already paying off a debt perhaps from an emergency situation that happened earlier.

 

So what do they do . . . . They dig themselves in deeper with added credit card debt, payday loan, title loan.  OR they may drop something which they think they can get away with like dropping insurance - perhaps health insurance or even a life insurance policy, term or value achieving.

 

Course, nowadays, depending upon the heart-strings of the emergency, there is always "GoFundMe", as a way to bring in emergency funds.

 

I am constantly surprised at the extent to which some people go to meet a money demand.  I know people who live on a strictly cash bases because there are so many collectors after them.  A sad way to live but it seems after doing it for so long, they just learn to deal with it.

 

Then others have to decide what a "real" emergency might be.  As we all know, to many people there is a hierarchy even for this classification - asking themselves, what will happen if we don't deal with it; can it wait til another day?

 

I guess in a way, my parents probably did this type of emergency priority assessment but many times back then, there were ways to barter for services or do odd jobs to meet the demands of emergencies that absolutely had to be taken care of right then.  

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Re: Emergency expenses/funds

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Message 6 of 22

.. And just the other day I read an article about "weddings becoming more elaborate". Everything has to be evaluated on a case by case basis, but I have little sympathy for people who live above their means, then have emergencies they can't handle. And I'm sometimes shocked by the people who set up or have friends set up GoFundMe accounts, when they have situations that should be covered by insurance or their own emergency fund.


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Re: Emergency expenses/funds

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Message 7 of 22

.. And just the other day I read an article about "weddings becoming more elaborate".

 


That's a contentious subject with my niece. She is in her late 20's, and a great many of her friends have been getting married. She is having difficulty saving money with what seems to be continuous, wedding-related expenses, and in some cases, goes to her mom, my sister, for a loan to pay to be in the wedding, including some destination weddings. And, she is doing far better, financially, then many of her friends who are taking everything they have ever saved and having an overly extravagant wedding.  So, not only are the bride and groom mortgaging their future, they're taking wedding party people down with them.


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Re: Emergency expenses/funds

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Message 8 of 22

@retiredtraveler - Probably because I grew up with a single parent & extended family (atypical for the 1950s), and became known for my brains more than popularity, I've never felt I had to "keep up with the Joneses". I went to a college with few women, entered a field that was mostly male, and was only invited to the wedding of one college friend .. which was done on a shoe string.

 

My family had their financial priorities straight; the only reason I could imagine going to anyone for money, would be a dire emergency .. not for discretionary social spending, like vacation or destination weddings! I just don't get it, when parents set a precedent of paying for things like that their adult children can't afford .. and allowing them to remain dependent.


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Re: Emergency expenses/funds

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Message 9 of 22

retiredtraveler wrote:

.. And just the other day I read an article about "weddings becoming more elaborate".

 


That's a contentious subject with my niece. She is in her late 20's, and a great many of her friends have been getting married. She is having difficulty saving money with what seems to be continuous, wedding-related expenses, and in some cases, goes to her mom, my sister, for a loan to pay to be in the wedding, including some destination weddings. And, she is doing far better, financially, then many of her friends who are taking everything they have ever saved and having an overly extravagant wedding.  So, not only are the bride and groom mortgaging their future, they're taking wedding party people down with them.


I think that in many cases these weddings have become vulgar in their excess  and you can add to that the costs of prom, prom posals, sweet sixteen parties.   Most of this comes from watching the endless shows about the hollywood and celebrity way of life which is definitely one of outward show for many.   The ones who really benefit are the companies that sell these products and services.

Life's a Journey, not a Destination" Aerosmith
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Re: Emergency expenses/funds

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Message 10 of 22

ASTRAEA wrote:

@retiredtraveler - Probably because I grew up with a single parent & extended family (atypical for the 1950s), and became known for my brains more than popularity, I've never felt I had to "keep up with the Joneses". I went to a college with few women, entered a field that was mostly male, and was only invited to the wedding of one college friend .. which was done on a shoe string.

 

My family had their financial priorities straight; the only reason I could imagine going to anyone for money, would be a dire emergency .. not for discretionary social spending, like vacation or destination weddings! I just don't get it, when parents set a precedent of paying for things like that their adult children can't afford .. and allowing them to remain dependent.


You brought up an excellent point.  More and more I have realized how very very fortunate I was to have great parents who taught us great fundamental values.   I think about what I would be like if I was raised by a parent(s) who did not value education or hard work or the hundred other important things that we learned.  Would I be the same person?  well no because I would have different genes but you see what I mean.  I wonder about how growing up with different parents and different values can determine your whole life.  Free public school was supposed to even it all out and give everyone a more level playing field but that is kind of impossible.  Areas of long time poverty also often have long time crime and other problems and attracting teachers is difficult and I think it would be really hard to pull yourself out.  What do you think?

Life's a Journey, not a Destination" Aerosmith
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