Households making more than $100k = 38% would have some difficulty coming up with $1000

[Liberal_in_LA]

NEW YORK — Two-thirds of Americans would have difficulty coming up with the money to cover a $1,000 emergency, according to an exclusive poll released Thursday, a signal that despite years of recovery from the great recession, Americans’ financial conditions remain precarious as ever.

These financial difficulties span all income levels, according to the poll conducted by the Associated Press-NORC Center for Public Affairs Research. Seventy-five percent of people in households making less than $50,000 a year would have difficulty coming up with $1,000 to cover an unexpected bill. But when income rose to between $50,000 and $100,000, the difficulty decreased only modestly to 67 percent.

Even for the country’s wealthiest 20 percent — households making more than $100,000 a year — 38 percent say they would have at least some difficulty coming up with $1,000.

Harry Spangle is one of those Americans. A 66-year-old former electrician from New Jersey, he said he would have to borrow from friends or family in order to cover an unexpected $1,000 expense. “I have a pension and I am on Social Security, but it’s very limiting,” he said. “It’s depressing.”

Mitchell Timme, 26, said his wages have remained basically flat for the last few years while his cost of living has increased. Once everything is paid “there’s nothing left to save,” he said.

“It definitely adds stress to everyday life. It hangs over you,” said Timme, who works at a security company in Phoenix.
Having a modest, immediately available emergency fund is widely recognized as critical to financial health. Families that have even a small amount of non-retirement savings, between $250 and $749, are less likely to be evicted from their homes and less likely to need public benefits, an Urban Institute study found.

[UMTerp01]

1. This is sad. People don't save

I make a low 6 figure salary and I have enough savings that I could be out of a job for 18 months and be ok. It used to just be a year's salary but after the recession and listening to Suze Orman...I decided to up it to 18 months, and am honestly going to try and get it to 2 years. However, I have no children (i.e. money suckers) and don't live beyond my means. Could I afford to drive a Mercedes or a Range Rover? Sure. But I drive a Volkwasgen Passat instead. I actually recently just bought the new Passat and its a modest mid sized sedan. I don't believe in spending huge sums of money for something that is going to depreciate the second I drive it off the lot.

I know people who make even more more than I do who have virtually no savings and essentially live paycheck to paycheck because they are house poor and car poor. I refuse to be either. I like to travel and I'm a clothes whore. When I buy something with credit I pay the bill at the end of the month. Most people just aren't smart enough when it comes to money.

[RadiationTherapy]

3. Wow! No one has ever posted anything like this ever anywhere on the internet!

Congratulations for explaining it all so simply. Like, duuuuuhhh!

[UMTerp01]

7. WTF???

WTF is your problem? Its obviously NOT that simple, otherwise people wouldn't have such a struggle to come up with $1000 in an emergency. Its about discipline and learning to not live beyond your means but thats hard for many people to do because of not being that great with finances. I'm simply explaining my story and how I am able to do it. No need to be a douche.

[RadiationTherapy]

8. I have a lot of problems with the tone and content of your post.

I feel fairly comfortable with the response I gave. To be brief, I personally have never met anyone who had financial problems because they weren't "smart" enough or "disciplined" enough. Lucky me.

[philosslayer]

9. Thats been my observation also

Among people i've known with financial problems, every SINGLE one of them can be blamed on outside forces. None have had a thing to do with self discipline or personal decision making in their financial lives.

[840high]

12. My problems started when

bills from 2 bouts with cancer started coming in.

[RadiationTherapy]

16. My dad was blinded by a brain tumor when he was 42 and I was 16. My brother's radiation

began 2 years later. He lost his voice, ears, ability to swallow, and most of the use of his left arm.

My mother and I did the best we could and any smug assholes who think they know a goddam thing about how "money problems" are due to individual choices and "money-sucking children" can expect a harsh response from me.

My mom and I did the best we goddam could. An english-second-language Quebecois immigrant and her 16 year old "money sucking" child. We tried to salvage and live and it didn't fucking work out.

[840high]

18. I fully understand. Then

when I went on SS - $512/mo - life is hard.

Hugs

[UMTerp01]

19. I'm sorry. Its just the way I feel about children

They are money suckers. They are. It wasn't a slight against children. I mean perhaps I could have just said I don't have children so that saves me a great cost instead of calling them money suckers. Part of my decision to not have children has to beyond the fact that I just don't have the patience to be a parent. To me, parenting is the ultimate sacrifice and if you aren't 100% into it (which I'm not) then I don't think I should be a parent. My view of children is my own. Its not representative of anyone else. I only speak for myself. I have 3 god children who I'd give my life for and spoil the hell out of them but I can return them to their parents at the end of the day. I really did not mean to offend and if I did I am sorry.

You and your family has been through a lot and is an example of those outside forces that can really make one's financial position very unstable. Those sort of life altering things that you really don't see coming that can make it impossible to save and maintain a good financial position.

[RadiationTherapy]

22. It's fine. My life is my life. I don't care how people feel about kids,

but it bothers me when thinking, voting people have over-simple notions of "success" "saving" "financial choices" and so on. Nonetheless, I understand that my family has struggled more than many and so be it.

[newthinking]

29. You have handled yourself fine

I thought you explained your position without making it sound like a lecture or put down.
Believe me, I hate that our society likes to well to make every issue into a judeo-christian ethics rant. But your post was not that.

What I saw in your post was the recognizance that everyone is vulnerable and you understand it is possible to have your life turned upside down. Good you are thinking ahead.

[JackInGreen]

42. Ive only had the one

And my hospitals "finance team" is their in house contract collection agency. My credits fucked forevermore.

[840high]

48. So is mine. The collection calls and letters

are non-stop.

[GulfCoast66]

13. If you met

My sister you could not say that.

[UMTerp01]

15. Ok. I accept that.

Of course there are things that happen that make it very difficult for people to save or be able to maximize their money. However, there are a lot of people who live beyond their means. I'm not really talking about those who make $50,000 or less. I mean I don't know how people do it. Wages have been stagnant and the cost of everything else has gone up. I'm more so talking about people who do make a decent income but buy a house the size they really don't need or buy an expensive car that they really don't need or rely too much on credit for things they really don't need. I'm talking about the people who do have the means to save but are literally not making wise decisions with their money and then find themselves in an emergency situation and have no savings.

[RadiationTherapy]

17. More about my reaction in post 16.

Good luck to you and yours.

[Demonaut]

28. I agree with your post, many people buy too much, it's our society..gotta keep up with the Jones's

[War Pigs]

36. yep gotta have 2 $40,000 depreciating cars in the driveway...

$600 cell phones for the whole family every 2 years, laptops, tablets, cable, Direct TV, you name it. more superficial than ever and i'm talking those above income levels that they should NOT be struggling. we all know them

[Jim Beard]

62. I can almost hear the dominoes starting to fall.

[War Pigs]

38. financial planners say to have 6 to 9 months living expenses in cash reserves

not 401k, home equity, etc. few do- unlike our parents

[MillennialDem]

46. Not everyone has control of it and some people aren't living beyond their means

I racked up a shitload of medical bills (unpaid by insurance) and also have student loans from grad school.

Was school and medical stuff living beyond my means? I drive a 21 year old car and have no kids. I earn upper 5 figures, but the medical bills really socked me in the gut.

[UMTerp01]

56. Yes I know

Obviously you can't paint everyone with a broad brush in terms of their finances. Please see some of my other posts about this. But there's no denying that there are a lot of people in financial positions in which they make over $100,000 who are in those positions because they are living beyond their means. I'm not talking about life's unexpected tragedies and hardships like taking care of a sick parent or a personal health issue, or student debt. I'm talking about people who are less than smart with their finances because they are house and car poor and spend too much on materialistic things.

[Sherman A1]

5. You are wise

and fortunate to be in the position that you are in. Yes, people are not often well educated about money and I fault our educational system in some part for that. Too often folks are not in a position to save because they are dramatically underpaid or just scraping by on minimum wage jobs. It's not always just the "smarts" to save, too often it's just the position in which folks find themselves.

I have been in the place where a $1k expense could be a real budget buster and really put me in a bad place, I have also crawled out of post divorce credit card debt and divorce expenses along with a house where everything simply broke within a year's time. It was tough but i made it and while not in as good a shape as you seem to be, I am hardly starving.

[renate]

6. I wish all kids were taught money skills like yours

It makes such a difference when they're young--they can be more rational about choosing whether or where to go to college (and level of debt), choosing a career, choosing to start an IRA right away, not buying a fancy car because they can.... All these things add up, but people look around at a culture where the cars are all shiny and the houses are all big and they think regular people can actually afford to live like that. Most kids don't know any better--why should they? they believe what they see!--and they're starting off in life with such a financial disadvantage. And those are the lucky ones who have reason enough to even hope for a middle-class lifestyle.

Congratulations! I know you wish that everybody were in your boat. It's really the way life should be and it sucks so much that your level of basic security is so hard to come by for most people.

[HughBeaumont]

10. OK, so

* Low six-figure salary
* No money suckers
* Buy a new sedan
* Never have unexpected triple or quadruple digit bills that seem to hatch like eggs every six months
* Get smarter

I'll get right on that.

[SammyWinstonJack]

58. Ha!

[hamsterjill]

21. It's not what you make.

It's what is left after all of the necessary bills (notice I did not say "necessities&quot are paid. Necessary bills are your commitments and there are many people who take care of sick relatives, old relatives, support non profits, etc.

Not everyone is out driving a BMW with 600 cable television stations and $100 bottles of wine in their wine coolers that were built into their luxury homes.

[The Green Manalishi]

24. I don't think it's an 'either/or'

I know people who make half of what I make who have significant savings; they haven't been out to eat in a year, no debts, save an incredible percentage.

I know people making three times what I do who are no more than one missed paycheck away from the living hell of debt collectors.

One could be thrifty as hell but come down with cancer or something terrible and even that 'year and a half' salary can be gone in a flash if it happens just as you lose your job. I've seen that first hand; even doing everything right you can be in a world of hurt.

I don't blame anyone who is in financial difficulty, but a lot of people never DO learn how to save and manage money. Personally I think that is the parents fault as learning to 'pay yourself first' is damned difficult and almost impossible if you don't start in childhood. And then when interest rates are low and inflation lurks saving isn't as attractive as it was to a previous generation; get effectively zero percent on your bank account and inflation will do you some harm....


I'm doing well, but I don't pretend to be anything other than lucky, both in frugal upbringing, career opportunities and health.

[SheilaT]

25. Actually, at least some cars don't depreciate all that much

in the early years. Someday, when I'm ready to replace my current 2004 Honda Civic, I plan to get a Honda Fit, and that I'll buy new (unlike the Civic) because a three year old Fit, the last time I checked, was only about two thousand less than new, so I'll buy new for that relatively small difference.

Why one person needs two cars does escape me, however.

[madinmaryland]

35. Wow! Must be nice. Ever lost a job or been though

A divorce. All it takes is a couple of sort term bad situations and you are fucked.

[jtuck004]

37. Must be miserable wretch. Over $100,000 a year and only yourself to feed well, keep warm, nice car.

Before the financial crisis there were only 26.3 million people on food stamps.There are now ~150 million who live in poverty or are seen as working poor. None of them make over $50,000 a year, many have children. You poor thing.



Fact is, an injury to one is an injury to all. You seem to find it odd that you are only able to be more comfortable than others and eat more than many children do (who are dependent on getting food when they get to school, btw).

You bought a fucking car.Do you know how many parents would like to do that but can't put clothes on their kids backs, even working 3 jobs. (Yeah, not a question)

Do you know that most people on food stamps are working if they are physically able to to. (Same thing)

You act like you can't make it on what you are taking. Your answer is in the statement that sounds like you don't give a flying rat's ass about anyone else or how hard they have it as long as you have yours.

So, again, no question. I would ask you to think about how one saves when thieving employers screw everyone, but ...

Don't bother- I don't think you can.

[UMTerp01]

39. I was really talking about people in my financial position or better

See my follow up posts regarding people living beyond their means. I'm not talking about people with incomes that are just impossible to save in today's economy. I'm talking people who make my salary or above but are living beyond their means and living a lifestyle that essentially has them living paycheck to paycheck. And correct me if I'm wrong but this article is talking about income of $100,000. Yes I'm looking at it as an unmarried person with no children, but if you are making $100,000 you are making enough to be able to do things with your money (minus health and caring for others situation) so that you can pull $1000 for emergencies.

[cstanleytech]

43. Imagine how hard it is for those of us who earn only 4 or 5 figures. nt

[UMTerp01]

45. OH I absolutely agree

I don't know how people do it. I don't. But I was specifically talking about those making $100,000 and over. I really don't know how people on a $50K or less income do it. I mean between housing, transportation, food, and all the other expenses of life I understand people putting off having children, moving back in with their parents, and making many other sacrifices. Then there's just the plain issue of life. Student loans, illness, caring for a parent, etc. Yeah...the income inequality gap is too out of control. Those who seem to be hit the worst are those who are just above the poverty line because they don't make enough to really get ahead but make too much to qualify for any entitlements.

[cstanleytech]

47. " I really don't know how people on a $50K or less income do it." Most of us dont.

Oh we want to but we literally cannot afford it especially those of us like myself who are living in the 4 figure area code.

[airplaneman]

50. I figured out some basic rules (I was 49 when I woke up)

Always live below your means no matter how much you make.
Save 10% or more for as much of your life as possible and don,t go after it for nothing - find some other way.
-Airplane

[Texasgal]

54. You do understand that you

are a rare case right?

The article states that most Americans could not come up with the money... why is that? Maybe it's not planning or living beyond means at all... perhaps it's the absolute rape on the middle class from everything like health care costs, education, child care, higher tax rates, home maintenance and ownership... I could go on and on.

This is NOT an issue of people not being able to save. This is an issue of the MIDDLE CLASS trying to survive!

[Odin2005]

59. The privilege that oozes out of your post is disgusting.

[Pakhet]

67. not so much don't as can't

I usually have something between $13-$130 to last 2 weeks after paying bills on payday. that's before grocery shopping and putting gas in the car. there's nothing to save.

[LanternWaste]

72. Is that simply an allegation or do you have objective measures pointing...

"Most people just aren't smart enough when it comes to money..."

Is that simply an allegation, or do you have specific and objective measures pointing towards that particular conclusion?

[Warpy]

76. Two words: "STUDENT LOANS"

People making 6 figure salaries can be pretty much guaranteed to have them.

[closeupready]

2. I've been watching "Life or Debt" about working Americans with money problems.

Most working Americans, as the intro explains, live paycheck-to-paycheck. So I find this story believable. K&R

[alarimer]

4. I am finally able to save money.

Now that I no longer live alone. But before shacking up, I could not have come up with $1000 on short notice. I didn't have many debts, but housing costs ate into my take home pay. I always rented because I thought I couldn't afford to buy (I couldn't have put any money down, that's for sure), but renters take it on the chin in some places. Shitty apartment that cost way too much, like the last town I lived in.

Now I live in one of the most expensive housing markets in the country. But because I am no longer responsible for ALL the bills, I'm saving. Two incomes make a huge difference. I will get a raise, but not until next year. So I have the emergency fund; my car is paid off, and I have started a supplemental retirement account, 457 and 401K. But it took me almost 20 years of work to get here and I absolutely could not have done it on my own, which kind of sucks really.

[Manifestor_of_Light]

32. you know why the rent is too damn high?

High property taxes in states with no state income tax, like Texas. Owners have to pass it on to renters to make a little profit, when that is your retirement income. Also high sales taxes, license fees etc.

[alarimer]

69. I think it may be more complicated.

The rent was actually reasonable in Texas, where I lived for a while. But that was in a place with a lot of rental properties and before the housing crash.

Sales taxes, on the other hand were something close to 9 or 10%.

In the NC town where I lived, there was little in the way of apartments. Only a few complexes and one was outrageously expensive (and where a lot of Coast Guard lived- there was a big base in town). I had heard (but don't know if this is true) that the housing allowance that people in the Coast Guard got drove up rental prices in town.

I live in MD now, though, and we have an income tax and I pay way more than I have ever paid for rent in my life. It's the DC effect, I suppose. All housing is expensive here. I don't know if we will be able to buy, even though we have a good combined income. I refuse to commute more than 30 minutes.

[TexasBushwhacker]

11. No matter how much you make you can still be broke

Even Donald Trump was broke in the 90s and had to borrow millions from his siblings TWICE.

http://mobile.nytimes.com/2005/10/23/business/yourmoney/whats-he-really-worth.html?_r=0&referer=

[Proud Public Servant]

14. Misleading, moralistic headline

This isn't about being able to manage a $1000 expense; it's about having savings, which the article treats as an absolute good rather than a rational financial calculation.

Think about it. I'll use myself as an example. Money right now is very, very cheap, and credit is easy; interest on savings, however, is near 0% (and thus a net money-loser against inflation). As a result, there have been time recently -- for example, when my daughter was in college at VPU (Very Pricey University) -- when I wouldn't have been able to lay my hands on $1000 cash. But I could easy have borrowed that amount (my credit cards are empty and I have home equity) and could have fit servicing the resulting debt into my budget with very few if any lifestyle changes. So I rolled the dice, betting that I could always get money if I needed it, but I probably wouldn't need it and would much rather vacation in Barcelona. It's a rational decision, it worked for me, and I'll bet it's how many people in that income bracket are thinking about debt and savings.

[knightmaar]

23. But ... don't you want to retire at some point?

First of all, money stored in the stock market in broad-based index funds, on average, over long periods of time, returns 7%, not 0%.
I don't see how you're going to retire, ever, if you don't start savings and putting a little more priority on future financial stability over present day expenses.

[Proud Public Servant]

27. See, you just reinforced my point about the headline

I have ample retirement savings; I've saved a for retirement non-stop since my first job, put it in stocks, and am in good shape by any reasonable measure. But that money is in retirement accounts; I couldn't (and shouldn't, and wouldn't) tap them to pay for, say, a blown head gasket, which is the scenario the article envisions. Using cash-on-hand as a measure of overall financial health, particularly in a low-interest economy, is just scare-mongering.

[knightmaar]

30. I suppose. I see your point.

It just seems weird, if you're earning over $100k, to not have $1000 just sort of floating through your bank account on basically a constant basis.
You're right though that at $100k, people wouldn't concern themselves with their day-to-day bank balances. If some weird $1000 thing comes up, you ought to be able to pay by credit card and have the money by the next pay day.

[Proud Public Servant]

34. Exactly (nt)

[surrealAmerican]

40. It's a valid point about low interest on savings.

More people would have savings if the interest rates were higher - at least in the upper income brackets.

[Rex]

20. Wow, I love the bragging! All I got to say to them is 'cool story'.

[Demonaut]

26. living beyond your means, cut the fuck back and do it NOW

[cstanleytech]

49. But I like my little luxuries of food and heat!!

[Demonaut]

60. eat the food and your body will generate heat...simple!

lol

[SheilaT]

31. I am likewise somewhat astonished at this information.

What's even worse, is a lot of people couldn't even put such a charge on a credit card, which is even scarier.

And again, this is in reference to those making good money.

It is true that a lot of people do spend more than they should on lots of things. Cars. A lot of people don't really buy a car so much as sign up for five years of car payments. It doesn't seem to occur to many of them that they should buy something that results in less than the absolute max car payment they can afford, maybe even only take out a three year loan, then when it's paid off save that amount for a few months, or even longer, so they take out a smaller loan next car. Eventually, it's possible to be in a position to pay cash for a car.

And yes, I do understand limited income. I live on one. And I live alone, so I don't have the benefit of someone else contributing to the household.

The essential problem is really that will live in a culture that encourages consumption. We are constantly surrounded by blandishments to buy, to spend, that we can't live without some particular item. TV and movies only make it worse, because they rarely show the actual way real people live. They show people living in nice apartments or homes that their characters could not, in real life, possibly afford. And on TV the shows are constantly interrupted by ads that suggest that of course you can take that impulse trip to a Greek Island, of course you can buy a brand new car, surely you deserve to eat out every night of the week. And so on. Since I moved to where I currently live some eight years ago, and decided not to buy a TV, I have found that living on a limited budget is a lot easier than it otherwise would be.

[Manifestor_of_Light]

33. I buy a new car every 20 years.

Whether I need it or not. They are inexpensive Japanese cars. No Jaguars for me or Bader Meinhof Wagons!

[Jim Beard]

63. I buy them new and usually pay cash and drive them until the wheels fall off.

[Manifestor_of_Light]

65. Yep, that is what I tend to do too.

A couple of years ago I bought my fourth car in 40 years of driving. Had bad luck with Mazda transmissions. Two cars.

[bluestateguy]

41. "Have difficulty" or just can't do it? There's a difference.

I could come up with it, but it would be very inconvenient.

[Cryptoad]

44. Middle class is dead adn gone,,,, thanks to the GOP

[silvershadow]

52. I rec'd. But can we have a link please? Thanks! :D nt

[Liberal_in_LA]

64. link

http://bigstory.ap.org/article/965e48ed609245539ed315f83e01b6a2

[silvershadow]

70. ty!

[TrollBuster9090]

53. A household that earns less than $50,000 and has trouble coming up with $1000 for an emergency is..

tragically normal.

But a household that earns more than $100,000 and has trouble coming up with $1000 to cover an emergency is just really bad with money, and incapable of living within their means.

This poll is ridiculous. People who have six figure family incomes generally have credit card limits over $10,000. If a $100K family is already living with a maxed-out credit card, they're just really bad at budgeting their money. It has nothing to do with the anemic recovery from the Recession.

[KelleyKramer]

66. That's the first thing I thought, credit cards

If you are making over 100k then why are your credit cards maxed out


.

[meaculpa2011]

77. Agreed. n/t

[Zing Zing Zingbah]

57. If you have a large family

and make around 100,000 then I could see having trouble with an unexpected $1000 expense. Also if you live in a very expensive area, like New York City or something, I could see that too.

[madville]

61. I live out in a red, rural area

But it's cheap living, and I like how sparsely populated it is. People think you're rich if you make more than 50k out here. The median household income is like $26 or something.

[bhikkhu]

68. Too many variables unaccounted for in the article to make a judgement

100k is a good income, but people making that tend to live in very high cost of living cities, where its not such a good income. Many older people are saddled with high medical bills or issues, regardless of income. Many younger people are saddled with big student loan payments. Many people have kids, young or old, which strains a budget of any size.

Of course many people are also naturally inclined to buy the best house they can afford, and the best car they can afford, and the best lifestyle they can afford (regardless of how high or low that may be), and then their monthly expenses trend very closely to their monthly income.

I went through many years with kids getting by fairly well on a low income in a low cost of living area, and I would always have been able to put together $1000 if I had to, but never without difficulty. Currently I have a better paying job and some savings for retirement, so it wouldn't be so hard. I still drive an old car, spend basically nothing on clothing, dining out, movies, travel, sports or music, all the normal things people do for enjoyment. I think its easier for me because having lived poor there's always a looming sense of anxiety that the floor will give way someday and I'll be right back there. I have savings, but not because I'm in any way superior to people who go out and spend their money and enjoy life.

[malaise]

71. Interesting

Where does the average credit card debt of $16,000 per person figure in that?

My earnings devalue daily thanks to the IMF but I can find US$1,000 if I needed to - I hate credit cards so we don't have that debt and we don't buy what we don't need.

[taught_me_patience]

73. Absolute financial insanity if you make over 100k/yr and cannot come up with 1,000 easily

Under 50k, I can understand.

[Orrex]

74. I maintain a small printing press and can produce quality $1000 bills on demand

You'll never see a finer likeness of Abraham Lincoln.

[PersonNumber503602]

75. This really depends on where the people live.

According to most COL calculators I looked at, someone earning $65,000/yr in North Texas would have to earn $111,500 in San Francisco or $143,700 in the NYC area.

Now I'd say that $65k where I live (N. Texas) is decent enough that someone should be able to save up at least some money. But I can see how that could get difficult at times if that $65k between two adults who have a couple kids.