Is the $400 number realistic?
I don’t think the question in the survey was asked in a way that generated a statistically useful result. I can’t believe that such a sizable fraction of people would be living with no reserves unless they assumed they had ready access to credit for unexpected expenses. And the struggling to get by is likely highly skewed by expectations (needs vs. wants). I spent 8 years in grad-school and post-docs, and in today’s dollars my stipend was $18,00/yr to $24,000/yr. We thought it was a great life. Parties were pot-lucks, entertainment was hiking and camping and the intramural softball, volleyball, … teams you were on, you chipped in gas money for the people who had cars and drove, …. I was even able to contribute at least $1000 to a Roth IRA every year. But our expectations were that the future would better, and it was. Perhaps after my end of year Roth contribution I got down close to $800 in my checking account (today’s dollars), but I had a credit card sent to all graduates from my college I never used with, in today’s dollars, an $8000 credit limit. I would bet that a large fraction of the people who say they don’t have $400 to cover unexpected expenses 1.) have credit that could cover it, and 2.) don’t have good common sense fiscal intelligence (something that most people my age learned from parents who had lived through the Great Depression, including going hungry at times). Do you think that many people are struggling to keep up with needs (food, shelter, clothing) or wants (cable TV, iPhones, eating out, nice cars, …)?
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