Survey Shows 40% Don't Have More than $500 In Savings

[The Stig]

Original Story By CBS Philly

By John Ostapkovich

PHILADELPHIA (CBS) — A survey of about 1,100 Americans finds that more than 4-in-10 respondents admit they don’t have more than $500 in readily accessible savings.

The survey is a kind of departure for CreditDonkey.com, a website that compares credit card deals. Not respondents all were poor. Some had big houses, big mortgages or 401(k)s, but still no more than five Benjamins to rub together right now.

Jill Michal, president and CEO of the United Way of Greater Philadelphia and Southern New Jersey, reacts to the lack of liquid assets.

“It doesn’t shock me, but it does scare me. You know, we often say that the reason so many people fall off the edge in a tough economy is that they’re standing way too close to it, and I think this is a perfect demonstration of that.”

Michal says there’s a lack of training in personal finances.

“This is about life skills. It’s not just about arithmetic and reading, but we have to be able to teach the next generation that we have to be able to save for our own futures and we have to be able to save for those risks that could come our way.”

Michal says United Way has programs that teach work- and life-skills, although she thinks a lot of this ought to be done in schools or homes.

In addition to the emergency savings question, the survey found that 54% of respondents don’t have a savings plan in place, and 45% are afraid they’ll never be able to save.

Yikes. So even during short term, localized SHTF events, these folks are going to get desperate fast if they can't use their credit cards to pay for essential items.

[TroubleShooter]

I say it is higher, like maybe 70%.................

[prepguide]

I would agree with TroubleShooter. I think its higher than 40% especially given the state of the current economy.

[ak474u]

Not at all surprising. Gas prices, food prices, etc. have depleted lots of people's reserves, especially since so many are out of work. I think even people who normally HAD reserves are tapped out if facing at least one family member out of work. My wife is a serial saver, so we're good, I just can't go out and buy stuff anymore like I used to. I'd love to know what percentage of those surveyed are maxed out on CCs as well.

[idahobob]

Now, I wonder if this article is talking about folks that have FRN's in a savings account in the bank.

IMHO, keeping ANY FRN's in the bank is downright foolish. Keeping a certain amount in an emergency fund that you can readily access is prudent.

Bob
III

[cwconnertx]

I have to admit to sacrificing liquidity to chase returns or save some money from time to time. I've depleted cash reserves to buy things at a good deal, and I've done the same things to make investments.

The one thing I hold on to and don't liquidate is my silver, I've sold a little when it peaked in the high 40's but bought it back and more since it came back down.

Liquidity is good, and I encourage it, unfortunately I often fail to heed my advice. I put too much in 401ks and IRAs, etc to chase tax savings. Lock up too much in investments that are illiquid from time to time. I do have at least 500, but as a proportion of my income and spending that is a sad joke.

So, I recommend liquidity but often have very little myself.

[Echo2]

I'm surprised the number isn't higher.

A lot of folks are maxed out well beyond their means...even if they have a larger income....they can't rub 2 nickles together.

[Fatty]

With the way the dollar is going, I've been buying things that will continue to have value regardless. Once I've reached the level I'm seeking, then I'll return to the FRN saving process. And that % has got to be closer to 75%-80%, esp if you count those who can't even get unemployment benefits anymore.

[RedJohn]

I'm surprised the number isn't higher.

A lot of folks are maxed out well beyond their means...even if they have a larger income....they can't rub 2 nickles together.

They must not be counting the millions that are below 0.

[White Tiger]

This is one of my first posts - So pardon me if Ive wandered into a private discussion - but I thought the site was interesting and I could add something to the conversation.

Here is a chart that shows the value of gold from 1971 to 2004 ($45 per ounce to $700)



Here is a chart that shows the value of gold over the last 5 years ($800 per ounce to over $1700 per ounce):



This means that as they print/digitize dollars...they make all the dollars in existence worthless because they make more of them. If something is in scarce supply, it is more expensive - but when you have too much of something, it's value is diminished.

Rich guys, who have a lot of wealth, look to preserve that wealth in times of instability. They stop investing so much and start buying and holding actual Gold (and silver). There is only so much Gold above ground, so if really rich guys are buying it up - and there is a limited supply of it - then it is getting more expensive.

To give you an analogy - in the 1800's you could walk into any suit maker in America and have them make you a tailored suit. You could pay for that suit with one $20 gold piece. Today 200(+) years later you can walk into any suit maker in America, have them make you a tailored suit, and you could pay for that suit with that SAME $20 gold piece.

...the difference isn't that things have gotten more expensive...it is that we have diminished the value of the dollar so much - that instead of it costing $20 paper dollars to buy a tailored suit...it now costs $1700 paper dollars!

Don't worry about saving dollars, the value is dropping daily. Store up items you need that you can buy today....because in a week, a month, a year...those things will cost MORE...and the dollars you saved will be worth less than they are today.

And don't buy that thing about interest compounding - there isn't a SINGLE investment you can buy that will generate enough interest to keep pace with the rate of inflation (the difference between the cost of what you bought a year ago versus what it would cost you to buy today).

The value of the thing(s) you bought will be the same - or possibly more - if you bought the right things.

Don't get me wrong, this isn't meant to say "eat drink and be merry for tomorrow we die"...as long as cash exists, you will need some for basic transactions...just don't think your savings are working for you right now. Some banks have begun the phase of economic meltdown where you pay them interest to preserve and protect your deposits...