I’m Not Shocked That Half of Americans Don’t Have Emergency Money


It's all fine, right? Ahahahhaha

by Stephanie Kaloi

woman standing at desk with paperwork

A few weeks ago The Atlantic published a piece that was designed to shock its readers, it but didn’t surprise me at all: “The Secret Shame of Middle-Class Americans: Nearly half of Americans would have trouble finding $400 in a crisis.” And no, they were not talking the working poor; they were, as advertised, talking about the actual middle class.

The Federal Reserve Board regularly conducts surveys to ascertain the “financial and economic status of American consumers” and they find out all kinds of data. But the stat that seems to have really caught some of us off guard is this: “The Fed asked respondents how they would pay for a $400 emergency. The answer: 47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400 at all.”

When I first read the piece, this didn’t blow my mind whatsoever. I saw no reason to put four hundred dollars in italics and be like, “OMG CAN YOU BELIEVE IT? 47 percent of Americans wouldn’t be able to come up with $400 on the spot,” because that seems pretty reasonable to me. I have spent most of my life being an American who would have a hard time coming up with $400 within a few hours. Now, granted, since becoming an adult, I have more or less always had a small smattering of family from whom I could borrow the money, and I recognize that this makes me fortunate. But shock and dismay were not two of the reactions I personally registered upon reading that stat. Because as the author says:

I never spoke about my financial travails, not even with my closest friends—that is, until I came to the realization that what was happening to me was also happening to millions of other Americans, and not just the poorest among us, who, by definition, struggle to make ends meet. It was, according to that Fed survey and other surveys, happening to middle-class professionals and even to those in the upper class. It was happening to the soon-to-retire as well as the soon-to-begin. It was happening to college grads as well as high-school dropouts. It was happening all across the country, including places where you might least expect to see such problems. I knew that I wouldn’t have $400 in an emergency. What I hadn’t known, couldn’t have conceived, was that so many other Americans wouldn’t have the money available to them, either. My friend and local butcher, Brian, who is one of the only men I know who talks openly about his financial struggles, once told me, “If anyone says he’s sailing through, he’s lying.” That might not be entirely true, but then again, it might not be too far off.

Depending on my job situation, I’ve been there throughout the years. For example, a year ago, I was living in Oregon and running a successful wedding photography business that gave me a tremendous amount of joy (and brought in plenty of cash). Then we moved to Tennessee last August, and I missed most of the couples down here who were booking spring and summer weddings. My husband enrolled in a work-related course and didn’t get a job for four months, and suddenly everything was on me. Booking weddings became mandatory in a very real way, and what I was getting paid for ten hours of work a week—as I was just starting at APWwas a quarter of our income. And this isn’t just a right now kind of thing. The nature of my life as a working adult has always been half self-employment, half stringing together part-time gigs. This is partially by choice: I wanted to stay home with our child but needed to have a job, and I like having flexibility with my job (even if it means I don’t make as much as I could) but also the nature of this kind of work. Things are up lately—both my husband and I recently received significant-for-us promotions (yay, APW!) and I’m booking weddings into 2017—but suffice to say, I get paycheck to paycheck.

And it’s not just people cobbling together their work life the way I do. My husband is surrounded by nurses who similarly live check to check, and we both know plenty of teachers and creatives who face the same truth. The reality for a lot of Americans is that every check counts. Sure, you can make sure your bills are paid, pay for childcare and your health insurance, and pay down some of your endless student loan debt, but building a savings account? That’s not always feasible.

One reason reading this piece was a challenge for me is because while I totally relate to the 47 percent of Americans who are in a similar boat, I don’t entirely feel bad for the author himself. Yes, money woes impact more than those who speak up about them, and I do applaud him for putting his voice out there, but having parents who can cover your kids’ educations at Stanford and Harvard isn’t exactly a plight that makes me full of pity. Particularly when your story is that you drove yourself into a financial black hole by deciding to put your kids in expensive private school, an option most of us can’t even fathom.

What does make me feel many things is this:

Looking at annual inflation-adjusted household incomes, which factor in the number of hours worked by wage earners and also include the incomes of salaried employees, doesn’t reveal a much brighter picture. Though household incomes rose dramatically from 1967 to 2014 for the top quintile, and more dramatically still for the top 5 percent, incomes in the bottom three quintiles rose much more gradually: only 23.2 percent for the middle quintile, 13.1 percent for the second-lowest quintile, and 17.8 percent for the bottom quintile. That is over a period of forty-seven years! But even that minor growth is somewhat misleading. The peak years for income in the bottom three quintiles were 1999 and 2000; incomes have declined overall since then—down 6.9 percent for the middle quintile, 10.8 percent for the second-lowest quintile, and 17.1 percent for the lowest quintile. The erosion of wages is something over which none of us has any control. The only thing one can do is work more hours to try to compensate. I long since made that adjustment. I work seven days a week, from morning to night. There is no other way.

This I relate to heavily. This is the kind of thing that keeps me up at night, and not just for myself—for all of us that experience this. If people who already make a lot of money are making more, and bottom third of us aren’t… where will we be in five years? In ten? Running your own show can regularly mean working morning to night (and often times well into the night) seven days a week, but that kind of work breaks a mind and body.

APW: could you come up with $400 in an emergency? Does this article freak you out? do you relate—or do you not? 

Stephanie Kaloi

Stephanie is a photographer, writer, and Ravenclaw living in California with her family. She is super into reading, road trips, and adopting animals on a whim. Forewarning: all correspondence will probably include a lot of punctuation and emoji (!!! ? ? ?).

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  • Anon

    I can say no with certainty on this, as we had an emergency last night. Our beloved elderly dog had to be rushed to the vet and after $700 of tests, we found out he was in kidney failure and needed to be put down. Getting that terrible news while knowing in the back of my mind that we didn’t have the money was one of the worst feelings I’ve ever experienced. Thankfully, we worked out a payment plan and were able to make the right decision in saying goodbye, but I’m not ok today on any level.

    • Bethany

      I’m so sorry for your loss. Losing a pet is so hard. I literally start to cry when I even think about how my cats are starting to get in the “senior” age group. <3

    • Lawyerette510

      I am so very sorry. Internet hugs and sending you thoughts of strength in such a crap-tastic time.

    • Annie

      I’m so sorry. Losing an animal is never easy. Sending good thoughts your way.

    • Amy

      I am so sorry for your loss as well! What a terrible ordeal to go through.

    • Camille

      So sorry that happened. I just lost one of my pets this month and I felt like I was losing my mind with grief the first couple days, but it got easier to remember the happy moments as time went on. Hope you find some peace and healing. <3

  • knolan12

    I have $400 exactly in savings, so an emergency would wipe me out. I’ve been using Digit since the beginning of the year so half of that has been saved through there. I had a solid amounts of savings, but being in weddings and trying to pay down my credit card bill wiped out my savings. For me, I opted to stop putting $100/month into savings and putting that towards my credit card. Granted, the credit card is still killing me buuuut that’s another story (no one should advise a 23-year-old who just moved to Boston to get a credit card, MOM). Anyway, I’m trying to use YNAB to also get my budget under control so I can save more, but I haven’t spent enough time figuring it out and I keep getting frustrated in trying to fix my budget. And then there’s the other expenses, like student loans. How do you determine how much to pay off vs. save for other things? It’s a big headache. I keep telling myself it’ll all be okay “one day”.

    • Lisa

      YNAB has a lot of great webinars and YouTube videos on this very topic, but I believe they boil down to: create an emergency fund for yourself first and then pay off your debt. The reasoning is that, if you encounter an emergency while you’re working to pay down your original debt, you won’t be able to cover an unexpected cost and might drive yourself further into debt. I commend you though for working so diligently to pay off your credit cards!

      • knolan12

        I definitely need to spend more time on their webinars and YouTube videos. I think the secret lies in there haha I’m assuming you’re a user, do you wait for transactions to pop up in your accounts or do you manually it whenever you spend something? I always get overwhelmed when a lot of things clear at once and I need to go through and assign a category, etc.

        • Lisa

          I’m still using YNAB4 so I don’t have the direct import feature. This means my husband and I are very careful to mark all of our transactions as they occur. I had a difficult time getting him to use it at first, but now we’re both fully committed and always ask each other if the other has entered the transaction when we’re out together. I have to admit that I actually don’t even really do the clearing/reconciling anymore because we’ve become so diligent about it. I also do a daily check of all of my bank accounts and credit cards, which includes a brief glance at YNAB to see which categories have gone down since the previous day.

          We’re technically already following all of the rules, but even I still watch the Whiteboard Wednesdays on a weekly basis because it’s good to remind myself what I’m working towards and that there’s always a way we can be doing better!

        • Ashlah

          I personally log into my bank and/or credit card site at least once a day and enter any new transactions. I don’t use the mobile app much, but this method pretty much catches everything as it happens/a few hours later. For monthly bills, you can set up a scheduled transaction, and maybe that would make it a little less overwhelming to stay caught up on entering everything? (Note: I’m still using YNAB4, so I’m just assuming the scheduled transactions are also on the new version).

        • Eenie

          Do it every time you use money. Use the app. Just get in the habit. Weekly reconcile so it doesn’t get overwhelming. Auto payments should be added in once you see them pop up (cable, internet, etc) so you don’t have to think about them.

        • JC

          I enter my transactions on YNAB after they have cleared my bank account. (I try to check this at least every other day, so it doesn’t get overwhelming.) I do this because my boyfriend and I don’t share accounts, but we do share expenses (electricity, cable, groceries, etc.) I want my YNAB transaction to reflect how much I actually paid for each category, so I will enter a YNAB transaction for, say, half the grocery bill, and then wait until I’m reimbursed for his half before marking it as complete. About once a week, I then reconcile accounts to confirm that all my calculations are correct.

    • Vanessa

      If you can truly commit to no longer using your credit cards, you should check out Prosper. I had been paying tons in credit card debt every month only to see the overwhelming bulk of it go to interest, so my debt wasn’t really going down. I got a peer-funded loan through Prosper at an actually reasonable rate (I want to say around 6%?) and now am making steady progress on the debt.

    • emilyg25

      Depending on what your credit card balance, interest rate and income are, you might consider a debt management plan. I went kinda crazy with credit cards in college (they gave me free pizza to sign up!) and it was truly life-saving for me.

    • LucyPirates

      Just a few tips from someone who has had to learn budgeting the long way and had a credit card
      1. every little helps – even if you can only put in 5 or 10 a month into savings, or even less, it all adds up and you will be surprised how a little growth motivates you to find a little more, especially when you don’t miss it. Keep chipping away.
      2. In your mind think ‘Do not touch the savings even for emergencies ever.’ I often built up a little reserve of £200-£400 and then would blow it on ’emergencies’ that were not. Justifying taking money out means you will always find an excuse, do not touch it! (In an actual real emergency, you will have no choice but to use it)

      Now I have a budget and no debt / savings for a wedding with a plan for after but it took self control and the realisation that actually I had to control my spending / know exactly where every single penny was going so I could turn things in the right direction. The relief of lifting off the credit card was amazing – it took me 18months to do but you can definitely do it.

  • anonandonandon

    Editor? Editor? Anyone? Please edit the grammatical error in the first line of this essay, thank you!

  • savannnah

    My fiance and I are in the middle of digging ourselves out of bad money habits and some consumer debt even though we make good money and should not be living paycheck to paycheck. While the amount is less than what many people talk about here and other places it still feels totally suffocating by itself, let alone while planning and paying for a wedding. I am guilty of just trying not to think about it all too much which is probably how we got here in the first place.

  • Cassidy

    Part of the quote from the Atlantic article: “The erosion of wages is something over which none of us has any control. The only thing one can do is work more hours to try to compensate.”
    VOTE! Get active in local and national politics. Things like the new DOL overtime rule at the national level, and the increases to minimum wage we are seeing at the state and local level are certainly a step in the right direction.

    • jo

      And organize. Unions are real. Or at least, they were. And one of their major roles is in fighting back against declining wages amidst increasing profits. When workers get together to negotiate with employers, wage gains can be made.

      • ART

        Just heard Pres. Obama speaking about this last night and I’m like, I can’t believe the hate for unions, from people who would be perfect candidates for unions! Come on!

    • Cellistec

      Yes! Anyone part of the League of Women Voters in your area? I’m curious but not sure if it’s for me.

      • R

        My mom is. In our area the membership skews older (40s-60s). But they do really great work and I’m sure they’d love to have you!

        • Cellistec

          I think the membership skews older in my area too. But hey, might as well give it a try!

  • Kayjayoh

    That brief, surreal moment when you misread the headline as “I’m Not Shocked That Half of Americans Don’t Have an Emergency Monkey.”

    • lady brett

      i am not only shocked, but seriously disappointed. it shows a real lack of judgement, frankly. i can’t believe more people aren’t prioritizing this.

      • Fiona

        Well it’s a huge priority for me. But I’m counting pennies when it comes to groceries, and one thing goes wrong in a month, and my budget is shot, as is the part of the budget dedicated to an emergency fund. I think that’s at least partially the point of the article.

        • Eenie

          I think she meant the monkey…

          • Fiona

            Oops. Well that’s awkward.

          • Emergency Monkeys could be a huge priority for you!

          • Kayjayoh

            This is probably a situation where an emergency monkey could help. :)

  • Jessica

    A few years ago I couldn’t pay for a damn thing, other than rent and the cheapest of food. I went to the optometrist and found out that I had to get a new prescription–and my then-boyfriend-now-husband had to pick up the bill (this was before I found the awesome eyebuydirect.com–if you need glasses, they start at $9 there and sometimes have a BOGO sale). I paid him back over 6 months.

    With a steady income that increased $10k over a year, I now only have student loans. I was able to pay down my credit cards aggressively (30%APR is no joke, aggressive is the only way to do it when you start making more money). I worked really hard to save up about $4k for an emergency fund if I lost my job. I’m so fucking proud of that money, you guys. But I have to say, if it was just me without my husband, I would probably just barely have $500 in an emergency fund. It’s hard.

    • Anonomoolah

      Awhile back when I was upset about not having the money for something, or my student loan payment, or whatever, my husband said, “Sometimes I wonder how you’d manage to live on just your income.” And I said, “Well, if it was just me I wouldn’t have had to pay for a wedding so I’d probably be doing okay.” (This is probably a textbook example of NOT fighting fair)

      But the reality is yeah, I’d never be able to afford our house, our vacations, our life if our money wasn’t intermingled.

      • Jessica

        There is that reality, but also the reality of not going out as much, not buying as much food (since you’d only be buying groceries for yourself), and some other costs that reduce when you’re a couple who wants to have some fun together. There’s trade-offs.

        • Anonomoolah

          Exactly! I just really thought it would be better for us to not go down that road. Next thing you know, we’d have made a spreadsheet of what it would have cost to stay single!

    • Emily

      I have always been able to put together $400 if not out of savings, on my credit card or worst case scenario I could borrow money from family. That being said, I am also positive that I could not afford my current life style without my husband’s income. Sometimes it makes me nervous being so reliant on that money.

  • emmers

    I’ve always been kind of save-y. There have been a few times, like during my 6 months of unemployment, when this would have been hard. But when I began working a steady job, I started out saving $100/month, plus a pre-tax deduction for retirement, and have gone from there.

    But, I have had a lot of privileges to get here. My undergrad was paid for by my family. Most of my grad degree was paid for by a teaching program. During my unemployment I lived with family, and was able to volunteer to develop skills. And I was lucky to get a steady job during the recession. Once I did get a job, my salary was $32K for years and years, so my savings always hovered at around $1000. Since my salary increased I’ve saved much more, and being married has also helped. But it’s hard to save money when you don’t earn much, and I know much much harder if you don’t have steady employment/don’t have various privileges, like education.

  • Hannah

    Uh yes I could come up with $400 in an emergency. I grew up without that kind of security so having it as an adult is everything to me. I *get* paycheck to paycheck too but find it unbelievable and frustrating that it’s reportedly 47% of people putting themselves through that lifestyle. And I’m not trying to insult anyone at all, it’s just an incredibly stressful way to live.

    When I read that article I was pretty outraged. Every couple of paragraphs I was stopping to rant about the author’s string of poor decisions. My final conclusion there is that the author has a fundamental lack of understanding about what it means to be able to afford something. He claims he could afford his condo, yet he was not able to pay for his kids’ school or save a dime for a rainy day while living there. I wish it was more acknowledged that you have to factor some percentage of personal savings in before working out what you can afford.

    • Rachel

      That is exactly the feeling I had reading the article too. I understand that there are truly low income people stuck in a cycle of poverty. But this guy’s version of living paycheck to paycheck is just really irresponsible financial choices.

      In her writing, Stephanie bristles at being labeled a “consumer” instead of a “citizen”. But the reality is, tons of Americans act like “consumer” is their main identity. We think expensive houses, condos, cars, clothes and electronics will make us happy and prove our worth. In reality, you get a high from purchasing nice things, and then the happiness quickly fades and that is your new normal. I have been slowly breaking myself of this mental trap – and it feels sooooo good when you succeed. Becoming less materialistic makes me so happy.

      If you can’t fathom what I am talking about, I highly recommend Mr. Money Mustache. He talks about how he, his wife and son live a super luxurious and comfortable life on 30k a year.
      http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/

      • Eenie

        They do not live a super luxurious and comfortable life. Their priority for being independently wealthy is above all others, like driving their car and using a dryer. I haven’t found his tips very useful personally.

        • Hannah

          I’m with you that Mr. Money Mustache is not really my bag. But personal finance blogs in general totally are! Like I mentioned above, I didn’t grow up with fine examples of personal finance surrounding me, so I really owe a lot to the handful of PF blogs that I got into when I got my first decent paying job in college. I really bristle when I see people saying that they were never taught money management, schools should teach it, etc. because I’m so passionate that anyone with an internet connection can learn about PF thanks to some of these bloggers. If you want to learn, the information is out there, and it’s free. (And this is not a response to any of the commenters here. Like I said I am into PF blogs so I just see this said all the time.)

          • Eenie

            I am also very much into personal finance savvy. If someone reads this and sees MMM as a great blog, they could be turned off pretty quick if they could never imagine restricting themselves to that level. There’s lots of other great resources: YNAB, Dave Ramsey, jlcollinsnh.com as a few examples. Not everyone has a goal of being independently wealthy.

          • Rachel

            Agreed! Different personal finance goals, systems, etc. work for different people. Look around for a blog or resource that resonates with you.

          • Bsquillo

            Side note: I was initially turned off by the tone on MMM (though I thought the advice was generally good), but liked the guy way more after hearing an interview with him on a podcast. I realized he’s way more empathetic in real life, and surprisingly kind of a big hippie who just doesn’t believe in that much personal consumption.

          • CMT

            Huh, I had the exact opposite reaction after reading a long piece about him in the New Yorker. He totally rubs me the wrong way.

        • Rachel

          Its definitely not an typical American consumer’s idea of luxurious. But I love how MMM re-defines luxury to match his values – only working when a project sounds fun to them, traveling whenever and wherever they want, buying top quality food, etc.

          So, I would say if his lifestyle sounds horrible to you that is totally valid. My only humble suggestion is – consider your values, and then look at how you spend your money and if it aligns with those values. I am not saying you are not currently all lined up :) just that MMM has helped me see I could be spending way less on a few things that I don’t value.

          I definitely don’t live exactly like he does – I work full time and own a car. But his super extreme version is a really great example of how you can live happily on very little money – it challenges my assumption about what I need and what truly makes me happy.

          • Alexandra

            Coming up for air from the MMM blog that I’d never heard of before this: Holy cow this guy might as well be me. I LOVE this. Even though I love my job and plan to work until I die. My husband and I are totally this guy.

        • Her Lindsayship

          I just started reading the introductory page and I have a bad taste in my mouth too. I can see how that advice is fresh and exciting for some – but most people do not have the ability to save 50% (FIFTY PERCENT?!?) of their income, and it’s not because they’re “exploding volcanoes of wastefulness”. Like DUDE, slow the judge wagon, if you don’t recognize your privilege within the next paragraph I’m out.

          He didn’t. I’m out.

          • Eenie

            Yup! If it’s useful to some, awesome. I find it very off putting. It got such rave recommendations that when I read it I could hardly believe it.

      • stephanie

        “In her writing, Stephanie bristles at being labeled a “consumer” instead of a “citizen”. But the reality is, tons of Americans act like “consumer” is their main identity. We think expensive houses, condos, cars, clothes and electronics will make us happy and prove our worth. In reality, you get a high from purchasing nice things, and then the happiness quickly fades and that is your new normal. I have been slowly breaking myself of this mental trap – and it feels sooooo good when you succeed. Becoming less materialistic makes me so happy.”

        Same! My husband and I first started paying attention to the consumer/citizen label about 8 years ago when we started watching Democracy Now! to get our daily news, and realized how jarring it is to constantly be labeled a consumer by mainstream news (Democracy Now! is totally independent). I actually have something coming up later this month that will dive into consumerism and clothing a bit, but just wanted to say.. yes. I agree with you.

        • Sarah McClelland

          oooh- consumerism and clothing and how we live in that intersection is a thing I have been trying to figure out for our family for a while now…. looking forward to that!

      • toomanybooks

        I mean, honestly, sometimes a nicer place to live can help. I recently moved from a depressing apartment complex with a long list of problems, one of them being murderers and gunshots in the building. Now we live in a nicer area where we are grateful every single day to have the use of our own washer/dryer and dishwasher. It’s lifted such a burden off of us that we can take care of cleaning things so much more easily (before, we would just… not do it… and live in filth). I can walk to the grocery store instead of staying inside because I just can’t deal with all the catcalling that I used to go through on the trip to the store.

        The rent is higher, and I do feel bad about that. But I also appreciate being able to go to sleep at night instead of lying awake with high anxiety listening to every little sound, sure that something bad was going to happen. I know there are studies that after a certain point, money doesn’t affect happiness. But we haven’t reached that point yet.

      • April

        Yay Mr. Money Moustache! I’ve been reading his blog for the last couple of years and it really resonates with me. I really like the environmental focus.

  • Lisa

    I might be in the minority here, but I honestly can’t relate to not being able to afford $400 in an emergency. I don’t want that to come off as bragging or insensitive, and I acknowledge that I’ve had a lot of privileges that have helped me to be in this position, not the least of which were parents who worked very hard to make sure that I could start life off from a good financial place. I’ve spent a lot of my adult life since college downplaying the advantages my family of origin gave me and trying to be aware of my friends’ struggles so as not to seem inconsiderate. $400 is not an insignificant amount of money to me, and it would pain my saver heart to part with it, but I could easily pay that money and still have six months of living expenses left over.

    • Eenie

      Since high school I’ve always had at least $1000 in the bank. I have never lived paycheck to paycheck. I also had a family support system that stressed the importance of financial knowledge. $400 is a lot of money.

    • Bsquillo

      Same boat here- due mostly to growing up with privilege and a family that taught me a lot about managing money, I’ve never truly been in a financial emergency. I have always had some savings, and it’s really important to me to prioritize saving and investing.

      I would describe my relationship with money as having a lot of respect for it: I certainly don’t think making or accumulating money is a bad thing, but I also don’t spend carelessly either. Even though we’d be fine to cover a $400 emergency, $400 still feels like a lot of money.

      What I do worry about is beyond making ends meet, and more about larger financial goals: will we ever be able to afford a house? Will we be paying my husband’s student loans for 20 years? Will we actually be able to afford childcare and a kid’s college education in the future? Even though we’re now technically middle class, these things still feel like a stretch…as I’m sure is the case for most people.

    • CP2011

      Same here. I definitely can see how it happens though– had the cards fallen differently, my finances might look very different. That said, I do focus a lot on money management in order to have that feeling of security. If we take money out of savings, most discretionary spending is slashed until we rebuild some of it, so that it never becomes depleted (hopefully!). There are definitely plenty of people who are doing all they can to make ends meet, but it’s not hard to all see others buying new jewelry, tattoos, cars etc while still insisting they are broke.

    • Rose

      I’m with you too. There may have been times when I was in college that I didn’t have $400 in my account, but ever since I first started getting a regular paycheck, it’s been there. A lot of it is luck and privilege, for sure, but feeling that financially insecure is very foreign to me. I’d hate spending that $400, but I wouldn’t worry a huge amount about it.

    • Tree

      Lisa, I too do not share the experience of being that close to “zero”. I’ve been working some sort of job almost continuously since I was 10 (flyer delivery for years! Don’t worry, not child labour) and received an allowance from my parents for as long as I can remember (until I was about seventeen and working an actual money-earning job). So, between my RESP that my parents set up for me when I was an infant, and putting money away literally for fifteen years already, making some smart financial choices, and being born into a white middle-class Canadian family, I’m doing fine. Reading through the comments I’m realizing what a HUGE benefit it is to my finances to be Canadian! Our tuition is usually $5,000/year unless you’re in a private university or professional program (mine was $10,000/year but I got discounts due to great grades and my mom working at the university). Emergency room trips are free. Most medical tests are free. Doctor visits are free. Things that cost money are elective surgery, prescriptions (yes, that includes birth control, though there are some clinics that will subsidize), and optometry. We get a year of paid parental leave from the government as long as we’ve put in enough hours of work to claim it – it’s not a lot of money, and not everybody benefits from it, but it’s better than three months without pay in the States!

      I feel like having $400+ in savings is a combination of luck, and making good choices with your luck. I got given a great start by my parents, in a single-child (single-income) household where there were enough resources to go around even if we weren’t rich. I lived at home till I was 22, which I could do because I have reasonable parents, but also chose to do and didn’t have to choose. I got a full ride scholarship for my Master’s, which I was able to achieve because I had good support and am fairly academically gifted, and I know how to navigate academia (but I also had to apply for it and accept it and go into a field where I could get funding). Things have been tight during my Master’s – living well below the poverty line in terms of income most of the last three years – but I have had the savings buffer to handle it. It’s scary to watch your savings slowly decrease without knowing where the next steady paycheque is coming from though!

      I know it’s hard to watch people make what seem like bad choices with their money even when they complain about being broke, but I want to extend empathy there. I have owned a car for the past three years despite not being able to “really afford” it, because it made a world of different for my mental health and social life in this winter, sprawling, prairie city I live in without metro service. I knew my financial situation was temporary – or…I believed it would be. I have bought more expensive groceries at the farmer’s market because I believe in local food and I love the atmosphere and the way the food tastes. I pay for internet at home when I can also access it at school. I pay for a smartphone. I’ve bought clothes I didn’t -technically need- and gone out on dates with my boyfriend that were a bit more expensive than I probably should’ve accepted. I’ve taken trips home that cost hundreds of dollars I could have put towards more “sensible” items, yet I desperately wanted to see my parents. It is HARD to constantly deny yourself! The “right balance” may seem obvious from the outside but it’s rarely obvious from the inside. There is also only so long that you can eat into your “stuff capital” without replacing things, and only so long that you can eat into your “don’t buy shit” willpower without caving.

  • Daisy6564

    I have never, ever been in a position where I could not come up with $400 cash quickly in an emergency. I attribute this first to the massive amount of privilege I have having grown up with a family who paid for my college education, taught me how to save, and made debt a dirty word in my vocabulary. “Never charge more than you have the cash to pay for,” and “Always pay off your credit cards every month,” are edicts in my family. I do think that a culture of “easy credit,” poor personal finance habits and a general fear of talking about or thinking about money are partly to blame for the situation many middle class people (not truly poor people) find themselves in.

    Before people jump all over me, however, I am scared looking into the future. Due to things like wage erosion and the massive inflation of housing costs and college tuition, the middle class will never really have a chance to get ahead. Although I have that emergency fund cushion and no debt, I am also stuck in the situation that I cannot foresee ever being able to afford to buy a house or pay for my own children’s’ college education. I can’t even afford to replace my 20 year old car. Admittedly this is because I refuse to go into debt for it and I can’t manage to save up the cash, all of my extra money goes to retirement and my husbands’ tuition.

    I may have started from a place of privilege and done everything “right” and I still likely won’t be able to achieve the American dream of doing better than my parents (or even as well as them).

    • anon

      I actually think that some of the issue is due to people being so scared of debt that they attempt to aggressively pay down things like principal on student loans instead of saving that extra money. I know folks who are so averse to debt, like you’ve said you are, that they don’t really realize the importance of an emergency fund.

      • Daisy6564

        As I mentioned, I was super privileged to not have student loan debt. I actually think that a moderate amount of student loan debt and mortgage debt is unavoidable these days and not all bad. I think consumer debt (credit cards, car payments, etc.) is pretty much all bad. I agree with your comment and another poster’s, that an emergency fund is a priority over eliminating debt. That said, I also think too many people do not fully think about the debt they are agreeing to take on (sometimes because they are 17!) and wind up in a never ending cycle of owing other people money. I want to avoid that cycle at all costs.

        • Sandy

          *As a disclaimer, I don’t have $400 in savings right now, but could come up with it in an emergency.*

          While I can imagine having a safety net, or being debt free (for short periods), I absolutely CANNOT imagine buying a car without taking out a loan. We are currently shopping for a used car and have a reasonable budget for it, thanks to a loan from my FIL, but I’m still amazed at how little car I can get for 10K. You cannot buy a new car for less than 18k and the thought of having that much in savings is beyond anything I’ve ever considered.

          It’s amazing how much things can vary from one perspective to another.

          • Daisy6564

            I totally agree, that is why I said in my first comment that despite having a substantial savings cushion and no debt, I cannot afford a new car (by my definition of afford). I have prioritized an emergency fund and paying down debt. I drive a 1996 Toyota and kind of desperately need a new car but cannot bear the thought of taking on consumer debt and cannot manage to save up $20k to buy a car in cash.

            My belief is that consumer goods (like cars) should be bought with the cash you have on hand and not with credit. Loans should be reserved for major long-term investments like houses and education. With a house you typically plan to be there for the life of the 30 year mortgage, pay it off and then own real equity. A house will appreciate in value. A car will only depreciate in value and only last for 10 years or so, possibly a shorter time than it takes to pay off. In all likelihood, I realize that if my car does die I will have to buy a new one on a loan. Cars are a more significant purchase in relation to wages than they once were. I still think it does not make sound financial sense to be indebted for something that will never create equity for you but I may find myself in that position.

      • Mrrpaderp

        It all depends on that interest rate, though. I graduated in 2010 and my federal student loans were as high as 8.5%. Even now after refinancing they’re around 4%, still higher than my mortgage. I’m all about investing money rather than paying off low-interest debt – I can make more than 2% back in the market so I’m not going to pay off my 2% car loan faster than I have to – but if you have high interest debt then you have to get yourself out of that hole.

        • NotMarried!

          I think interest rate vs. investing only comes into play for savings BEYOND a 3-6 month emergency fund. The margin in your finances by having money available for emergencies is worth the variance in interest income.

        • anon

          At least part of an emergency fund should be kept entirely separate from investments.

      • April

        This was me. It ended up working out okay for me but for a while it did lead to a cycle of “pay down debt, emergency, put it on credit” which was not very useful.

    • Lisa

      Although I have that emergency fund cushion and no debt, I am also stuck in the situation that I cannot foresee ever being able to afford to buy a house or pay for my own children’s’ college education.

      This is where we are right now, too. My husband made the comment the other day that, technically, we’re middle class, which is just mind-boggling to me. Yes, we live decently comfortably and make contributions towards retirement, but we wouldn’t be able to afford to purchase a home anywhere we actually want to live at our current income level. We’d have difficulty paying for daycare for children if we had them, which means someone would have to stay home. We’re middle class, but if any other recurring debt crept into our lives, things could easily become more difficult for us.

      • Carolyn S

        *technically I think middle class literally means paycheck to paycheck, with no ability to save at all. The term has been co-opted by politicians to make everyone feel like they are included, but a lot of people who think they are middle class actually are much better off than that.

        • Lisa

          I’m seeing that middle class is defined by sociologists as any household making $35k to $75k with an extension to $100k for UMC. The term in and of itself is very vague, but I don’t think it necessarily has to do with the ability to save extra income.

          • Carolyn S

            There are probably a lot of definitions – I guess I’m just identifying that it’s a classification that is thrown around so much it has lost almost all meaning…
            http://factually.gizmodo.com/87-percent-of-americans-call-themselves-some-version-of-1697524227

          • Lisa

            I agree with you that the term is ambiguous and that perhaps in our collective search of “the American dream” we now classify anyone who comfortably lives within that as middle class. The circumstances assuredly vary region to region. Being of a moderate income where I currently live would not be enough to survive in the Bay Area, where my husband grew up. We get by, we contribute to retirement, we save some, and we put aside money to pay my husband’s student loans when he graduates, but we are by no means living grandly. That fits what I believe to be the definition of middle class.

          • emilyg25

            It very much depends on where you live: http://money.cnn.com/interactive/economy/middle-class-calculator/

            My mom wants me to move closer to home, but even if we found jobs that pay the same, we’d take such a hit in standard of living.

          • Lisa

            This is something I’ve tried to explain to my husband, too. He really wants to move back to the Bay Area, where he grew up, but I don’t think that, with salaries at comparable jobs in that area, we’d be able to have anywhere near the quality of life we currently do unless we moved in with his family members.

          • I moved to the Bay Area recently, with a $25,000 pay increase. My quality of life is significantly worse than when I was living in Pittsburgh, PA. I also feel poor, because 50% of the cars on the road are Mercedes or Tesla-level luxury cars. Also. I live in a closet.

            Even a $25k pay raise won’t make up for the cost of living increases compared to the rest of the country, really. Not in the Bay Area.

          • JC

            It’s so hard here in the Bay Area. I didn’t realize until I got here, so hard. We’re doing just fine, for now, but I don’t yet see how it’s going to get *better*. Some days I am so in love with this place and its people and the path that brought me here– and other days I just want to cry because of the toll it takes.

      • Keeks

        At some point I realized my husband & I are actually in the top 20% of household income for our metro area. That still blows my mind, because I have no idea how we would afford daycare AND our student loan payments.

    • emilyg25

      A lot of car companies are offering crazy good financing these days. My car “loan” is 0% interest!

      • Eenie

        Same! It ended up being cheaper over the long term even though it meant we had to get an extended warranty to qualify for the 0%.

      • NatalieN

        Which car company if you don’t mind my asking? We’re pretty close to one or both of our cars dying…

        • Eenie

          It’s usually a promotion and you need to qualify still. You need really good, not just average credit.

        • emilyg25

          Mazda. I got mine 3 years ago, but we just checked VW and they had like 0.9% or something.

    • Tree

      Move to Canada! We have (mostly) free healthcare, cheaper housing in the smaller cities, affordable tuition, paid parental leave, and a significantly higher minimum wage. Seriously, a good social safety net is WORTH taxes and I’m proud to be starting my first full-time job and, in the next couple of years, start contributing to all the benefits I and others are going to be able to lean on (I hope).

  • rg223

    The original article pretty much terrified me, and it’s one of the main reasons I am now reconsidering having a second kid down the line (I have not said anything to my husband about this article because we are currently buying a co-op in NYC and the author’s experience of not being able to sell his because the board rejected the applicants is terrifying as a current buyer/future seller, and I’m not going to put him through this terror, haha).

    And to give everyone a sense of how much of “being able to afford an emergency” is based on privilege, check out Act 3. http://www.thisamericanlife.org/radio-archives/episode/573/status-update

    • Carolyn S

      I was going to reference that episode of “this american life” as well! It shows the difference between not having 400 bucks in an emergency and not having 400 bucks OR a safety net, which is a very big difference.

  • Annie

    I’m not shocked either. The majority of people absolutely do not live within their means, it’s always one more expensive dinner with friends, a new car, an all inclusive trip to Mexico. They are trying to keep up appearances to show how “well off” they are, but they will never actually be well off unless you know… they inherit it from family or marry someone with money. Sadly, for the majority, to have money these days, you need to be born with it or have it handed to you. Sure you can work your entire life slaving away for 80 hours a week to buy a house, but when you factor in your own debt, spousal debt, houses, cars, kids, college, health insurance, and everything else that is expected to be bought and paid for, no one ever really has money to be comfortable. And on the off chance they do, they still aren’t happy. Not shocking though, it’s designed this way for a reason ya’ll…

  • Alexandra

    Privilege or no privilege, not being able to put your hands on $400 in an emergency should probably be a warning sign the equivalent of chest pain, pain in both arms, and shortness of breath (heart attack symptoms). You have to do something about this! It’s not ok!

    I graduated from college with a small student loan and some medical debt. No help from parents since I was 21. Became a public school teacher, bought a crappy used Corolla, got a second job working nights and weekends at a coffee shop, lived with two roommates, paid down my debt and saved up a $5000 emergency fund within three years. So…nyah, I guess.

    To me, the more relevant issue is: I’m pretty judgy on people who don’t save, which makes me a jerk. The comments on the Atlantic Monthly article were SUPER judgy….I almost felt compassionate by comparison. People be hatin’ on bad financial planning, that’s a fact.

  • Danielle

    This is a very American problem. I lived in the Netherlands for over a year during the recession and people there are CHEAP. They don’t buy extra stuff, often only have like 1-2 credit cards (actually many stores don’t even accept credit cards, or didn’t back then), and are a lot less material-oriented in general than us. Apartments are tiny so you can’t fill them with stuff. Many people rent, not own, their apartments.

    I will also say that the government provides a wide safety net for people, including funding if your rent comprises a substantial portion of your income, and a “13th month” of salary to use for vacations. (Plus 5 weeks off for vacation per year. But that’s another topic.)

    Anyway, America is different from other rich countries because our economy runs off our debt. We are encouraged to buy stuff, rather than save money, because that’s what drives our companies. Our society is just pure capitalism, unfettered by strong social programs that *actually* care about us as citizens, not just consumers.

    DIdn’t mean to go on a rant… I love this country (and omg am very glad to not live in Western Europe with all its problems anymore) but damn, our culture has a LOT of growing to do.

    • emilyg25

      Yes, consumerism is a huge part of our culture. Sometimes I hear on the radio that the economic outlook isn’t great because people are buying less. Shouldn’t that be a good thing? I read an article that said that over the last 75 years, the average American house size has doubled, even as the average family size has shrunk almost in half.

      • Jessica

        My cousin and her husband built a brand new house in the suburbs that is more than double the footprint of our Victorian house. Both homes have 3 bedrooms and 1.75 bathrooms (they may actually have 2 full baths, I can’t remember). They got what is called a “bonus room,” which is another living room on the second floor.

        Last time I was there I marveled that she could find furniture for every room.

      • Keeks

        We live in 100+ year old house, with 2 bedrooms. Everyone asks us when we’re going to buy something bigger to raise our kids in – and I tell them I found the 1920 Census records that show 6 people lived in our house. We can stay here through 1 kid, or 2 kids of the same sex, or even 2 kids of different sex for quite a few years.

      • Danielle

        I know, isn’t that a short-sighted way to view the economy? It has to do with how “growth” is measured and is totally problematic. Companies are supposed to earn more money each year to be considered successful. How will they earn more money if we don’t buy more of their stuff?People in countries like China save 1/3 to 1/2 of their income, and it’s considered a problem for growth.

        I’m really ready for a new, feminist view of economic growth that focuses on long-term sustainability. Like, what is the long-term value of preserving wetlands instead of increasing suburban sprawl to build subdivisions with bigger houses, for example?

        • emilyg25

          And that incorporates additional measurements of value beyond $$$!

          • Danielle

            Yes. That is partly what I meant. How can we measure the value of having woods by your house – a place to walk, clear your head, and breathe somewhat cleaner air? What is that worth in terms of overall happiness and life quality?

            And on the other hand: what are the costs associated with the stress of not having savings, or not having clean air, or living next to a polluted river?

            It’s hard to put a dollar amount on those things, but I would try to do so in order to speak the same language as economists and business people.

          • Chris

            Danielle, there is actually a whole branch of economics (environmental economics) that asks those kinds of questions. I’m one of them, so I obviously concur with you statement that measuring these things in a systematic way is a necessary first step to being sure that they are counted in the balance sheets.

            e.g. https://www.amazon.com/Valuing-Environmental-Natural-Resources-Econometrics/dp/1840647043?ie=UTF8&redirect=true&tag=typepad0c2-20

          • Danielle

            Thank you Chris. I’ve got to check this out!

    • Michela

      As an American girl marrying a Dutchman, I can attest to this difference. In my experience (albeit limited to his family and friends), the Dutch do not part with their money easily. It’s been a source of friction for us as we combined our households, but I’m learning so much about budgeting from him and our financial position is much better than it was even a year ago. Feeling quite grateful for my fiancé and his parents, who gave him a monthly stipend starting at age 10 that had to cover his clothing (“needs” like new socks and underwear as well as “wants”), activities with friends, soccer uniforms, soccer club fees, school outings, etc. No wonder he’s such a brilliant budgeter- he’s had 2+ decades of practice!

      • Lisa

        I absolutely love this idea of micro-budgeting. It also reinforces the idea of focusing on your priorities from a young age, too.

        • Michela

          The brilliance is that, unlike allowances which are usually more fun money, this method taught him he how to budget for incidentals like twice yearly soccer team fees and not-fun-money expenses like new socks and underwear. This means he’s great about budgeting for our twice yearly car insurance payments and not-fun-money expenses like teeth cleanings and car repairs. Dutch parents FTW!

      • Jessica

        Ha, my mom tried to get me to buy my own clothes as a teenager with a similar system, but I hoarded that money so much she ended up stopping because I wasn’t buying anything useful at all.

        If I had started when I was 10 and had obviously outgrown my clothes it would have been a better lesson.

        • Michela

          Exactly! And if he blew all his money on an expensive Ajax Amsterdam jersey, his parents didn’t bail him out when he needed money for a school trip or new underwear. He learned from a super young age, which explains his budgeting brilliance now at 31.

  • Carolyn S

    There is this old canadian series of shows “staring” a #bosslady financial guru where she spends a month with people identifying their financial problems. The best part is that it talks real numbers – as in, here is how much you make, and here is actually how much you are spending and so many people HAVE NO IDEA. Budgeting needs to be a core part of our education

    • MC

      YES. Having spent the last 6 months educating my husband on budgeting I especially agree that this needs to be a mandatory part of education.

    • knolan12

      100% agree about the education. I realized that part of my financial issues comes from the fact that I never learned how to budget, live within my means, etc. My parents waved as I moved off to Boston and didn’t give me an ounce of financial advice. I realized they just didn’t forget to either. My mom was so mad that my dad was helping my younger brother with his budget (he’s 23, but married and with a house) saying that he needed to “figure it out” like she did. I was livid, he should absolutely be taught how to budget. All three of us ended up in some serious CC debt and it could have definitely been helped if someone taught us the proper way to use credit cards and create a budget. Luckily, we all ended up with significant others who were taught these things and are helping us out of the hole, but still, this isn’t some innate knowledge.

    • Meg Keene

      I do not use Calculous. I do need to be financially literate. I don’t understand why we don’t teach it. Not just budgeting. You need to know what a money market fund is, or how to invest that savings. And the VAST majority of people around me have no idea.

      Two things I’m constantly shocked people I consider educated and well paid can’t tell me:
      – How much they need every month to pay their bills
      – What a mutual fund is

      • Anon

        Calculus, Meg.

        • K

          Don’t be that guy, Anon.

      • AP

        PREACH.

      • Alexandra

        I have been trying and trying and trying to get the high school where I work to let me teach a financial literacy class (my husband and I teach the Dave Ramsey class) but they keep saying no. The reason? It’s going to make parents too uncomfortable when their kids learn how most principles of good financial planning directly contradict what their parents are actually doing.

        • Her Lindsayship

          YIKES

        • That’s terrible!

        • H

          You had me up until Dave Ramsey. He’s an abusive jerk personally, and he gives bad advice.

          • Alexandra

            Ah Dave Ramsey. Yes, we have a love/hate relationship with him. My husband actually loathes him–I’m more tolerant. We don’t follow all his advice, because some of it is too rigid and dogmatic for us. But the class…we haven’t found anything that is as well-organized. We stop the video every twenty minutes or so to roll our eyes and also open up a few different ways of looking at the issues he brings up, but man–very productive conversations. The people in our classes have paid off tons of debt, made a lot of good insurance decisions, learned to budget…it’s been a good experience every time we’ve done it, despite our personal objections to his mannerisms and some of his money advice.

          • CP2011

            Agreed! Many (though not all) of his suggestions have worked well for us, but I find his politics and worldview off putting.

          • Alexandra

            Yeah…like we have such a detailed, obsessive budget that (gasp!) putting all our expenses on a credit card and paying it down every month actually is exactly the same as cash for us. And we live in Hawaii, so the airline miles are really valuable if we ever want to see family.

            Also, we keep our student loan because it has an income-based repayment plan (useful in case we go down to one income due to having children) and will be cancelled in four years because of a federal program for my husband, who is a social worker. Paying down the full balance and taking our savings down to $1000 (we could have done it, but we didn’t) seemed dumb to us. The math on it didn’t work–we would have lost out on about $20,000 by doing that. I actually called into his show to see what he would say about the student loan, and he yelled at me and said we should pay it down. There’s sort of no room for any other possibilities in his system. Which I actually don’t blame him for–gotta keep it simple, it’s a nationally syndicated program. But yeah…you can learn a lot from him without being a slave to the program.

        • Lisa

          That’s absolutely ridiculous. High school is when kids need a financial planning course before they naively take out tens of thousands of dollars in student loan debt. Imagine what having a course that teaches them about what that debt repayment looks like could do for them!

      • Grace

        My siblings all had a personal finance class in high school. The teacher told them to lease their cars. #headdesk

    • karyn_arden

      Shoutout to a fellow Canadian who watched Gail Vaz-Oxlade whipping budgets into shape!

      In addition to her shows (Money Moron & Til Debt Do Us Part), she’s written a heaping pile of books, which you can find info about at: http://www.debtfreeforever.ca/books.html. I always liked watching her shows – her approach to managing money and paying down debt seems REALISTIC. <3

      • Carolyn S

        Love me some Gail Vaz-Oxlade. The show “princess” in particular has a way of making me feel very good about my life choices….

  • jo

    Okay, technical question- are we saying that people don’t even have $400 of credit on a card that they could use to pay for something? Or are we saying that people don’t have $400 cash? That’s the borrowing part, right? 47% of people would have to borrow by using a credit card? Help me out, so I get it.

    • NotMarried!

      Yes. Putting the $400 on a card would be considered taking on new debt and is the point. That folks don’t have $400 in cash (or the bank) available.

    • Cellistec

      I was wondering the same thing. At the moment I think our credit cards would be our emergency fund. I’d honestly rather incur more debt than withdraw from our house savings, which I know is insane.

  • NotMarried!

    I can cover a $400 emergency.

    When i first graduated Law School and found employment (not as a lawyer of course because … economy), I was about $90K in debt and did the pay-check to pay-check thing for several months, always stressing when a quarterly bill would come due and not knowing how I was going to keep current. I found YNAB, learned to prioritize savings over debt reduction in the short term, and built up an emergency fund before re-attacking my school debt.

    Advantages – i lived with family for almost 2 years post graduation to minimize expenses and attack debt. Due to scholarships, I *only* had $90K in debt. I had a back-up degree (accounting) that was marketable when my legal education wasn’t. I also live in mid-america. The Cost of Living out here is nothing compared to the coasts.

    Disadvantage – One really – as the first in my family to attend college; so I was CLUELESS about various ways to finance university. I remember talking with a friend in LS who had negotiated a stipend as part of his aid package. The thought never crossed my mind and my incoming ‘stats’ were such that I probably could have.

    • Meg Keene

      I will say that second jobs and side hustles get much harder when you have kids. I feel like I don’t have enough time in the day with one job, and if I had to have two (which so many parents do), I’d be stuck barely seeing my kids. It’s just so hard that so many folks are in a situation where this is what it takes to make ends meet.

      (And even still, if I’m being honest, I do have a side hustle. It’s writing books, and it is how we’ve gotten it all together.)

      • NotMarried!

        Childfree here – and I can’t imagine.

        As it is, I manage my side-hustle with a ton of help at home from my boyfriend. On days I work and then teach – He handles the fur-babies and dinner. He also drives me to court when its out of town so I can focus on case-prep.

  • From my experience, staying out of debt and putting aside any amount of savings boiled down to always spending within my means. When I graduated college in the middle of the recession and couldn’t find a decent job, I made the decision to move back home and save up rather than rack up debt by continuing to live independently. I know I’m lucky to have parents that gave me that option, but it was still a tough choice regardless. And when I DID get a job I made sure to move into an apartment that was within my price range. Up until I got married I never had cable (actually we still don’t!), I drove a shitty car, and hardly ever went shopping or bought anything frivolous. I sacrificed what was needed to stay out of debt and continue to save. Hell I didn’t even get a credit card until I was 25 and that was only because I finally felt I could use it responsibly. Don’t get me wrong, I know how it feels to live paycheck-to-paycheck and vividly remember the days where money was tight and I had nothing to spend. But I feel like so many people in my social circle are in financial trouble simply because they’d rather drive nice cars, regularly eat out at restaurants, and take fancy trips than have any money in their savings in case of an emergency. Priorities, people.

    • Abby

      I’m totally with you. I found out recently that my friend who is $5000+ in credit card debt, bought brand new Louboutin’s on that credit card because she “needed them”. I completely understand people who need to put emergency things on credit cards because they don’t have the cash but that frivolous type of spending baffles me.

      • Eenie

        A friend put $1000 on a credit card to pay for a family trip. I could not talk her out of it. She didn’t think it was a big deal.

    • Meg Keene

      There are people in financial trouble for those reasons. But I think it’s important to remember that most folks are not in that situation, they just might not be the ones in your social circle. If you can’t move back in with your parents (which is indeed a very lucky break), or don’t have a chance to go to college, or or or or…. your financial situation spirals, and spirals fast.

  • Rachael Whaley Pate

    I remember crying when food went bad in the fridge once when I was in grad school because it was another few days before we got paid again. I understand paycheck to paycheck.

    Then I graduated and got a job, he got a promotion and all of a sudden we were high income for our area.

    I just got laid off so now it seems we’re back where we started. But we went nuts paying off debt after I graduated so now we aren’t sweating a job loss because we’re debt free except our mortgage and have a 6 month emergency fund. We basically never quit living like grad students.

    I know not everyone has the education we do, but my husband is first generation college-all paid by student loans. We don’t have family to borrow from.

    It’s hard not to feel resentful when other couples we know have houses in great school districts, new cars, fancy vacations, kids activities, while we don’t have any of that. But you never know what someone’s financial situation really is. Our friends could have debt up to their eyeballs. They probably think we make way less than we do. I do think a lot of it comes down to choices and personal behavior, but I know it takes a certain amount of privilege to make those choices.

    • Rachael

      Wow, okay- the above comment posted with my full name somehow. Damn chrome autofill. Could a mod go ahead and delete that for me, please?

    • “we basically never quit living like grad students.” <— This is us too. We have our mortgage, car payment, and some student loans, but we live like we're broke in order to keep money in savings and pay for plane tickets (family lives overseas).

      Would I love to eat out more or have nice shoes or have bought a brand new car instead of one that was 6 years old? Yes. I'd love to pay off the rest of my student loans faster. But I also love not freaking out when my sewer line breaks and I'm faced with a $3300 bill. Although I still cried, because I didn't WANT to spend that money.

  • Her Lindsayship

    Today I got a text from my undergrad University (where I am also currently employed) that read: “Make a gift to [University] and you could win $1k towards your student loan payments!” I want to go off on a big rant about this but I’m just going to stop there and try to remind myself that I am very privileged. I have a ton of debt from undergrad, but I have a job that pays the bills. I don’t have much in terms of savings, but I do seem to be in a better place than half of Americans, so I’m grateful for that. I may not be in their position now, but I can absolutely relate.

    For those who can’t, try to take a step back from the judgment reflex and consider that maybe it’s because you had a little head start. The amount of money we pay for education and health care in the U.S. is stifling. And these are not luxuries in our culture, they’re fundamental. It’s very difficult to get to a place where you can save if you didn’t start off there. To some extent it’s a matter of financial savvy, but mostly of privilege, and it’s so important to recognize that.

    I can see how this guy who got himself into debt with a flashy condo and expensive private school tuition is a frustrating example, but I don’t think he represents the majority of Americans.

    • Jessica

      What the fuck kind of marketing strategy is that?

      • Her Lindsayship

        THANK YOU. That text made me hate myself a little bit for working here.

    • emilyg25

      I work in higher ed marketing and that’s the stupidest fucking campaign I’ve ever heard of. Please send them a note letting them know how it makes you feel.

      • Her Lindsayship

        Maybe I should! Thanks for the insider input. I’m glad folks here had the same reaction I did!

    • Rhie

      My undergrad alma mater ran a campaign on their website last year that said, essentially, we guarantee your kid will get a job when they’re done! As a headline. I had no words. And also no desire to tell anyone where I got my degree for at least a month afterwards.

    • Side note: there’s a lot of interesting stuff that goes into the psychology of raffles, and how having a chance to win something big is more motivating than a guarantee of something small..

      • Her Lindsayship

        I was thinking about this. If $1k amounted to like two or three months of my student loan payments, then *maybe* I would be motivated by it and toss them a tenner for funsies. Unfortunately it amounts to one month plus some change, and the loans are so suffocating to me that I already feel I don’t have an extra cent in my paycheck, and if I did you can bet I wouldn’t be paying it back to my employer. *ahem* But anyway yes, I can see what they were going for there, but I still find it disgusting.

        • Lisa

          Ha, this is how I felt when I was working for the school where I got my master’s after graduation. The IT guys and I referred to our employment there as the “tuition repayment plan.”

    • Meg Keene

      HEALTH CARE. It’s… unreal. I pay for myself and two kids out of pocket every month, and it’s an amount that would be rent, anywhere but in the Bay Area. It’s just staggering.

  • Non

    Except for the year I moved to New York, I have always had about $600 of “cushion money.” Over the past 4 years I have managed to keep it at about $1,500. But that is FOUR YEARS of getting raises, switching to higher-paying jobs, saving what little I could, etc. My parents keep telling me that I need to have $20K in savings at any given moment, not counting retirement money, for things like down payments on property or unemployment or (currently non-existent) child-related expenses. That seems completely unfathomable. Other than completely changing career paths, I just don’t see how I could have enough disposable income to save that much.

  • Sarah D

    I definitely have $400 for an emergency, and honestly, more than 10 times that because I have an emergency fund. A lot of the commenter are saying that they were privileged growing up which helped them-I didn’t have that. But my parents taught me to save and not live beyond my means. I went to college and got 3 masters degrees and now, at age 34 I’ve managed to pay off the $100k pkus of school loans AND save for retirement. I just had my first baby and childcare has definitely given me a challenge, but I’m continuing to practice my principles of living within means, which means simplifying the rest of my life so that I can pay for baby. It’s not glamorous but I don’t have money stress.

    • Anon

      Privilege has many faces – including parents who teach their children to save and not live beyond their means.

  • J

    I’m one of the 47% *sheepishly raises hand*. I do not have $400 in savings, I have $20. If push came to shove and it was a legit emergency, I could ask my parents and they’d help us out, but my husband and I wouldn’t be able to cover it on our own at this point. I have fallen victim to both stagnant wages and stupid credit card decisions in my early 20’s. My husband, who does not have have a college degree, has been working for minimum wage (or slightly higher) for years, and never learned money management. Add in 2 separate car payments (I totaled my “free” car and eventually sharing 1 car was no longer feasible for us), $130k in student loans, and a rising cost of living and you get us living paycheck to paycheck for years at this point. 9 months ago, we moved to a different state and are, surprisingly, doing much better. We actually have SOME money left over once all the bills are paid! We’re still trying to get our budget under control, but I haven’t used credit cards in more than year, we’ve got 11 more payments on the first car, and I no longer have to choose what bills to pay on time. For years, it’s been my secret shame that we have struggled so much with money, especially when all my friends started buying houses, so articles like this actually make me feel BETTER. I’m not the only one! It’s been a long, hard road for us to get on a more stable financial footing, and we still have a long way to go (for instance, building up emergency savings!) but we’re starting to be able to visualize a day when paycheck to paycheck is no longer our reality. I can’t wait.

    • Emily Hill

      Just out of curiosity, what states did you move from/to?

    • Kalë

      Thanks for being bold and brave enough to share! As you noted, it can be really reassuring to know that other *REAL* people, not just a 47% statistic, have similar struggles to you. While I have more than usual saved up at the moment, it wasn’t always the case, and I’m super familiar with the secret shame of the $0.67 savings account (because you moved your last $13 from checking to savings to buy tampons and lettuce and the sale chicken breasts).

  • Fiona

    I relate to this so much. I feel like I’m finally getting my footing (two job upgrades in the past year) and for some reason, I STILL can’t put any money away or make more than the minimum payment on my car. It’s frustrating and terrifies me about the future and about kids (if I can’t pay for two people, how in the world would I pay for three???). I usually manage to have at least a few hundred for emergencies, and I’m planning well for retirement and paying all the necessary bills, but I didn’t imagine it would be this hard, especially with a decidedly middle class salary.

  • Bsquillo

    I have always been able to afford a $400 emergency- I’ve had a lot of privilege and a decent amount of good luck in my life. I’m proud of the saving habits I have built over the years.

    However, even with a good emergency fund and good budgeting habits, it’s the big looming expenses in the future that terrify me: how will we afford a house, kids, childcare, college, etc? And if it feels unattainable to us, at a solidly middle-class income, how on earth are people making it work who have less resources than we do? I totally empathize with folks who are in dire financial straits; it’s not necessarily irresponsible spending that’s getting them to that place. It’s unsustainable healthcare costs, housing costs, childcare costs, etc, that are draining people’s accounts.

    • Eenie

      This is the same for me. I once asked someone I know who has six kids how he does it. And apparently, he has zero savings. His parents and in-laws have savings. That’s his plan.

    • Anon

      Bless you for your empathy! The other thing that I keep thinking is that $400 is really not enough to cover an emergency… depending on the emergency. And one massive, unexpected cost can easily beget another, like let’s say somebody’s heater goes out in the middle of winter, and now they have to cover the cost of a new heater AND possibly a hotel while their heater is replaced. Throw in a little slip on the ice and now there’s a trip to the emergency room. Sometimes things happen and, in the US at least, we’re not great about social safety nets.

      • lildutchgrrl

        Yes, I thought this as well – I could cover a $400 emergency out of savings, but very few emergencies I can think of only cost $400! My cat’s surgery bill from the vet was $2000 (non-life-threatening, but necessary for his health and well-being), for example. The surprise increase on my property taxes was over $500. When I had a gallstone attack while out of town and had to go to the ER, the bill was over $1000 (or would have been if my insurance hadn’t covered it – which I called and checked on before entering the hospital). These things will set you back, if they don’t upset some shaky financial underpinnings entirely.

  • Amy

    As with all things, this is more complicated than it seems. Wages aren’t matching the rise of housing and general cost of living inflation, cost of education and student loan interest is through the roof, and the cost of actually getting that first job is getting more and more expensive. In addition, the emphasis on saving, balancing the checkbook, budgeting, living within your means, the idea that you absolutely don’t have to keep up with the Jones’s, and that the more stuff you have won’t actually make you happier are not ideas that are generally pushed from a young age.

    While general societal constraints are encroaching more and more on the little amount of wages that people earn, the emphasis on saving, money management, and planning for retirement is kind of going out the window at the same time. Young adults are more targeted for opening credit cards but less so for savings accounts. Social Security is seen as THE retirement fund, even though it might not be solvent in several years and even then, it wouldn’t cover all monthly expenses. Budgeting and money management are no longer subjects in school in most areas.

    I can absolutely understand how some folks wouldn’t have access to $400 even though they are the most frugal and considerate of their spending habits. Stuffs expensive!! However, I also feel like there are a TON of people who just never got that message that they have to spend wisely!

    I am very fortunate in that my parents helped me out with my college but after that, I was on my own. I am even more fortunate that I had parents that talked a lot about money and spoke openly about how they managed their money. I saw from a young age what worked and what really didn’t. Because of that, I have focused a lot of effort on staying comfy in my living situation but saving and spending wisely (definitely splurging every now and then). I drive a functional but not beautiful car, I live in a beautiful home with some great roommates, and I have saved up five figures for my retirement at a relatively young age. My fiance comes from a very different dynamic in that his parents never talked about money. It’s been a real eye opener for him for us to have more conversations about money and management. We both don’t make a lot, but through smart use of our meager funds, we’ve been able to pay off a huge portion of his school debt and we’re hoping to not have any debt from our wedding.

    I say all that not to brag at all. I know there are people who don’t have flexibility (i.e. families with kids living with roommates is not super ideal) and people who are maxed out. I just want to show that there are some exampled that if you put a little emphasis on paying yourself first instead of buying another car or wasting it on cable or stop buying $5 coffees from Starbucks, you can keep a little bit more cash if your pocket.

    There. Off my soapbox. Thanks for listening.

  • Jane Doe

    I grew up with pretty much zero financial education. I don’t have any idea how much savings my parents (special ed teacher and social worker) have other than “not much”, and it was definitely paycheck-to-paycheck at some points during my childhood. I have super hang-ups now about spending money on anything. My fiance tried to put an $80 Lodge casserole dish on our registry and I just had a MELTDOWN because it wasn’t the $20 corningware one. Despite the fact that I have $10k in my savings account 2 years after graduation (and $74k in student loans). Which, it’s a registry item, we’re not purchasing it! It was just such an emotional sucker punch.

    If I didn’t have those savings, I don’t know how I would function. My parents would lend me money but I will never ever ask them for it because I don’t want to put them in debt this close to their retirement. So yeah, I have $400 for an emergency, but that doesn’t prevent me from stressing about money.

  • Her Lindsayship

    It’s interesting how this article affects everyone differently – I think many people expect that “middle class” America looks exactly how their personal financial situation looks. I grew up in a household that came up from lower to lower middle class, but I lived in a pretty rich suburb, but I also worked in minimum wage jobs for many years, so for a long time I was pretty sure “middle class” was being able to buy a home for like $100k (I grew up in TX where $100k homes are actually a possibility). Now I have friends who grew up in upper middle class homes, who think that having a $600k home is about average.

    Tangent: those friends also think that my fiance and I are cheap motherfuckers because we occasionally turn down expensive outings or trips, but it’s because they assume we’re in the same position as them, and we’re really not. I’ve tried to be pretty up front about my ridiculous student loan debt to get them to be a little more sensitive about it, but I think the problem is they assume my fiance makes like double what he actually makes, and he doesn’t feel the need to correct them. Anyway, this is not a very bad problem to have, most of the time we’re just amused by it and continue living our lives the cheap-motherfucker way. But it is interesting

    • AP

      I notice this too, and I think it’s related to the watering-down of the term “middle class” that other commenters have referenced. For instance, my “middle class” experience was growing up on around $40K/year for a family of 4, mother filed bankruptcy after her divorce from my father, living in a rental house, parents using credit cards to pay for emergencies, grandparents who could help pay for school clothes and prom dresses. My husband’s “middle class” experience, on the other hand, was more like $100K for a family of 6, owned their home and a sailboat, parents helped pay for college. And our personalities reflect this difference. I’m much more frugal than he is and have always taken care of myself, but he’s much more savvy with money and much more confident in his ability to make money when he needs it. I work for money, he makes money work for him. And it’s this difference in mindset, more than anything, that I believe divides the classes into lower-middle-upper.

    • CommaChick

      In my cross-cultural journalism class, a large lecture hall of several hundred students, my professor had us participate in an exercise. He listed the wealth categories [poor, working class, middle class, wealthy, top 1 percent] and had us raise our hands as to which ones we thought we were/had grown up as. No one identified as poor, about 4 percent identified as working class, about four percent identified as as wealthy and everyone else identified as middle class. Our professor said that’s typical, and almost everyone identifies as middle class, when in reality, many of those people are working class, lower-middle, upper-middle and wealthy.

  • BD

    I agree with pretty much everything being said here. Wages are diminishing, cost of living is skyrocketing (even in less desirable areas) and even if you are smart enough to have a mutual fund account or two, the benefits of such an account are nowhere near as good as they were for our parents/grandparents. It’s just so much harder to get ahead.

    At the same time though, it amazes me how willing people are to live above their means – or maybe they just don’t realize that’s what they’re doing, because as others have already mentioned, no one is being educated about budgeting anymore. I make what many people would consider a very good income, but to look at my lifestyle you would never know it. That’s because after factoring in money each month for rent/mortgage, utilities, food, savings and retirement (all things I consider necessary) I found I actually had little money left for other things. I don’t even have cable!

  • I go back and forth. Sometimes I chastise myself for feeling “entitled” to a comfortable middle class life just because I went to college and “did what I was supposed to do.” I shouldn’t feel entitled to anything. But then I also rage against the fact that I likely won’t be able to afford a modest 1-bedroom apartment on my own until I’m in my mid-thirties. That just makes me sad. And I’m a relatively conservative spender. I tend to live by that 50/20/30 rule (no more than 50% for fixed expenses, at least 20% for savings goals, and no more than 30% for flex spending) even though it’s more like 47/30/23 for me. I’m trying to be smart with my spending and live with an abundance mindset instead of a scarcity mindset, but it’s HARD to not WORRY about money ALL THE TIME. I practically had a heart attack when I had to empty my savings to pay my taxes last year. But once I reminded myself that I had clothes on my back, a roof over my head, and food in the fridge, it helped me keep things in perspective. Now I keep my tax money and my emergency fund money separate haha. ;)

  • I didn’t really sympathise with the Atlantic writer personally. But like you, what DID resonate was the terrifying issue of inequality, the growing gap and the changing labour market.

    (And yep, could definitely come up with $400. Am fortunate to have always been able to say that.)

  • Anon for this

    I can come up with $400 NOW, but I haven’t always been so lucky. I wish some of the commenters on here wouldn’t be so quick to judge those who don’t have any savings. I sent The Atlantic a story about how the cost of birth control financially flattened me and they included it in their reader notes section, in case you’d like to read it. http://www.theatlantic.com/notes/all/2016/04/your-stories-of-financial-struggle/479157/#note-479928

    • CP2011

      I usually try to avoid negating responses here, but I truly haven’t found seen quick judgement here about this. Most people have prefaced with statements of privilege and gratefulness as far as I can tell. Everyone is allowed to express their reaction as they feel it.

    • Angela Howard

      Totally off topic, but if you’re interested in another BC method, I just wanted to recommend Paraguard – which is a non-hormonal IUD. Most common side effects are heavier periods and increased cramping, but I never needed anything more than an ibuprofen or a super tampon.

      • Lisa

        Any more permanent solution BC plans (IUDs, nexplanon) are much more cost-effective than the pill, especially if you’re not planning on having kids for a few years!

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  • nutbrownrose

    Right now I’m struggling with paying the credit card off vs saving for the very soon move out of state. The move is for my mental well-being, and our relationship’s future, but it’s not strictly necessary. Except it would probably kill me to stay in my minimum wage, no prospects job much longer.
    Honestly, I have 400 I could use if I had to. But it’s in my savings account, to be used for getting out of the godforsaken town I live in. I still live paycheck to paycheck. I’ve had to put things on my credit card I needed (like groceries for 2 people), and then not been able to pay the card off at the end of the month. But technically I could, except it’s in the savings. And I treasure that savings. It’s my way out. I’d rather carry $300 in debt month to month than spend my future on the shitty requirements of the present.
    I already have YNAB, but beyond getting moved and a better job, what do I do, denizens of APW?

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  • RT

    $400? Sure, if it’s an absolutely necessary emergency. If it’s something I can skip, I’d skip it. $2000? Nope.

    My dad lost his job in the recession.
    I grew up in a fancy neighborhood, went to one of the top public schools in the country, went to the top college in my field in the world. I know that I got my job (or at least the interview) because of my school’s reputation. It’s one of very few in my field in the area where I live. I don’t get paid a ton, the commute will always be rough no matter where I move, and the culture can be a little backwards sometimes. But I don’t see myself ever leaving, because it’s a steady desk job in my field, and after seeing my dad lose his job? I’m terrified to be jobless, or to go to another job but find that it’s not a good fit.

    The trouble with being brought up comfortably-but-not-extravagantly-so is that I was never taught how to budget, but I’m sure that I should… It’s just never been part of my life. And I have certain standards that I’m used to that I don’t view as luxuries but as… vital. Like living in what I consider to be a safe neighborhood. To me it’s hard to put a price on what feels like the safety of my life. About half my monthly income goes toward rent.

    I don’t have any debt, at least, and for that I am thankful.

  • Amy March

    My problem with this article is that there is a huge difference between thinking in the abstract on a survey that you can’t come up with $400, and actually whether or not you really could. I think it’s an obviously inflated number that diminishes the whole article’s credibility. You could look at actual data instead: how many people can’t make bail? Can’t pay a $400 tax debt? Have cars or furniture worth under $1000 repossessed because of non-payment?

  • Elizabeth

    Perhaps most relevant to APW: “We have no retirement savings, because we emptied a small 401(k) to pay for our younger daughter’s wedding.”
    AHHH! This part of the article gave me heart palpitations.
    I cannot even imagine how I would feel if my parents did this! Unfortunately he doesn’t seem to have much insight into how doing something like that would affect his kids views of money.

    • AP

      This killed me too! I thought a lot about his daughters while reading that article…if I knew that my high school, college, and wedding had put my parents into such a bad financial place, I’d be so upset! Or that they’d jeopardized their retirement for me? I wonder if the daughters were aware of the family’s finances the whole time, or if they thought their family was fine until the article came out.

      • Sofia

        I know one of the daughters and I’m pretty sure she didn’t know until recently. She shared the article on Facebook.

        My parents did a similar thing – spending way above their means, a lot of it on great educations for three kids, but not insignificant amounts on vacations and and an enormous house. I didn’t know, but had enough of a spidey sense that something was not quite right to become anxious and obsessed about personal finance by college.

        It all came out in their very ugly divorce. And now? I have a huge emergency savings account and a lot saved for retirement, but I still don’t feel secure enough to afford kids and their education (as in actually pay for, not the approach my parents took). Pretty soon my parents are going to need money for their retirement/healthcare and they won’t have it because they put themselves in massive debt through very bad financial decision making… And spent a lot of it on me. So I’m going to need to pay for this. And not have kids?

        • AP

          That is rough. I’m in a similar boat. My parents are also divorced, and one is comfortable now but not much retirement planned, while the other is paycheck-to-paycheck and in debt. Even though their financial decisions had very little to do with me (my siblings, on the other hand…) my fear is having to help them both out down the road.

          There was an APW article a few weeks ago about finances, and a few commenters were debating sending kids to college vs. saving for retirement, and someone made a great point that they justify prioritizing their retirement over kids college funds because not saving for retirement just means our kids will have to pick up that weight when we’re older. Which helped reframe the kids question for me, or at least eased the fear (somewhat) that I can’t potentially afford kids.

    • CO

      That and the part where he apparently told his wife they were fine and he didn’t need her help to support them definitely inspired the most ranting from me.

    • Eh

      My inlaws taught their sons horrible financial management skills. For example, they borrowed money to give both their sons money for their weddings. This was pretty typical behaviour for my inlaws. At the beginning of the year they decide how much they want to borrow for travel and renovations on their house. Then they pay it off the rest of the year. Most years they do not pay it off before the end of the year, and they carry over the debt. My husband has a pretty lax attitude towards debt. He always pays money to his credit card every month but he didn’t always pay it off (usually because he didn’t have the money). I always pay mine off, so when he did this when we were dating I was surprised. I told him that I would cover the extra money because it was silly to pay interest when we had the money to cover the whole bill. Because my inlaws did not teach their sons good financial management, they are noisy and concerned about their sons/DILs spending. They are constantly telling us that we are wasting our money or we don’t need something. They disagreed with us buying a house and having central air installed. They were vocal that replacing windows is very expensive or that we didn’t need to replace the lights in our kitchen (after we had an electrician tell us that our lights were a electrical fire waiting to happen we thought it was important to get them fixed). The thing they don’t get is that I have good financial management skills because my parents taught me (they did not always follow what they taught but they did teach us to live in our means and to save). I had 20% saved for a downplayment, we only get renovations down after we have saved up the money to pay for them (and frequently get discounts for paying in cash). We bought a house that didn’t make us house, and we still have money for savings and retirement savings. It has taken years that but my inlaws are finally seeing that my husband and I are responsible financially.

  • ART

    Having an emergency fund has been the best financial decision, measured in terms of sleeping well at night, that I’ve ever made. That’s not to suggest that it’s easy in terms of actually saving the money, keeping it in place and not dipping into it for things that aren’t actual emergencies, or forgoing interest earnings because it’s in some shitty savings account and not either paying down your debt or messing about in an investment somewhere. But the psychological rewards have been greater than I imagined and now I preach it as an if-at-all-possible tool in your life skills belt.

  • Lexie

    I do have $400 for emergencies. I have always tried to keep a $1000 emergency fund because I always seem to have out of the blue emergencies every few years! I had my wisdom teeth removed my senior year of college and had to pay $900 out of pocket to cover it, the clutch and flywheel went out in my car a few years ago and that was over $1100. I am too prideful to ask my parents for money, so I just try and keep it in there! The more stressful part of money management to me is feeling like I will never be able to save for a down payment on a house and still travel, socialize, etc. like I want to. I haven’t really made up my mind which is a bigger financial priority, and I feel like I should.

  • JC

    Thanks, Stephanie and APW team, for continuing to do posts like this. Every time you do, I go in and check all of my bases, confirming that things are the way they are supposed to be and contemplating what I can do to put myself and my future family (just the two of us? a whiffleball team of children? our long-dreamed-of-future-dog?) in the best financial situation possible. It is something that makes me REALLY uncomfortable, but it has to be done.

  • $400? Annoying, but doable. And something I had to deal with a couple months ago when my puppy had to go to the emergency vet, and then my cat needed two rounds of blood tests. That hurt, and there were a lot of grilled cheese and tomato soup nights that month.

    And amazingly, we were able to cover the $3300 sewer repair bill last year too, although I cried and drank a lot of (cheap) wine to deal with that one, by raiding some savings for another thing and emptying our emergency fund. But had we been hit with the high end quote — $15,000 — for our sewer line? I don’t know that we would have recovered. We’ve lived like college students forever, but the thought of growing our family and squeezing out child care payments scares the SHIT out of me.

  • KEB320

    To the author and others annoyed at being labeled a “consumer” and not a “citizen” there’s an actual legal difference between the two terms. The Federal Reserve Board intentionally uses the term “consumer” to explain they’re including everyone who lives in the US, and, no, that’s not the same thing as a US Citizen. There are huge numbers of people who live and work in the US who aren’t necessarily citizens but ARE consumers.

  • I don’t know how people live without being able to afford a $400 emergency. When my husband was making minimum wage and we lived in one of the top 10 highest cost of living areas in the country, we moved out of our one-bedroom apartment and into a studio with our dog to make ends meet and continue to save money. Saving money is the FIRST thing that happens when we get paid. We live off the rest. IF we can’t save money, then we can’t afford our lifestyle. That’s how we get by and didn’t have to stress as much when my husband couldn’t work for five weeks due to an injury.

  • Revanche @ A Gai Shan Life

    It always irks me when these almost alarmist articles are written by someone who was pretty highly privileged. They don’t know what they’re talking about when it comes to legitimate financial insecurity, they made bad decisions that honestly only people who had some money and some other-generational support can make.

    People who don’t have those resources wouldn’t even imagine sending their kids to an expensive private school, it’s hard enough to manage school beyond high school. But I suppose that’s not considered middle class.

    I came from a working class background. As a teen, I realized that there was no emergency per se but little things and bad decisions that all added up to being unable to make the rent when my grandma and mom had acute illnesses and couldn’t work for a short while. It was hugely eye opening and stressful. I didn’t have it in my head at the time but during that first year before I turned 18, when I was making minimum wage at a crap job that I got to pay for college textbooks, I quickly learned that I DID NOT want to live my life surrounded by a new tv, overdue bills, one meal a day, and utilities in danger of being cut off. Looking around my family home, at that very situation, was a huge lesson in bad money decisions.

    I was lucky – I started looking for resources online and got in deep with the Fatwallet Forums during the earlier days of couponing, then read dozens of PF blogs, then starting PF blogging myself. Ten years later, with many sacrifices and many many long hours of work and research and careful money management, we are finally in what I’d call a “good” money position. We have dealt with unexpected and/or large expenses in the thousands of dollars without breaking stride. Mom’s funeral? Paid for in cash. Our wedding? Paid for in cash. Enormous tax bill this year because of something out of our control? Paid. (Sucks, but paid.)

    This only happened because I learned so much while blogging about the ups and downs of money and practiced money management with Scarlett O’Hara echoing in the back of mind: I never ever wanted to be hungry again.

    The great thing about digging my way out is that people who read blogs like mine, given some wage earning opportunity and access to good PF blogs, can do much the same. Our journeys will never look exactly alike but we can share enough to help each other out.

  • NTB

    To anyone reading this and thinking of moving to Denver — think twice! We have a high cost of living and salaries that do not measure up. Also, there is no beach here!

    That said, I think that in the age of student loans, combined with the lopsided housing market in many major metro areas (housing costs are high where the jobs happen to be, but your salary may not be enough to close the gap) and the residual effects of the recession that are still apparent in many places, it’s no wonder some folks are underwater or struggling to make a living, and with no savings to boot. Will be interesting to see how the student loan debt bubble continues to play out.

    Also, as someone who had massive help from her parents (I owe 100% of my financial success to them) I feel fortunate and very blessed to have as much savings as I do right now. Parents taught me to save half of what I made – every birthday, every Christmas, and every gift was half for fun and half for my savings account.

    The thing I have learned, especially about being married and managing finances, is that money is actually a really big deal — and it’s not about how much one makes, it’s about how much one saves. This is a huge point of contention in my current marriage (in the process of a legal separation/imminent divorce) and so I speak from experience that effectively managing money and having strategic, intentional, and purposeful conversations about money and the management thereof is extremely important.

    • NTB

      “thereof” or “thereunto?” any English majors in the house? ;-)

      • Haladi Heather

        English major to the rescue!!! Oh, I am so excited. Like being called in as an understudy!

        “Thereof” is the better choice. Gold star to you! The definition of the adverb thereof is “Of the thing just mentioned, of that” The important word being “of” as in, “money and the management of money.” Thereof is a shortcut for “of money”

        “Thereunto” is definied as “to that” and is a shortcut for “to the thing I just said?” So you might say, “Of signal importance are budgets, with proper attention paid thereunto.” You wouldn’t say “proper attention paid of budgets” but “proper attention paid TO budgets.” See how that works? :)

        Does anyone want to talk about the Oxford comma?