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

It's all fine, right? Ahahahhaha

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? 

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