Saving Ourselves – HumbleDollar

What say ye?

Why can’t people save? No money to save or too much spending on the wrong things?

THINK OF IT as the ultimate financial Rorschach inkblot test.

When you hear about the pitifully inadequate retirement savings of so many Americans, what’s your immediate reaction? a) This is the inevitable result of stagnant wages coupled with soaring medical, education and other costs; or b) This is what happens in a financially illiterate society with scant self-discipline and constant temptations to spend.

For me, these differing views were brought into sharp relief by two recent articles on HumbleDollar.

In May, a frequent contributor to the site, Richard Quinn, wrote about 16 ways that Americans waste money. It easily ranks as the most popular article in the site’s 31-month history.

Source: Saving Ourselves – HumbleDollar


  1. Almost every problem we have today is complex and multifactorial. Easy problems get solved. Stagnating wages leads to hopelessness about a future in the American dream. How does one get from even $50k in a 401 account to the $ 1.7 million that recent articles say is a “magic number”. True also, many Americans, thanks to a lack a life skills learning at home and in schools, are indeed financially illiterate. When Chase Bank announced it was exiting the credit business in Canada and forgiving all outstanding balances, I was struck by the number of working people I know who wished aloud that could happen for them, so consumer debt is a big part of our current crisis. Expensive home prices and car loans with seven year payoffs round out the list. Oops, forgot healthcare and education.


    1. A couple of things. There is no magic number that anyone can tell a person needs to retire. If you live on a gross of $50,000 today and you want to live on that in retirement consider that you will get say $18,000 from SS, more if married. So you need to generate about $32,000 a year which means you need about $800,000 in retirement savings. You are 100% correct about financial education. I don’t buy the stagnant wages scenario as a cause of people not getting anywhere. If people didn’t have money to spend prices would not be going up. Prices are not raised if people don’t buy. Quite the opposite.


      1. RD – You fail to consider the US consumer is buying not because of wage increases, but because of easy credit at high interest rates and low minimum payments. I now have income of $36,000 per year in retirement and available credit = $54,000, and that is just credit cards, CRAZY! I currently have $6,000 in CC debt all at zero interest and it will be zero in Sept of 2020, only because that is when the interest clock will start. My current income = the buying power of my 1989 USAF wages. of $17,000. I didn’t even have any Credit Card accounts until I reached the age of 35 in 1991. Up until then my income was enough to support a family of 6, since then I have seen my standard of living either stay about the same or go down every year. Wages are not keeping up with the cost of living for the lower middle class or many in the middle class. We have had productivity growth and profit growth over the last 30 years and too many workers have not seen any increase in their standard of living, except by taking on more and more credit card debt. Many like myself and other family members who were making between $25,000 to $65,000 per year upon retirement, continued to see price inflation eating away at their standard of living, no matter what the COLA is to their benefits.


      2. Most debt is derived from spending on extras

        Basic necessities and healthcare costs may be sending some people into debt, but more people point to spending on non-essential items like clothing and entertainment as the main culprit. In CNBC Make It’s survey, 32% of people said their discretionary spending was the No. 1 cause of their current credit card debt.
        Another 9% say the majority of their debt comes from paying for travel. Americans spend an average of $483 a month on non-essentials such as dining out, entertainment, luxury items and vacations, Schwab’s 2019 Modern Wealth report found.


      3. “I don’t buy the stagnant wages scenario as a cause of people not getting anywhere. If people didn’t have money to spend prices would not be going up. Prices are not raised if people don’t buy. Quite the opposite.”

        Prices are going up because people are buying anything they need or want on credit. And credit is being used because of wage stagnation, even if you do not believe it is true. Of course people should be educated on financial subjects, but the reality is governments, lenders and advertisers want people to be unaware of the true cost of everything in life, it makes for happy citizens, for a little while, anyway


  2. The biggest problem I see in people’s finances is DEBT! DEBT, driven by easy money, credit cards with high interest rates. Or even worse PAYDAY lenders charging 400 to 600 percent interest on 30 day loans. Where are the regulators, state and federal, if they really cared about poor people?
    Why is it banks pay less than 1% on savings account deposits, but then charge 15 to 36 percent or higher on credit card interest. Average credit card rates are trending up. I remember 5.25% passbook savings accounts 40 years ago, when I had no credit card debt at all and was able to pay cash for everything I needed, working a job making $4.85 per hour in 1979.
    A few years ago I received a credit card offer with a 59% interest rate, of course I did not bite. So, many people buy into the low monthly payment plans and never even calculate the total interest charged for that new $1,000 cell phone.


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