Rant Ahead – HumbleDollar

Rant Ahead

Richard Quinn  |  May 8, 2022, 2:18 am ET

WARNING: WHAT YOU read next may be interpreted as a rant—because it is. I’m tired of hearing about how Americans are unprepared for retirement or even minor financial emergencies. A few years back, it was the inability of 40% to 50% of us to come up with $400 for an emergency. The $400 figure has been used to prove everything from the extent of inequality to how Americans struggle to manage money.

Other studies set the hurdle at $1,000. These studies are even more suspect. One recent survey claims 56% of us couldn’t come up with $1,000 in an emergency—but another, conducted in 2021, says 39%.

Remember, we aren’t talking here solely about Americans living in or close to poverty. Instead, these studies include many who are middle class and above. But at the same time, clearly many families are somehow managing to save.

During the pandemic, the bottom 70% of Americans by income collectively saved about $1.1 trillion. The total saved by the entire population is estimated at $3.7 trillion.

I recently viewed a 2016 YouTube video on “financial fragility” from PBS NewsHour. It included an interview with writer Neal Gabler, who published an article in The Atlantic. Gabler said he was among the 47% of Americans who didn’t have $400 to his name. The interviewer asked how much of this was caused by his own decisions.

He listed a few personal circumstances, like being a writer, living in an expensive area, having two children and sending them to college. Then came the big “forces beyond our control” moment.

Gabler noted that real household income has risen modestly since the 1970s, while costs have grown dramatically, especially college. Yup, there are financial things beyond our control, but the ability to accumulate a modest emergency fund is not one of them.

Let me go shopping with a middle-class family and I’ll find savings equal to $400 in a month or two. Do you really need that new pair of shoes? Can you do your own nails for a couple of months? Why not make coffee before leaving for work, instead of paying $5 for a Venti whatever? I say skip eating out until you’ve accumulated an emergency fund. And forget buying those lawn blowups for every holiday. Am I being silly? I think not.

It all adds up. My daughter works part-time in a daycare center. One family, with two children enrolled, is $2,000 in arrears on daycare fees. Yet the family spent spring break at Disney World. An emergency fund? Financial priorities? You’ve got to wonder.

My contention: Building and maintaining an emergency fund should be part of a family’s budget, not an afterthought. The vast majority of Americans have no excuse for not having a modest emergency fund. Ditto for saving regularly for retirement. I say, where there’s a will, there’s a way.

What that means, simply, is that your standard of living should be based on your income after taxes—and after money is set aside for savings. Isn’t that the only responsible way to live?

Source: Rant Ahead – HumbleDollar

I am a regular contributor to the HumbleDollar blog and articles on all matters money related. Check it out‼️


  1. Interesting thoughts on both sides of the aisle. It is true that a lot of people don’t have $400 or $1000 on hand. What that proves is that a lot of people live in the edge or they misinterpreted the question. If I were asked do I have the 400, I would say no because I don’t carry cash like that. I do have a credit card I would use in an emergency. Could I pay the credit card bill in full at the next billing cycle? Yes I could and routinely do but that wasn’t the question. I do like the cash back awards on the card. I remember being asked at work once if I had change for a twenty and I looked and my wallet was empty and the fellow asking was astonished and said he would never leave home without money in his wallet. I just smiled and shrugged.
    By the way, for some years on my last job, I ran the coffee machine in our break room. I got free coffee but no pay otherwise of course. It was only 10 cents and the supplies and vending machine were provided by a coffee service. I drank coffee all day and never made it at home.


    1. If you believe the several surveys, many people can’t come up with $400 for an emergency, it’s not cash in your wallet. I wouldn’t say living on the edge, I’d say living foolishly. Remember, we are not talking about poor people. These people have a spending problem more than an income problem.


  2. “The flaw of averages”. Yeah, 47 percent is kind of meaningless. Or irrelevant?

    1. “The life-cycle hypothesis (LCH) is an economic theory that describes the spending and saving habits of people over the course of a lifetime. The theory states that individuals seek to smooth consumption throughout their lifetime by borrowing when their income is low and saving when their income is high.”

    So having an emergency fund may depend on where you are in the life cycle.

    2. “…i would go so far as to say Americans above the lowest 20th percentile have more a spending and money management problem than an income problem.”
    (Richard Quinn)

    Life-cycle hypothesis may not even apply to most of those in the lowest 20th percentile. Dad was there his whole life. Several siblings are still. No emergency fund. No savings. Retirement on Social Security alone.

    He had emergencies. We all did. Most of us find that $400 or$1,000… somewhere.

    Which brings us to…

    3. Credit*. What does it say if you have $400 in an emergency fund or $40,000 in a retirement fund… And… $50,000 in debt? I’ve been there. That life cycle thing.

    I believe the relevance of the $400 emergency is related to income equality. If you are at or above the mean, or even the median individual or household income, $400 more or less is not a crisis.

    If you are in the lowest percentiles, it is not communism or even socialism if the rest of us (ostensibly more responsible? people) are taxed to augment your subsistence. To meet your emergencies. Even spring for an occasional latte.

    *Go ahead and splurge on that new car. Dad also said that credit is what makes this country great (among other things). How many good jobs would be lost if everyone waited till they had cash to pay for a car. Or even a latte. Baristas need jobs too. Your “spending and money management problem” is someone else’s income program.


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