Americans Becoming More Financially 'Fragile'

Thursday, May 26, 2011

money, 100 dollar bills (yomanimus/flickr)

The age-old, personal finance rule-of-thumb is that every American household should have about three months salary tucked away in savings in the case of a really rainy day. In the the best of times, Americans are pretty poor savers; so, how feasible is a three-month financial cushion in these troubled economic times? A new study published by the National Bureau of Economic Research decided to find out. Researchers asked Americans whether or not they would be able to raise $2,000 in cash within thirty days. The results of the poll may surprise you.

We speak with Takeaway contributor and personal finance guru Beth Kobliner to get a look behind the numbers. Beth Kobliner is the author of “Get a Financial Life” and an appointee to the president’s Advisory Council on Financial Capability.


Beth Kobliner

Produced by:

Hsi-Chang Lin

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Jun. 16 2011 11:47 AM

Now that I've finally paid off all the debt my wife racked up over the last several years, I've actually already stashed away $4k in savings and that continues to rise. If I had to, I could probably raise $10k in 30 days, though that would be really tough short of taking a loan against my 401k. I expect to work my way up to having 3 months salary saved up but even at a couple thousand a month, that's going to take a couple years. However, we could easily live on one salary now (before the debts were paid off, that would have been tough.)

May. 26 2011 03:51 PM
Kathleen M. Gillespie from Lake Orion, Michigan

Many of those leaving a comment on today's topic seem to have a judgemental opinion of those who could not raise $2000 in 30 days. I shared my current situation on today's program with Mr. Hockenberry. I can raise the money -- maybe twice becasue I can cash oout a stock certificate from my former employer (the firm is employee owned). I believe that MORE than 50% of American's could not raise the $2000 in 30 days. And it's not because of SUV's or overspending. My hunch is that we are NOT hearing more of these stories because those of us experiencing this for the first time do not want to be publicly shamed. We are caregivers, full-time students, and highly educated middle-aged professionals fighting to keep our families together in the face of unpredictable ripples through this tsunamic economy.

May. 26 2011 12:09 PM
Shenvalley from VA

Oh, I forgot to mention. I don't have any more credit card debt and we have 6 months of expenses in savings. Which we only touch in emergencies.

I agree with Rick Evans. I see lots of people over-extending themselves.

May. 26 2011 10:43 AM
Shenvalley from Virginia

First, I'd try selling off some toys (compound bow, guitar, rifle/scope, camera or a lens, or a fly rod) any of those would get at least $700 or more on ebay.

Or, I'd pull from savings.

I do not consider loans from family or banks solutions. I do not like being in debt.

I sometimes pull in freelance design income. But it is unreliable since I do not seek it out. For that reason, we do not include that in our forecasts or budgets. I consider it fun money (hence the toys).

I'm not rich, but have learned a little self discipline and have a little experience.

I used to live paycheck to paycheck. I had no savings, 25k in credit card debt, a school loan and a car loan. Within 6 years I paid off credit cards and car, bought a brand new house, paid for a wedding and honeymoon.

We make less than 100k combined. We try to save at least half the price before we buy something.

May. 26 2011 10:30 AM
Rick Evans from Taxachusetts

Wanna bet those who can't raise the $2000 lease a new SUV every three years, would never consider the 'inconvenience' of car pooling, blithely pay their cable bill, dutifully frequent Dunkin' or Starbucks for their morning essential and stare clueless if you mention you brown bag it.

Before he bleeding hearts chastise my insensitivity to poor people:

1. Real poor people know how to live frugally
2. Beth alluded to the 10% of $100 to $150K earners who can't come up with the $2000.

May. 26 2011 10:26 AM
Tanya from Northville, MI

We have about 4 months' living expenses in the bank, so in an emergency, we'd be ok. If we blew threw that and still needed money though, we could sell my engagement ring, one or both of our cars, or, as a last resort, borrow it from my husband's parents.

May. 26 2011 10:01 AM
Jane from Pittsburgh

When I was a child and money was tight my Mother used to threaten to sell us to the first band of gypsies that came down the street.....Do you think this could still be a viable option???!!!

May. 26 2011 08:55 AM

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