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Rant Ahead

Richard Quinn, 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?

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David J. Kupstas
David J. Kupstas
13 days ago

With respect to the Disney World family, I can completely relate. I was treasurer for a school organization. One parent was always months late on fees. Then I go on Facebook and see her posting pictures from a vacation to another country. I just didn’t get it. Maybe someone else paid for their trip. I don’t know, but I doubt it. There just seems to be a pervasive mentality that everyone is entitled to nice vacations, meals out, etc., when cutting those things out could help folks pay day care fees, school fees, emergency expenses, etc.

Ben Rodriguez
Ben Rodriguez
13 days ago

The paucity of emergency fund and retirement savings is a national scandal. It appears that many of our fellow citizens simply have an ethos to spend everything they make.

David Golden
David Golden
15 days ago

Unlike Mr. Quinn, I’m an old lefty. Yet, I agree with more of his premises than disagree. One can simultaneously worry about income inequality, the lack of a national healthcare paradigm has on personal bankruptcies and an absurd taxation system yet still be dismayed by how many Americans frivolously spend money. Systemic challenges needing public policy adjustments ought not to provide cover for poor money management. It starts with understanding the difference between wants and needs.

R Quinn
R Quinn
15 days ago
Reply to  David Golden

Amen to that. And I agree the health care system is a mess. I also agree the tax system needs major revision although perhaps not exactly in the way you may be thinking.

Arnold Hold
Arnold Hold
16 days ago

Well said, with the spenders always ready with indefensible excuses as to why they cannot save a few bucks. This article probably is not reaching people who need to hear this, too bad.

parkslope
parkslope
16 days ago

When you have a problem that affects half of our population I think more is needed than simply saying that “the vast majority of Americans have no excuse” for not saving or having an emergency fund. Clearly, more is needed than simply blaming so many others for lacking willpower.

Jerry M
Jerry M
15 days ago
Reply to  parkslope

Not that Mr. Quinn needs me to defend him! I spent 20+ years listening to his Wisdom at my employer.! I had a decent job. I worked long hours but always saved something! My wife stayed home with our children and never brought a paycheck home after our first child was born. I took vacations but never paid for anything with a credit card that I couldn’t pay off at the end of the month. I drove used cars! Yes there are always things that come up! So you cut back on something the next month. Ask yourself do you run the dish or clothes washer when not full? Turn the lights off when you leave the room. Turn down the heat or AC when you leave home? If you answered yes to any of these then your not thinking through what Dick is saying! But guess what your not alone! Like you said half the population chooses to live this way!

R Quinn
R Quinn
15 days ago
Reply to  parkslope

I disagree. Not sure its a problem except for those who can’t save $400. Second, how reliable do you think those surveys are regarding people telling the truth about why they can’t save?

Just look around at how average -majority- Americans spend their money. Consider what is spent on lotteries. That alone averages more than $400. Look at what is spent on vehicles beyond that necessary to get from A to B – the largest selling vehicle, pickup trucks for example.

I 100% stand by my statement. The vast majority of Americans have no excuse for not having a modest emergency fund. In fact, 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.

CJ
CJ
10 days ago
Reply to  R Quinn

Too many of these folks DO have an emergency fund – handouts from other family members and their parents’ retirement savings.

I’m considered the stingy cheapskate in my clan because I am the only one who refuses to loan (i.e, give) away my money to younger members who drive much nicer cars than me with huge loan payments, have the latest 1k phone, constantly travel, and whose kids have mountains of toys they trip over daily….yet have their palm out and a sob story about needing money every time they need a home repair, household expense, etc.

Everyone else continues to enable them. Sad.

Last edited 10 days ago by CJ
parkslope
parkslope
15 days ago
Reply to  R Quinn

My comment was made to point out that your frequent “rants” do nothing to solve things. You are the only writer on HD whose articles frequently consist of complaints about the financial failings of others as opposed to offering constructive financial management advice.

R Quinn
R Quinn
15 days ago
Reply to  parkslope

I think you need to go back and re-read a few of my posts. In fact, are there not suggestions in this piece.

Last edited 15 days ago by R Quinn
Jack Hannam
Jack Hannam
16 days ago

A wise writer once wrote “Between savers and investors, I’d bet on the savers every time”. Many people with a wide range of incomes would benefit by reading your final paragraph and looking at themselves in the mirror.

Ellen Crouch
Ellen Crouch
16 days ago

Yes it is all about decisions Even when unexpected circumstances arise, decisions can make or break you. Mr. Gabler can move to a lower cost neighborhood, choose less expensive college options, etc. I am shocked the interviewer would ask him if it was his decisions that landed him with no emergency cash. Bravo for him/her! I too completely agree with you Mr. Quinn!

mjflack
mjflack
16 days ago

Hey you kids get off my lawn!

Note: I agree with everything you just said.

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