Half of Americans are "financially fragile"

[LaylaMonroe]

According to this article, 50% of Americans couldn't come up with $2000 by the end of the month for an unplanned expense.

Nearly half of Americans are living in a state of "financial fragility," a new paper by the National Bureau of Economic Research reveals. To determine this statistic, researchers from the George Washington School of Business, Princeton University, and Harvard Business School asked survey participants whether they would be able to come up with $2,000 for an "unexpected expense in the next month." 22.2 percent predicted they would be "probably unable" and 27.9 percent said they'd certainly be unable to foot the unplanned bill.

[phbrown]

$2,000 is quite a bit where I live where the median income is only $36,000.

In fact that means the median monthly income is only $3,000.

$2,000/$3,000*100 = 67%

I don't know how many people can move their finances around to justify an expense that is 67% of your monthly income.


Now I could see it if it was 20% or less of your monthly income.

$2000/20%= $10,000 a month

or $120,000 a year. ...


But anyone under $120k a year would have trouble handling that bill. Especially if they were to get more than 1 of those in a year.

[under13]

Yeah, I'm in that boat. But I wont be by this time next year. 

$2,000 is quite a bit where I live where the median income is only $36,000.

In fact that means the median monthly income is only $3,000.

$2,000/$3,000*100 = 67%

I don't know how many people can move their finances around to justify an expense that is 67% of your monthly income.


Now I could see it if it was 20% or less of your monthly income.

$2000/20%= $10,000 a month

or $120,000 a year. ...


But anyone under $120k a year would have trouble handling that bill. Especially if they were to get more than 1 of those in a year.

If you live below your means then you will have no problem whatsoever with that amount. Its gonna be hard for most people making below average salary, but its not impossible. I make a bit more than that, but I spend way too much on my new car and  insurance for it. If I had a gotten a used car for $4000 and saved the payments that I've been paying for the past 3 year in a saving account + the other money I waste on junk, I'd be pretty wealthy for a 23 year old. Its all about priorities, and most of us would rather have nice things that make us look like we have have money, than actually have money.

And anybody making 6 figures has no excuse for not being able to come up with that amount of money. If they were smart they would live as if they only made 70 or 80k.

Everyone should have 6 months of living expenses in a savings account. Start with $1000 though, and build it up. That way you wont have to use a credit card for these emergencies or borrow from someone.

[LaylaMonroe]

Yeah, I'm in that boat. But I wont be by this time next year. 


If you live below your means then you will have no problem whatsoever with that amount. Its gonna be hard for most people making below average salary, but its not impossible. I make a bit more than that, but I spend way too much on my new car and  insurance for it. If I had a gotten a used car for $4000 and saved the payments that I've been paying for the past 3 year in a saving account + the other money I waste on junk, I'd be pretty wealthy for a 23 year old. Its all about priorities, and most of us would rather have nice things that make us look like we have have money, than actually have money.

And anybody making 6 figures has no excuse for not being able to come up with that amount of money. If they were smart they would live as if they only made 70 or 80k.

Everyone should have 6 months of living expenses in a savings account. Start with $1000 though, and build it up. That way you wont have to use a credit card for these emergencies or borrow from someone.

I say that all the time! It's so true. I would much rather have money and not look like it than be broke and wear expensive clothes and drive an expensive car and live in an expensive house. My grandmother is definitely my role model in that area. No one would ever know by looking at her what kind of money she has. And she's still as frugal as she was when she was on welfare 60+ years ago.

And yeah, PHB, if a person is earning 6 figures, there's really no reason for them not to be able to scrape up 2k - unless they are living beyond their means, like most Americans. Or maybe they're a 1-income household with a wife and 9 kids and a widowed mother-in-law... or something like that. Otherwise, why couldn't one come up with $2k??

This is why people end up homeless, physically ill from stress, divorced, foreclosed, etc... because they don't prepare for emergencies and live above their means.

[under13]

I think we should do Dave Ramsey's Total money makeover one month for the book club.

[Tiptip357]

All I gotta say is that Mint.com is the bomb.......dot com. It really has kept me on track with my goals (Actually, I'm ahead of schedule on all of them). I've been staying within my monthly budget and although my phone is registered, the notifications are very few.  I'm sent a text with my balance at the end of the week and a notification if I'm close to going over my budget.

[LaylaMonroe]

I think we should do Dave Ramsey's Total money makeover one month for the book club.

Ohhhhhhhhhhhhhh I lovvvvve that idea!!! I would totally vote for that one.

All I gotta say is that Mint.com is the bomb.......dot com. It really has kept me on track with my goals (Actually, I'm ahead of schedule on all of them). I've been staying within my monthly budget and although my phone is registered, the notifications are very few.  I'm sent a text with my balance at the end of the week and a notification if I'm close to going over my budget.

Totally agree.

[LaylaMonroe]

Wait, let me add to that...

I do totally agree that Mint.com is a life-changer. But, I will add this from my personal experience. Nothing will work until you make up your mind. The change starts in your mind. We have to change the American mindset (especially Black Americans and especially working class and lower-middle class Americans) from having to have everything we want right now, whether we can afford it or not, spending money with no plan (budget), living above our means, keeping up with the Joneses, and again, having to have everything we want RIGHT NOW.

You fix that mindset, and you start an account at Mint.com, and you're well on your way to financial health. Guaranteed.

[Tiptip357]

I think we should do Dave Ramsey's Total money makeover one month for the book club.

Sounds great to me!  I have that book. There are a couple of things I agree with and few things I don't agree with, so it'll be a good discussion. 

Wait, let me add to that...

I do totally agree that Mint.com is a life-changer. But, I will add this from my personal experience. Nothing will work until you make up your mind. The change starts in your mind. We have to change the American mindset (especially Black Americans and especially working class and lower-middle class Americans) from having to have everything we want right now, whether we can afford it or not, spending money with no plan (budget), living above our means, keeping up with the Joneses, and again, having to have everything we want RIGHT NOW.

You fix that mindset, and you start an account at Mint.com, and you're well on your way to financial health. Guaranteed.

Well, of course!  That applies to everything in our life that we desire to change. It starts in the mind first.  I believe that most people (I say most because I haven't done the research to say "All") wouldn't sign up for Mint.com if they didn't first acknowledge that they needed help in that area.

[LaylaMonroe]

Sounds great to me!  I have that book. There are a couple of things I agree with and few things I don't agree with, so it'll be a good discussion. 

Well, of course!  That applies to everything in our life that we desire to change. It starts in the mind first.  I believe that most people (I say most because I haven't done the research to say "All") wouldn't sign up for Mint.com if they didn't first acknowledge that they needed help in that area.

Totally agree.

I thought I had that book myself, but when I got home to look, I realized I had Suze Orman's version of it. I could've sworn I read Dave's though... I'm thinking I may have given it away. I really don't know. But anyway, I think it'll make a great book club choice. I'll put it in the suggestions thread.

And speaking of you already having a book.... *hint, hint* 

[blyempowered]

I don't wanna do money makeover. It may convict me....LOL!

[Tiptip357]

Totally agree.

I thought I had that book myself, but when I got home to look, I realized I had Suze Orman's version of it. I could've sworn I read Dave's though... I'm thinking I may have given it away. I really don't know. But anyway, I think it'll make a great book club choice. I'll put it in the suggestions thread.

And speaking of you already having a book.... *hint, hint*  

Yall are gonna have to forgive a sista.  I was working on a final project for school and haven't had the chance to read the book, but don't worry. I love to read.  Even books that were "difficult" to read, I seem to manage to get through it all. I'll get caught up, and jump right on in!  It'll be like I've been there the whole time! 

[LaylaMonroe]

Yall are gonna have to forgive a sista.  I was working on a final project for school and haven't had the chance to read the book, but don't worry. I love to read.  Even books that were "difficult" to read, I seem to manage to get through it all. I'll get caught up, and jump right on in!  It'll be like I've been there the whole time! 

Well we're discussing Chapter 2 this coming Thursday, so feel free to jump on in whenever you can! We'll be waiting.  (And for the record, this one is a very easy read). Mostly everyone is reading ahead of the schedule we decided on. I think I'm the furthest behind. LOL

[Fenix]

After seeing my uncle go through bankruptcy this year, i can believe it!

Apart from my house, if i can't buy it with cash, for get it! I hate credit and i hate owing money.

[Tiptip357]

Well we're discussing Chapter 2 this coming Thursday, so feel free to jump on in whenever you can! We'll be waiting.  (And for the record, this one is a very easy read). Mostly everyone is reading ahead of the schedule we decided on. I think I'm the furthest behind. LOL

Alright! Works for me!

[LaylaMonroe]

After seeing my uncle go through bankruptcy this year, i can believe it!

Apart from my house, if i can't buy it with cash, for get it! I hate credit and i hate owing money.

Same here. My house and my education (although if I knew then what I know now.... lol).

[Tiptip357]

Same here. My house and my education (although if I knew then what I know now.... lol).

Right now it's my house and my car.  My car is almost paid off (one of my goals for this year) My student loan was paid off two months ago.  I'm still in school, but my job is reimbursing me 100%! Praise God!

[Tiptip357]

Oh, and I have never owned a credit card.  Don't want one.

[LaylaMonroe]

Oh, and I have never owned a credit card.  Don't want one.

Your generation can really survive comfortably without credit cards. In my day, we didn't have debit cards, so you really had to have a credit card in order to do just about anything.

I'm so glad we can now use debit cards for everything.

Right now it's my house and my car.  My car is almost paid off (one of my goals for this year) My student loan was paid off two months ago.  I'm still in school, but my job is reimbursing me 100%! Praise God!

Ummm... is y'all hirin? LOL. 

Nah seriously, if my company did 100% tuition reimbursement, I'd probably go back to school. But here, the degree has to be in a related field (which I understand), and they pay back a percentage. I don't know how much it is, but I know it's not 100%. Plus, you have to stay on with the company for 2 years after you receive the last benefit payment. That's the part I can't go with.