why don't people have savings?

[mama2one]

heard tonight that 1 in 4 will be unable to pay their next rent/mortgage pymt which means that at least 1 in 4 have no emergency savings


edited-
many live paycheck to payck & unable to save
often due to housibg costs or fixed costs where they live & not purchases

 

[ewq1938]

heard tonight that 1 in 4 will be unable to pay their next rent/mortgage pymt which means that at least 1 in 4 have no emergency savings

yet many have cells, big TVs, cable/streaming services, etc

why don't people hold off buying until they have savings?

Some just spend money as fast or faster then they even get it. I have family members like that but I am frugal and save and usually don't spend money unless it's necessary.

 

[createdtoworship]

heard tonight that 1 in 4 will be unable to pay their next rent/mortgage pymt which means that at least 1 in 4 have no emergency savings

yet many have cells, big TVs, cable/streaming services, etc

why don't people hold off buying until they have savings?

People can make more money but then they buy take on bigger mortgages, and buy nicer cars, and RVS and unnessentials. Toys. But I have been saying since November to save for the next recession. It just happened th that 2 to 3 months later it happened. The Lord gave me another vision of recession, I am not sure if it will be over or if it will be just starting, but may was when the vision said it will happen. I know of 2 out of like 30 people I told to save an emergency fund actually did it. But they say to save six months normal wages in cash. But I think half that is sufficient. Invest the rest. I had the vision of recession 6 months ago. It was a rain storm and there had been no rain for the year when I had the vision. And I was in the back yard and a lightening strike hit the tree and it fell but missed my house. The storm was a recession the lightening was the stock markeT falling, the tree was the economy tumbling. The house was those faithful believers who prepared and did not spend frivolously with credit.

 

[Olmhinlu]

I think it's partly because people (big and little) have been bailed out in the past, expect it and feel entitled to it, and don't fear hunger, destitution, sickness etc. enough to do something about it

Not enough fear; too much luxury

EDIT: in natural terms; the real ultimate answer is always that they need God.

 

[dzheremi]

heard tonight that 1 in 4 will be unable to pay their next rent/mortgage pymt which means that at least 1 in 4 have no emergency savings

yet many have cells, big TVs, cable/streaming services, etc

why don't people hold off buying until they have savings?

A lot of people get those electronic things like phones and cable services via deals which lock them into contracts. The price of electronics also drops over time in a way that rent or mortgage payments do not:

From the American Enterprise Institute, I think the graph at this story pretty much explains it: https://www.aei.org/carpe-diem/chart-of-the-day-century-price-changes-1997-to-2017/


As you can see, the price of housing has increased over the last ~20 years to be slightly higher than the median overall inflation of 55.6% (the line for housing is just slightly over the black line), while TV, toys, software, and cellphone services have declined over that same period from ~25 to ~100%.

This also means, of course, that the amount that they would save by not buying these things or signing the contracts for these things is nowhere near what they would need to save to pay their rent/mortgage on a month-to-month basis, since those luxury items are so cheap. Think about it: Netflix standard level service is $13/month, while the average mortgage payment is $1,029/month. So mortgage payments are approximately 80 times more expensive than having things like Netflix, 9 times more expensive than the average monthly cellphone bill, etc. Things like TVs and such are not really comparable, since they're usually a one time purchase only made maybe once a decade (the average lifespan of a flat screen LCD TV is claimed by manufacturers to be 100,000 hours -- about 11 years).

So these are not really fair comparisons with non-elastic, monthly, increasingly expensive things like rent or mortgage payments.

 

[mama2one]

when husband lost his job due to company downsizing, we immediately cut cable & Internet
paid bills first & only then did we grocery shop
we basically lived on baked potatoes for dinner for weeks as they were cheapest thing we could eat at that time

we never added back cable & use free antennae tv
we also didn't get back Internet for long time & instead used library

cutting out extras does save more than people think

 

[Olmhinlu]

when husband lost his job due to company downsizing, we immediately cut cable & Internet
paid bills first & only then did we grocery shop
we basically lived on baked potatoes for dinner for weeks as they were cheapest thing we could eat at that time

another family member also lost job & I suggested cutting cable/Internet, also
when they called to complain, I asked if they cut those
no, they did not

we never added back cable & use free antennae tv
we also didn't get back Internet for long time & instead used library

cutting out extras does save more than people think

I believe that God sees

 

[mama2one]

also, surprising how much can be saved by keeping heat lower in winter & turning off lights as leave room

 

[Olmhinlu]

I 100% know that to be true for heating - does lighting make that big of a difference?

 

[dzheremi]

when husband lost his job due to company downsizing, we immediately cut cable & Internet
paid bills first & only then did we grocery shop
we basically lived on baked potatoes for dinner for weeks as they were cheapest thing we could eat at that time

another family member also lost job & I suggested cutting cable/Internet, also
when they called to complain, I asked if they cut those
no, they did not

we never added back cable & use free antennae tv
we also didn't get back Internet for long time & instead used library

people aren't willing to make sacrifices
cutting out extras does save more than people think

Not everyone can make these kinds of sacrifices to begin with. I'm totally willing to grant that there are many people who can who choose not to, but the idea of just going to the library or just living off of potatoes or something is not realistic for people with preexisting conditions that prevent them from going wherever they please or eating whatever they can find for cheap.

I have a weekly food budget of under $50 and stick to that (no going out to eat, etc.), have not had cable TV in approximately 10 years, and am locked into the cheapest internet available in my locality (no added services, no super speeds, etc). Still, even given this very frugal living, I would have trouble paying my bills if my income were to decrease even a little bit, since my rent is a very high percentage of said income. I don't want to get into specifics, because that's personal information I'm not comfortable sharing, but it's enough to where I am in a constant search for cheaper housing, which so far I have not found (and I've lived where I am for two years, after moving here from an even more expensive location that had the annoying habit of catching on fire...), and which everyone has told me I am unlikely to find after I tell them what I'm currently paying.

The thing is, I don't say any of this to elicit a pity party but to highlight how I am considered lucky to be paying the 'low' amount I am paying (and I do consider myself lucky, since again I used to live in an area that was even more obscenely expensive), despite the fact that it eats up almost 100% of my income every month. By the time bills are factored in (and I really only have maybe 4-5 monthly bills, none of which are extraordinarily high on their own), there's basically no money to save. I really, really doubt that I am the only one who is in this sort of situation, and I don't see how anyone could reasonably say that I am not living within my means (as demonstrated by the fact that I have never been late on rent or payment of bills; I have it down pretty well to where I know my limits with all of this stuff, which, yes, many people struggle with...it's not something I always knew, either; I had to learn it the hard way when I was younger, in my 20s).

Edit: Since it was pointed out while I was writing the above reply, I've also not even bothered to have my heating turned on (call that a benefit of living in an area where that's generally not needed). Blankets are better than even the smallest heating bill.

 

[mama2one]

@Olmhinlu

our electric budget used to be $92/ mos and got down to $50/mos by being stricter

using more night lights
teaching husband/child to turn off lights & constantly asking "who left lights on?" or I go around to turn off

also, letting in natural light longer to keep lights off

 

[mama2one]

.

 

[mama2one]

.

 

[JIMINZ]

I 100% know that to be true for heating - does lighting make that big of a difference?

You would be surprised just how much an Instant on feature on you TV cost.
It's all electricity being used.

Initial cash outlay for led bulbs is high but they will last for a very, very long time and pay for themselves in the long run.

65 on the thermostat is chilly but a sweater will keep you warm enough and more money in your pocket.

 

[mama2one]

I didn't know this but learned some things plugged in still draw electric so I go around & unplug things not being used

 

[createdtoworship]

A lot of people get those electronic things like phones and cable services via deals which lock them into contracts. The price of electronics also drops over time in a way that rent or mortgage payments do not:

From the American Enterprise Institute, I think the graph at this story pretty much explains it: https://www.aei.org/carpe-diem/chart-of-the-day-century-price-changes-1997-to-2017/


As you can see, the price of housing has increased over the last ~20 years to be slightly higher than the median overall inflation of 55.6% (the line for housing is just slightly over the black line), while TV, toys, software, and cellphone services have declined over that same period from ~25 to ~100%.

This also means, of course, that the amount that they would save by not buying these things or signing the contracts for these things is nowhere near what they would need to save to pay their rent/mortgage on a month-to-month basis, since those luxury items are so cheap. Think about it: Netflix standard level service is $13/month, while the average mortgage payment is $1,029/month. So mortgage payments are approximately 80 times more expensive than having things like Netflix, 9 times more expensive than the average monthly cellphone bill, etc. Things like TVs and such are not really comparable, since they're usually a one time purchase only made maybe once a decade (the average lifespan of a flat screen LCD TV is claimed by manufacturers to be 100,000 hours -- about 11 years).

So these are not really fair comparisons with non-elastic, monthly, increasingly expensive things like rent or mortgage payments.

college and medical being among the highest inflated costs over the last twenty years. Mortgage at least stayed below wages which is good.

 

[Amittai]

I read about a phone costing thousands and/or expensive lease and even the batteries are on expensive lease.

Rising GDP "per head" is distorted by the incomes of the elite: for most it has been stagnating and going down, for nearly 20 years. The 2004 (or 2006, depending whose lies you believe) slump is ever deepening.

 

[mama2one]

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[mama2one]

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[eleos1954]

heard tonight that 1 in 4 will be unable to pay their next rent/mortgage pymt which means that at least 1 in 4 have no emergency savings

yet many have cells, big TVs, cable/streaming services, etc

why don't people hold off buying until they have savings?

They lack in self-discipline in regard to financial matters. The priority to have material things now is more important to them rather than to have something in place to address difficult financial times that may arise.

When I was younger ... just like most ... there were things I wanted ... however ... what I did was worked two jobs to acquire some of those things ... and also built up a savings account during the process. Have always had $$$$ in savings with mostly in mind .... to make sure I had transportation (vehicle & repairs) with vehicle being paid for in full ... no payments. Now a days .... that can also be met using Uber etc..... but still one need to make sure the funds are there.

It's a matter of how one set's their priorities and not making "instant gratification" a priority.

Stay out of debt as much as possible ;o)