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This misleading headline gets repeated over and over again because it gets clicks, but the survey actually asked a different question: Specifically, how would y

This misleading headline gets repeated over and over again because it gets clicks, but the survey actually asked a different question: Specifically, how would you pay for an emergency expense? They also allowed multiple answers in past years, which further clouded the results. The actual survey questions and results can be found here: https://www.bankrate.com/banking/savings/financial-security-january-2021/ https://www.bankrate.com/banking/savings/financial-security-... > We asked: How would you pay a surprise expense? > Facing a $1,000 expense for an emergency room visit or car repair, you would: > Pay the costs from your savings > Charge to credit card and pay over time > Pay it but cut spending on other expenses > Borrow from family or friends > Take a personal loan The number of people who chose "borrow from family or friends" or "take a personal loan" added up to 20%, so it's not clear how they got to a number suggesting that 61% of Americans simply couldn't pay for it at all. These studies get endlessly repeated in discussions about financial security in the United States, but they're always seriously misleading. Does anyone really believe that a majority of Americans would crumble when faced with a $1K expense?

boring_twenties 5y ago
My answer would be to charge to credit card and pay with my next paycheck. I suspect I'm not the only one. Now, how do we answer this question? I guess I would have to pick the credit card answer, even though I'm not paying it off "over time." And I guess that would count me as one of the people who couldn't afford it?
- aworlph 5y ago
  Either "Pay the costs from your savings" or "Pay it but cut spending on other expenses", because you would have either saved or spent that part of next month's paycheck if your credit card balance wasn't $1000 higher than usual. If you don't carry a balance, the credit card is merely time-shifting the reduced spending/saving.
  - boring_twenties 5y ago
    The "cut spending" option seems reasonable to me, but I guess it would also count me as unable to afford it?
- YXNjaGVyZWdlbgo 5y ago
  The reasonable answer for you would be to select I would be pay it from savings. If you don't take everything so literal it's usually easier to navigate these questionnaires especially without context the participants had.
  - pelagicAustral 5y ago
    I would’ve gone for savings, definitely. I think it’s the most cost effective way to get things sorted, second best would be to ask friends/family since I’m guessing it would be an interest -free loan.
    - boring_twenties 5y ago
      Are you sure you're not just saying that because you retrospectively know how your answer is going to be interpreted? Honestly it wouldn't occur to me to answer savings unless I am actually withdrawing from my savings account.
      - pelagicAustral 5y ago
        Really? No, I don't know... To me the order is clear: > Pay it but cut spending on other expenses > Pay the costs from your savings > Borrow from family or friends > Charge to credit card and pay over time > Take a personal loan If that particular month I got that kind of scratch then I would definitely allocate it to cover the expense, second best and most likely, savings... Family and friend if I must, luckily I do have a few names on the 'hey, can I borrow a few G's' list... Credit card and loan are definitely bottom of the list... I finished paying a 7 grand credit debt a few years ago and decided to call it quits with it. Since then I've been trying to save and now (mid-thirties) I can finally feel at ease with some savings... I'm terrible with money btw.
  - boring_twenties 5y ago
    I agree that's probably the least-worst answer, but I strongly suspect most people in this situation would pick the one that includes the words "credit card."
tluyben2 5y ago
> Does anyone really believe that a majority of Americans would crumble when faced with a $1K expense? Many people here in the EU believe so; this gets repeated a lot when the US comes up. Americans, when visiting here, often ask if it is true you can have your granny put down in the Netherlands when you want to (no) and people ask Americans if they really die in the streets because they cannot even get 1000$ (forgetting that people on holiday here definitely spent more than 1000$ on leisure). We did a house swap with a young couple from Florida and they, when someone asked, indeed said they would be able to get 1000$ in an emergency, but 5k would be impossible, loan or otherwise. I would be able to come with 20 or so people who would give me 5k if I was in a bind, and I don't know many rich peeps: I am almost 50 and all my friends have had jobs for about 30 years in a western country which means 5k is not that much, especially for an emergency. I live in a village with 'poor farmers' but when someone has issues (usually divorce or death) the community manages to raise over 20k$ every time i have seen it with ease.

boring_twenties 5y ago

My answer would be to charge to credit card and pay with my next paycheck. I suspect I'm not the only one. Now, how do we answer this question? I guess I would have to pick the credit card answer, even though I'm not paying it off "over time." And I guess that would count me as one of the people who couldn't afford it?

aworlph 5y ago
Either "Pay the costs from your savings" or "Pay it but cut spending on other expenses", because you would have either saved or spent that part of next month's paycheck if your credit card balance wasn't $1000 higher than usual. If you don't carry a balance, the credit card is merely time-shifting the reduced spending/saving.
- boring_twenties 5y ago
  The "cut spending" option seems reasonable to me, but I guess it would also count me as unable to afford it?
YXNjaGVyZWdlbgo 5y ago
The reasonable answer for you would be to select I would be pay it from savings. If you don't take everything so literal it's usually easier to navigate these questionnaires especially without context the participants had.
- pelagicAustral 5y ago
  I would’ve gone for savings, definitely. I think it’s the most cost effective way to get things sorted, second best would be to ask friends/family since I’m guessing it would be an interest -free loan.
  - boring_twenties 5y ago
    Are you sure you're not just saying that because you retrospectively know how your answer is going to be interpreted? Honestly it wouldn't occur to me to answer savings unless I am actually withdrawing from my savings account.
    - pelagicAustral 5y ago
      Really? No, I don't know... To me the order is clear: > Pay it but cut spending on other expenses > Pay the costs from your savings > Borrow from family or friends > Charge to credit card and pay over time > Take a personal loan If that particular month I got that kind of scratch then I would definitely allocate it to cover the expense, second best and most likely, savings... Family and friend if I must, luckily I do have a few names on the 'hey, can I borrow a few G's' list... Credit card and loan are definitely bottom of the list... I finished paying a 7 grand credit debt a few years ago and decided to call it quits with it. Since then I've been trying to save and now (mid-thirties) I can finally feel at ease with some savings... I'm terrible with money btw.
- boring_twenties 5y ago
  I agree that's probably the least-worst answer, but I strongly suspect most people in this situation would pick the one that includes the words "credit card."

tluyben2 5y ago

> Does anyone really believe that a majority of Americans would crumble when faced with a $1K expense? Many people here in the EU believe so; this gets repeated a lot when the US comes up. Americans, when visiting here, often ask if it is true you can have your granny put down in the Netherlands when you want to (no) and people ask Americans if they really die in the streets because they cannot even get 1000$ (forgetting that people on holiday here definitely spent more than 1000$ on leisure). We did a house swap with a young couple from Florida and they, when someone asked, indeed said they would be able to get 1000$ in an emergency, but 5k would be impossible, loan or otherwise. I would be able to come with 20 or so people who would give me 5k if I was in a bind, and I don't know many rich peeps: I am almost 50 and all my friends have had jobs for about 30 years in a western country which means 5k is not that much, especially for an emergency. I live in a village with 'poor farmers' but when someone has issues (usually divorce or death) the community manages to raise over 20k$ every time i have seen it with ease.