4 ms·

As a Brit, I don't really understand the mindset that everyone is a mistake away from being penniless, to be honest. It feels mostly like a healthcare thing sp

by throwaway22032 3y ago

As a Brit, I don't really understand the mindset that everyone is a mistake away from being penniless, to be honest. It feels mostly like a healthcare thing specific to the US. And it ignores the fact that most severe healthcare outcomes will ruin you in more ways than just the financial. Aside from healthcare, there are no real expenses I can think of that would suddenly "ruin my life". The two real examples I can think of are: - an uninsured house fire/collapse, mitigated by... insurance - severe mental illness / breakdown that results in spending my life savings Otherwise, it's like, ok, beyond age 21 I have at least a few months savings.

NoZebra120vClip 3y ago
There are thousands of homeless people out here who didn't understand that mindset either. Yet many became homeless because of one glitch, or perhaps a series of mistakes, that cascaded into a catastrophic failure. Once in 1997, I was living in a homeless shelter, and a TV reporter came to interview us. One of the residents went on camera to say "Every one of us who is living paycheck to paycheck just doesn't realize that we're one mistake away from losing it all." And that's the truth, because there are so many Americans who indeed live "paycheck to paycheck" without any building or planning for the future beyond next month. I've been homeless and I sure didn't anticipate it, but it was inevitable, the way I was mismanaging my finances, my relationships, my employment, and my housing. Last year I would've been ruined by medical debt if my father didn't swoop in to pay it all off. I was trying to do things the hard way; I went to the hospital about 5 times in 12 months, and they all hit me with enormous bills. I couldn't get coverage, I couldn't negotiate them, I was hardly aware of their existence at some points until they were sent to collections. Medical debt will well and truly ruin some of us around here, even if we're insured, because it's designed to be ruinous. Now into this mix you add some mental illness or executive dysfunction and we have a real crazy time dealing with paperwork and bills, much less holding down a job. One of the horrific things about hospitalization is that you're cut off from the outside world and you can't take care of your affairs. I would worry about paying my rent and bills. If those were late, there could be ruinous fees or the eviction process could begin. I could become homeless just for being hospitalized too long. Some of us have nobody "on the outside" to assist in these matters. The hospital won't give you a computer or cell phone or WiFi access. Most people would greatly benefit from both disability insurance and long-term care insurance. The latter is very expensive, but if you need long-term care then those costs are going to devour every penny you've saved anyway. So it's a good idea to front-load that and perhaps you'll pay less in the long run. Private disability insurance is great and can pay out cash when you need it the most. It really helps to be insured for these eventualities. I wish I could afford all of that.
- MrJohz 3y ago
  But that's what a welfare state is for, isn't it? To act as a kind of collective insurance, paid into by everyone, that mitigates these sorts of disasters. You've just lost your job? Here is some money for the time being to tide you over, and support for finding a new job. You've just had a health emergency? Here's sick pay from work, and the potential for support if this is a long term issue that prevents you from working (and the healthcare is already covered). Your house was destroyed in a freak accident? Here's temporary accommodation, and a bunch of organisations who will try and stop it happening next time. Fwiw, this is all pretty idealised, and in practice a lot of these institutions can break down, or don't provide as much support as they should, or whatever else. I agree that insurance is really valuable in a lot of these cases, and you should get it if you can. But I think there's generally a problem if these sorts of benefits are only available to those whose parents are rich enough to provide that safety net.
throwaway2037 3y ago
everyone is a mistake away from being penniless Ignore it; it is wildly overstated around here.
itairall 3y ago
The problem is 50% of the people in the US are spendthrifts and absolutely terrible with saving money. It doesn't matter what their income is. A spendthrift can always find something to spend all their money on no matter how high their income is. The American spendthrifts are also the types to have huge levels of debt to service. If you always spend everything you have and everything you are credit worthy of you are not going to be able to handle an unexpected financial shock. Even if healthcare was free in the US, there would be some other shock that would be a problem almost by definition of being a spendthrift. These discussions are always so pointless because the relationship people have to money is so hugely varied. It is also why it was a huge disservice to spendthrifts in the US to pause student loan payments for this long. Not only is that student loan payment gone for 50% of the people but it is probably actually servicing additional debt after this long.

NoZebra120vClip 3y ago

There are thousands of homeless people out here who didn't understand that mindset either. Yet many became homeless because of one glitch, or perhaps a series of mistakes, that cascaded into a catastrophic failure. Once in 1997, I was living in a homeless shelter, and a TV reporter came to interview us. One of the residents went on camera to say "Every one of us who is living paycheck to paycheck just doesn't realize that we're one mistake away from losing it all." And that's the truth, because there are so many Americans who indeed live "paycheck to paycheck" without any building or planning for the future beyond next month. I've been homeless and I sure didn't anticipate it, but it was inevitable, the way I was mismanaging my finances, my relationships, my employment, and my housing. Last year I would've been ruined by medical debt if my father didn't swoop in to pay it all off. I was trying to do things the hard way; I went to the hospital about 5 times in 12 months, and they all hit me with enormous bills. I couldn't get coverage, I couldn't negotiate them, I was hardly aware of their existence at some points until they were sent to collections. Medical debt will well and truly ruin some of us around here, even if we're insured, because it's designed to be ruinous. Now into this mix you add some mental illness or executive dysfunction and we have a real crazy time dealing with paperwork and bills, much less holding down a job. One of the horrific things about hospitalization is that you're cut off from the outside world and you can't take care of your affairs. I would worry about paying my rent and bills. If those were late, there could be ruinous fees or the eviction process could begin. I could become homeless just for being hospitalized too long. Some of us have nobody "on the outside" to assist in these matters. The hospital won't give you a computer or cell phone or WiFi access. Most people would greatly benefit from both disability insurance and long-term care insurance. The latter is very expensive, but if you need long-term care then those costs are going to devour every penny you've saved anyway. So it's a good idea to front-load that and perhaps you'll pay less in the long run. Private disability insurance is great and can pay out cash when you need it the most. It really helps to be insured for these eventualities. I wish I could afford all of that.

MrJohz 3y ago
But that's what a welfare state is for, isn't it? To act as a kind of collective insurance, paid into by everyone, that mitigates these sorts of disasters. You've just lost your job? Here is some money for the time being to tide you over, and support for finding a new job. You've just had a health emergency? Here's sick pay from work, and the potential for support if this is a long term issue that prevents you from working (and the healthcare is already covered). Your house was destroyed in a freak accident? Here's temporary accommodation, and a bunch of organisations who will try and stop it happening next time. Fwiw, this is all pretty idealised, and in practice a lot of these institutions can break down, or don't provide as much support as they should, or whatever else. I agree that insurance is really valuable in a lot of these cases, and you should get it if you can. But I think there's generally a problem if these sorts of benefits are only available to those whose parents are rich enough to provide that safety net.

throwaway2037 3y ago

everyone is a mistake away from being penniless Ignore it; it is wildly overstated around here.

itairall 3y ago

The problem is 50% of the people in the US are spendthrifts and absolutely terrible with saving money. It doesn't matter what their income is. A spendthrift can always find something to spend all their money on no matter how high their income is. The American spendthrifts are also the types to have huge levels of debt to service. If you always spend everything you have and everything you are credit worthy of you are not going to be able to handle an unexpected financial shock. Even if healthcare was free in the US, there would be some other shock that would be a problem almost by definition of being a spendthrift. These discussions are always so pointless because the relationship people have to money is so hugely varied. It is also why it was a huge disservice to spendthrifts in the US to pause student loan payments for this long. Not only is that student loan payment gone for 50% of the people but it is probably actually servicing additional debt after this long.