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Most of your specific points are false. In fact, the majority of Americans self-report that they have at least 3 months of emergency savings, and this is backed

Most of your specific points are false. In fact, the majority of Americans self-report that they have at least 3 months of emergency savings, and this is backed by savings account data. Credit is necessary for some people, but the actual number is closer to 20% than 50%.

lenerdenator 2y ago
Got a source? This article says 58% of Americans say they live paycheck-to-paycheck: https://www.cnbc.com/2024/04/09/most-of-americans-are-living-paycheck-to-paycheck-heres-why.html https://www.cnbc.com/2024/04/09/most-of-americans-are-living... This article mentions 78%: https://www.forbes.com/advisor/banking/living-paycheck-to-paycheck-statistics-2024/ https://www.forbes.com/advisor/banking/living-paycheck-to-pa...
- mgraczyk 2y ago
  The definitions of "paycheck-to-paycheck" are different in different surveys. For example, in the second one you linked the question asked was something like "How difficult would it be for you if your paycheck was delayed by one week?" and they took anybody who said more than "not difficult" as "living paycheck to paycheck". My definition is more strict.
  - lenerdenator 2y ago
    I don't know what your definition is, because you didn't provide the requested source. Here's another one showing more than 50%: https://www.prnewswire.com/news-releases/69-of-americans-in-urban-areas-are-living-paycheck-to-paycheck-14-percentage-points-higher-than-suburban-consumers-301832741.html https://www.prnewswire.com/news-releases/69-of-americans-in-...
  - Izkata 2y ago
    There's another one I remember reading at some point (it was definitely older than these, but I don't remember where it was from) where the question was something along the lines of "do you use a credit card for monthly payments" with the assumption of a "yes" meaning they couldn't pay it otherwise and were paycheck-to-paycheck by necessity. It completely ignored the people who use credit cards for the protections or convenience.
  - Sohcahtoa82 2y ago
    The Forbes article linked above shows that 80% of Americans have $2,000 or less in savings. That's 80% of everyone, not just people living paycheck to paycheck. That directly contradicts your claim that the majority has 3 months of emergency savings unless you're so out of touch to think that $2,000 is enough to last people 3 months.
    - mgraczyk 2y ago
      These are self reported numbers, and contradict the numbers from the federal reserve, individual banks, and credit card companies. My main problem with the claim is this. If credit were required by the majority of people, how can it be the case that fewer than 50% of people maintain a balance on any card?
- verteu 2y ago
  Just FYI, I recommend the Fed's "Report on the Economic Well-Being of U.S. Households" for metrics like this. Some stats: https://www.federalreserve.gov/publications/2024-economic-well-being-of-us-households-in-2023-banking-credit.htm#:~:text=past%2012%20months.-,Credit%20Cards,-People%20use%20credit https://www.federalreserve.gov/publications/2024-economic-we... > Eighty-two percent of adults had a credit card in 2023. They were nearly evenly split between the people who paid off their balances in each of the previous 12 months and people who carried balances from month to month at least once in the prior year. Just about one-quarter said they carried a balance most of the time during the prior 12 months. > Fourteen percent of people used BNPL ["buy now, pay later", an alternative to credit cards] in the prior 12 months, up 2 percentage points from 2022. https://www.federalreserve.gov/publications/2024-economic-well-being-of-us-households-in-2023-overall-financial-well-being.htm https://www.federalreserve.gov/publications/2024-economic-we... > Near the end of 2023, 72 percent of adults were at least doing okay financially, meaning they reported either "doing okay" financially (39 percent) or "living comfortably" (33 percent). The rest reported either "just getting by" (19 percent) or "finding it difficult to get by" (9 percent)... The 72 percent of adults doing at least okay financially was essentially unchanged from 2022 yet was down 6 percentage points from the recent high of 78 percent in 2021 (figure 1). https://www.federalreserve.gov/publications/2024-economic-well-being-of-us-households-in-2023-expenses.htm https://www.federalreserve.gov/publications/2024-economic-we... > Table 17. Largest emergency expense individuals could handle right now using only savings > under $100 (18%) > $100–$499 (14%) > $500–$999 (10%) > $1,000–$1,999 (10%) > over $2,000 (48%) (Which I find this hard to reconcile with the following from the same page:) > In 2023, 54 percent of adults said they had set aside money for three months of expenses in an emergency savings or "rainy day" fund—unchanged from 2022 but down from a high of 59 percent of adults in 2021.

lenerdenator 2y ago

Got a source? This article says 58% of Americans say they live paycheck-to-paycheck: https://www.cnbc.com/2024/04/09/most-of-americans-are-living-paycheck-to-paycheck-heres-why.html https://www.cnbc.com/2024/04/09/most-of-americans-are-living... This article mentions 78%: https://www.forbes.com/advisor/banking/living-paycheck-to-paycheck-statistics-2024/ https://www.forbes.com/advisor/banking/living-paycheck-to-pa...

mgraczyk 2y ago
The definitions of "paycheck-to-paycheck" are different in different surveys. For example, in the second one you linked the question asked was something like "How difficult would it be for you if your paycheck was delayed by one week?" and they took anybody who said more than "not difficult" as "living paycheck to paycheck". My definition is more strict.
- lenerdenator 2y ago
  I don't know what your definition is, because you didn't provide the requested source. Here's another one showing more than 50%: https://www.prnewswire.com/news-releases/69-of-americans-in-urban-areas-are-living-paycheck-to-paycheck-14-percentage-points-higher-than-suburban-consumers-301832741.html https://www.prnewswire.com/news-releases/69-of-americans-in-...
- Izkata 2y ago
  There's another one I remember reading at some point (it was definitely older than these, but I don't remember where it was from) where the question was something along the lines of "do you use a credit card for monthly payments" with the assumption of a "yes" meaning they couldn't pay it otherwise and were paycheck-to-paycheck by necessity. It completely ignored the people who use credit cards for the protections or convenience.
- Sohcahtoa82 2y ago
  The Forbes article linked above shows that 80% of Americans have $2,000 or less in savings. That's 80% of everyone, not just people living paycheck to paycheck. That directly contradicts your claim that the majority has 3 months of emergency savings unless you're so out of touch to think that $2,000 is enough to last people 3 months.
  - mgraczyk 2y ago
    These are self reported numbers, and contradict the numbers from the federal reserve, individual banks, and credit card companies. My main problem with the claim is this. If credit were required by the majority of people, how can it be the case that fewer than 50% of people maintain a balance on any card?
verteu 2y ago
Just FYI, I recommend the Fed's "Report on the Economic Well-Being of U.S. Households" for metrics like this. Some stats: https://www.federalreserve.gov/publications/2024-economic-well-being-of-us-households-in-2023-banking-credit.htm#:~:text=past%2012%20months.-,Credit%20Cards,-People%20use%20credit https://www.federalreserve.gov/publications/2024-economic-we... > Eighty-two percent of adults had a credit card in 2023. They were nearly evenly split between the people who paid off their balances in each of the previous 12 months and people who carried balances from month to month at least once in the prior year. Just about one-quarter said they carried a balance most of the time during the prior 12 months. > Fourteen percent of people used BNPL ["buy now, pay later", an alternative to credit cards] in the prior 12 months, up 2 percentage points from 2022. https://www.federalreserve.gov/publications/2024-economic-well-being-of-us-households-in-2023-overall-financial-well-being.htm https://www.federalreserve.gov/publications/2024-economic-we... > Near the end of 2023, 72 percent of adults were at least doing okay financially, meaning they reported either "doing okay" financially (39 percent) or "living comfortably" (33 percent). The rest reported either "just getting by" (19 percent) or "finding it difficult to get by" (9 percent)... The 72 percent of adults doing at least okay financially was essentially unchanged from 2022 yet was down 6 percentage points from the recent high of 78 percent in 2021 (figure 1). https://www.federalreserve.gov/publications/2024-economic-well-being-of-us-households-in-2023-expenses.htm https://www.federalreserve.gov/publications/2024-economic-we... > Table 17. Largest emergency expense individuals could handle right now using only savings > under $100 (18%) > $100–$499 (14%) > $500–$999 (10%) > $1,000–$1,999 (10%) > over $2,000 (48%) (Which I find this hard to reconcile with the following from the same page:) > In 2023, 54 percent of adults said they had set aside money for three months of expenses in an emergency savings or "rainy day" fund—unchanged from 2022 but down from a high of 59 percent of adults in 2021.