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The median bank account balance is $8000: https://www.bankrate.com/banking/savings/savings-account-average-balance/ https://www.bankrate.com/banking/savings/sa

The median bank account balance is $8000: https://www.bankrate.com/banking/savings/savings-account-average-balance/ https://www.bankrate.com/banking/savings/savings-account-ave... I'm not sure where you got that stat, but would like to know if it's reconcilable with bank account balances.

c22 2y ago
The stat is from Bankrate's annual survey [0]. Every year all the outlets breathlessly report on how many Americans can't afford a $1000 expense, but this is a disingenuous reading of the data. The actual question asked is: "Which of the following best describes how you would deal with a major unexpected expense, such as $1,000 for an emergency room visit or car repair?" And the number reported (which is usually above 50%) is derived from everyone who didn't respond: "Pay the cost from your savings" [0]: https://www.bankrate.com/banking/savings/emergency-savings-report/#sudden-bill https://www.bankrate.com/banking/savings/emergency-savings-r...
- relaxing 2y ago
  How is it disingenuous? The only other option for affording that ER visit is the 16% who say they could cut $1000 in discretionary spending to cover it. Taking out an unsecured loan isn’t it.
  - c22 2y ago
    Well, 5% said "Something else," so the most charitable reading already puts us at 65% being able to afford it. But the way the question is worded leaves a lot of fuzzy room around the edges. For instance, a financially illiterate person may elect to put it on credit despite having enough liquid wealth not to need to (to get the airline points perhaps?) A shrewd investor may be able to cover it with a personal loan or by borrowing from family with a favorable rate that is lower than the expected return on their investments. The question asks which best describes what you would do in an emergency and only invokes $1000 as an arbitrary example. Some respondents may simply be confused or pedantic in their response. Additional bias can be injected when this number is re-reported by third parties, I've seen it reported as "X% of Americans..." "...Don't have $1000" "...Can't afford $1000 expense" "...Don't have $1000 in savings" "...Couldn't come up with $1000 in an emergency" And several other hyperbolic variations.
- 3eb7988a1663 2y ago
  I am not sure the reading is entirely unfair. If you cannot pay for the emergency in cash, the alternatives on the table are not great. The breakdown of answers: 44% Pay the cost from your savings 21% Finance with a credit card and pay it off over time 16% Reduce your spending onother things 10% Borrow from family or friends 4% Take out a personal loan 5% Something else
relaxing 2y ago
Poor people don’t have savings accounts. Rich people will have multiple savings accounts.
- gruez 2y ago
  Based on the questionnaire for the SCF on the fed's website, it looks like the figure is per person, not per account. Therefore the "rich people have multiple accounts that skew the results" effect won't exist.
  - relaxing 2y ago
    I don’t know what you’re looking at. On the questionnaire I see the first question is how many accounts, then what institution and how much in each.
    - gruez 2y ago
      >and how much in each. that question only exists for certain types of accounts. On page 13, compare >Have any checking accounts? (up to 6) > ... >Amount in account with >Have any IRA/Keogh accounts? >For each person ask: >Amount in each type Note the lack of "each" in the former. Moreover, on the main page[1] it's explicitly stated that figures are per-family, not per account. >For each variable and classification group, the charts show the percent of families in the group who have the item and the median and mean amounts of holdings for those who have any. It's further stated that 98.6% of families have "transaction accounts", so the effect of excluding people without transaction accounts is minimal. [1] https://www.federalreserve.gov/econres/scf-documentation.htm#SCF-interactive-chart https://www.federalreserve.gov/econres/scf-documentation.htm...
      - relaxing 2y ago
        You’re parsing the phrasing beyond any rational meaning or common sense. The person administering the survey would not ask about multiple accounts then record the value of only one. (Which one?) The documentation you’re looking at refers to one specific data visualization. Transaction accounts are not savings accounts. Give it a rest.
silverquiet 2y ago
How many people have no bank account? How many people have multiple bank accounts? Do the people with multiple bank accounts have a higher net worth than those with one or none?
- SpaceNoodled 2y ago
  Yeah, I have several bank accounts, all over $8k. It's a terrible metric.
- epistasis 2y ago
  The unbanked rate is 4.5%. So unless the 45th percentile of bank account balances is $1000, or maybe $3000, I don't know how to reconcile these stats. https://www.fdic.gov/household-survey https://www.fdic.gov/household-survey
  - relaxing 2y ago
    Not everyone with a checking account also has savings.
    - epistasis 2y ago
      The median includes checking accounts.

c22 2y ago

The stat is from Bankrate's annual survey [0]. Every year all the outlets breathlessly report on how many Americans can't afford a $1000 expense, but this is a disingenuous reading of the data. The actual question asked is: "Which of the following best describes how you would deal with a major unexpected expense, such as $1,000 for an emergency room visit or car repair?" And the number reported (which is usually above 50%) is derived from everyone who didn't respond: "Pay the cost from your savings" [0]: https://www.bankrate.com/banking/savings/emergency-savings-report/#sudden-bill https://www.bankrate.com/banking/savings/emergency-savings-r...

relaxing 2y ago
How is it disingenuous? The only other option for affording that ER visit is the 16% who say they could cut $1000 in discretionary spending to cover it. Taking out an unsecured loan isn’t it.
- c22 2y ago
  Well, 5% said "Something else," so the most charitable reading already puts us at 65% being able to afford it. But the way the question is worded leaves a lot of fuzzy room around the edges. For instance, a financially illiterate person may elect to put it on credit despite having enough liquid wealth not to need to (to get the airline points perhaps?) A shrewd investor may be able to cover it with a personal loan or by borrowing from family with a favorable rate that is lower than the expected return on their investments. The question asks which best describes what you would do in an emergency and only invokes $1000 as an arbitrary example. Some respondents may simply be confused or pedantic in their response. Additional bias can be injected when this number is re-reported by third parties, I've seen it reported as "X% of Americans..." "...Don't have $1000" "...Can't afford $1000 expense" "...Don't have $1000 in savings" "...Couldn't come up with $1000 in an emergency" And several other hyperbolic variations.
3eb7988a1663 2y ago
I am not sure the reading is entirely unfair. If you cannot pay for the emergency in cash, the alternatives on the table are not great. The breakdown of answers: 44% Pay the cost from your savings 21% Finance with a credit card and pay it off over time 16% Reduce your spending onother things 10% Borrow from family or friends 4% Take out a personal loan 5% Something else

relaxing 2y ago

Poor people don’t have savings accounts. Rich people will have multiple savings accounts.

gruez 2y ago
Based on the questionnaire for the SCF on the fed's website, it looks like the figure is per person, not per account. Therefore the "rich people have multiple accounts that skew the results" effect won't exist.
- relaxing 2y ago
  I don’t know what you’re looking at. On the questionnaire I see the first question is how many accounts, then what institution and how much in each.
  - gruez 2y ago
    >and how much in each. that question only exists for certain types of accounts. On page 13, compare >Have any checking accounts? (up to 6) > ... >Amount in account with >Have any IRA/Keogh accounts? >For each person ask: >Amount in each type Note the lack of "each" in the former. Moreover, on the main page[1] it's explicitly stated that figures are per-family, not per account. >For each variable and classification group, the charts show the percent of families in the group who have the item and the median and mean amounts of holdings for those who have any. It's further stated that 98.6% of families have "transaction accounts", so the effect of excluding people without transaction accounts is minimal. [1] https://www.federalreserve.gov/econres/scf-documentation.htm#SCF-interactive-chart https://www.federalreserve.gov/econres/scf-documentation.htm...
    - relaxing 2y ago
      You’re parsing the phrasing beyond any rational meaning or common sense. The person administering the survey would not ask about multiple accounts then record the value of only one. (Which one?) The documentation you’re looking at refers to one specific data visualization. Transaction accounts are not savings accounts. Give it a rest.

silverquiet 2y ago

How many people have no bank account? How many people have multiple bank accounts? Do the people with multiple bank accounts have a higher net worth than those with one or none?

SpaceNoodled 2y ago
Yeah, I have several bank accounts, all over $8k. It's a terrible metric.
epistasis 2y ago
The unbanked rate is 4.5%. So unless the 45th percentile of bank account balances is $1000, or maybe $3000, I don't know how to reconcile these stats. https://www.fdic.gov/household-survey https://www.fdic.gov/household-survey
- relaxing 2y ago
  Not everyone with a checking account also has savings.
  - epistasis 2y ago
    The median includes checking accounts.