Living “on the cheap” is not a fad, but rather the maximum that most Americans can afford. Now, studies show devastating data: more than 50% of Americans could not face an unexpected expense without compromising their economic stability. The study was conducted by GoBankingRates, and it showed that more than half of Americans have less than $500 in savings, a figure that reflects the economic reality that is experienced in American households…
And in a country that is known as the land of opportunity and is always promising stability, this reality goes beyond numbers, because these figures represent millions of people who face sleepless nights, worried about how they will cover next month’s expenses or what they will do in the event of a medical emergency or an unexpected layoff.
It is called “financial precariousness” and it affects all areas of our lives, from how to feed ourselves to how to educate our children. In a context where life continues to rise in price, the American dream seems to be out of reach for a large part of the population.
Economic pressure on households
The report highlights that, although inflation has begun to stabilize (finally), interest rates continue to hit consumers’ pockets continuously by remaining very high, so that practically the entire population is living “pay check to pay check” (that is, they do not have the ability to save because their salary does not cover it), which means that they cannot save for an emergency fund.
The survey estimates that 39% of Americans have less than $250 saved, and that the other 21% have between $1 and $250 in savings… A real madness that would not be enough to cover any basic expense.
On the other hand, 40% of Americans keep a minimum balance of $500 or less in their accounts, but this does not clarify anything either, since with that money they would not be able to face any unforeseen event.
Different generations
One of the most striking aspects of the study is the generational differences. On the one hand, the “baby boomers” (over 65 years old) have higher balances, reporting at least $2000 a month, but the generation X (those who are now between 45 and 54 years old) are the ones who are suffering the most, keeping their bank accounts at a minimum.
We are not going to talk about the generations under 45 years old who are suffering from precarious jobs with which they can barely make a living…
The report also talks about the extreme stress that more than 29% of those surveyed are suffering due to the state of their savings, and this not only affects the financial health but also the mental health of many people, since we will have realized by now that the economy, unfortunately, is everything.
How can I save?
You’ve already seen that it’s very difficult to save when salaries are low and the prices of basic products keep rising… But we’re going to give you some tips to help you
- Identify all the expenses you have at home each month, the types of insurance, medical and education expenses… And subtract them directly from your salary, so you’ll know how much money you have available for the rest of the purchases.
- Make a meal plan at the beginning of each month, so that when you go shopping you stick exclusively to what you have written down and thus you’ll manage to save unnecessary expenses.
- Identify what you spend the most money on. Nowadays it’s known as “small expenses”, and they’re small expenses that accumulate until at the end of the month it reflects as a large bill.
- Avoid compulsive shopping!!
- Make the most of discounts and promotions.
This analysis should serve as a “snapshot” to our leaders to implement more effective economic measures, whether to promote financial education or to offer alternatives to rising prices, something that makes the future look like a sustainable place and not a nightmare.