Why do you think 76 percent of all Americans are living paycheck to paycheck? Its a scary statistic
I think one reason may be health insurance. Since obama required people to sign up many people are dumping large percentages of their salary towards insurance when previously that was the comfort net or savings money. Personally we put out almost the same amount for health insurance as we do for our house payment. Sure takes away the comfort extras that we had before.
Actually for decades financial advisors have said the average person does not save any significant money for retirement. The leading cause of bankruptcy among the middle age is healthcare issues. When we're young we spend $ and live for today!
Guess we are the opposite then. Hard to spend $ and live for today when you dump $800 a month on healthcare. That money use to go into our savings and 401k. Now tiny % to 401k is it.
Are you using the exchanges because your employer no longer offers health insurance or were you guys opting not to have heath insurance and hoping not to have any emergencies. From what I've seen most people have it through their work for less.
Before we just had a savings plan just for medical related things. We made sure there was enough to cover doc appts, plus the down payment for serious stuff, then payment plan if need be. Now we have insur. through job, but they don't help w/ costs.
Time to start saving for retirement NOW!
It's simple, because 76% of people live right at or above their means!
Once credit terms were introduced it allowed us all to buy now and pay later. Some folks are content making the minimum payments on things while they continue to accumulate other things.
You see people with low incomes who continue to have children, purchase pets, new cars as opposed to used cars, designer label fashions and accessories, hit the nightclubs, first run movie theatres, amusement parks, and go on vacations twice a year.
From the poor person's point of view income is not what dictates their living standards! It's the amount of credit they can access!
If a person can comfortably afford a $100k home but the bank is willing to lend them money to by a $300k home they're more likely to go towards the bigger purchase! The same is true with cars.
No matter how poor one is it's human nature to want to splurge now and then to treat yourself to some of the "finer" things in life.
All it takes is to be laid off from one's job to really be behind the eight ball. Suddenly they're taking out "payday loans" at loan shark rates.
One of the reasons why Social Security and Medicare will never be reformed is because they provide a type of safety net that guarantees some "minimum retirement" income and health care services.
The irony is our economy would crash if people started (seriously saving) their money instead of "consuming" at the rate they do.
Whenever a large segment of the population stops spending money we go into a deep recession!
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