What Recovery? 7 Of 10 Americans Live Paycheck To Paycheck

[@PersonalLiberty]

06.24.13 09:01 PM

Savings rates among American families have remained stagnant over the duration of America’s supposed recovery from the 2008 recession, and most people live paycheck to paycheck, with virtually no cash on hand to see them through an emergency.

That’s the not-so-surprising news arising from Monday’s analysis of a recent survey by Bankrate.

The survey found that 71 percent of Americans don’t have enough money in savings to weather a six-month emergency’s worth of living expenses, 50 percent have no more than three months’ worth of savings, and 27 percent have no savings at all.

Senior Financial Analyst Greg McBride said there’s a strange dichotomy separating Americans’ relative optimism concerning their net worth, job security and progress toward retirement from the reality of chronic paycheck-to-paycheck living:

Just one in five Americans feels their overall financial situation is worse now than one year ago… [But]Americans continue to express discomfort with their level of savings.

And it’s no wonder, looking at the lack of progress Americans have made in establishing an adequate savings cushion. Just 24 percent of Americans have enough savings to cover six months’ worth of expenses — comparatively unchanged since 2011 and 2012. At the other end of the spectrum are the 27 percent of Americans that have no emergency savings whatsoever, further highlighting how little progress Americans have made in moving the needle on emergency savings.

Aside from exaggerated proclamations from President Barack Obama that the U.S. is on a strong track toward a full economic “recovery,” part of the reason for sluggish savings can be attributed to some families’ focus, during the post-recession years, of getting out of the red before even thinking about getting into the black. Many are still whittling away at debts, according to financial planner Richard T. Fight, and others are simply still in paycheck-to-paycheck mode after blowing through their savings when the recession claimed their jobs or forced them into an unexpected retirement.

“Three months’ worth of expenses is hard to think about when you’ve been trying to find work for so long,” he told Bankrate. “People who [are] unemployed or underemployed are just trying to get by.”

It’s worth noting, also, that the survey doesn’t clarify whether it considers government-backed income replacement funds like SNAP cards, subsidized student loans and Pell grants, unemployment and TANF (Temporary Assistance for Needy Families) as income in its survey methodology.




http://personalliberty.com/2013/06/2...k-to-paycheck/