One in four Americans has more debt than savings

[Javaman]

http://lifeinc.today.msnbc.msn.com/_news/2012/02/21/10468068-one-in-four-americans-has-more-debt-than-savings

Many U.S. consumers are so deep in a financial hole that even as the economy begins to turn around they can’t quite dig themselves out.

A survey by Bankrate.com released Tuesday found that 25 percent of Americans have more credit card debt than they have in emergency savings, and that spells trouble if an emergency situation actually hits.

Consumers are doing better when it comes to living within their means, said Greg McBride, Bankrate.com’s senior financial analyst. But, he added, years of stagnant wage growth, high unemployment, declining home values and escalating household expenses have strained wallets. “Even though there’s been progress things are still out of whack,” he said.

And the economic pictures may get even gloomier for consumers if gas prices continue to escalate, he pointed out. Last year, he said, “60 percent of Americans said they cut back on discretionary spending because of gasoline prices.”

more at link...

[xchrom]

1. Du rec. Nt

[Bonobo]

2. I bet it's worse than that.

Let me just think out loud here...

The survey was done by "Bankrate.com" so could it be that the survey was of only people with bank accounts?

Seems likely to me, but even if it was only disproportionally of people with bank accounts, it would skew in favor of those that do have savings.

Many, many people I would guess have ZERO savings, living on paychecks month to month and with a credit card to smooth over the inevitable disparities.

So I am just guessing, but I think 25% is HIGHLY optimistic.

Oh, and just to make it even worse... why NOT consider a hoe or car loan to be debt? It IS debt after all.

Until you are free and clear from your home mortgage, can you even claim to really be saving?

[zipplewrath]

3. There was a time you could

Until you are free and clear from your home mortgage, can you even claim to really be saving?

There was a time you could. If the value of the home was greater than the debt on the home, your net worth was positive. You "owned" more than you "owed". Today, there are probably a tremendous number of people who can't make this claim, and won't be able to for 10+ years.

If you don't have a bank account, you'll have a hard time having a credit card. If nothing else, you'll need a checking account out of which to pay the credit card.

The survey probably isn't all that far from reality. There have been surveys before that show that 40% of bank card holders carry no balance from month to month. So you'd only need 35% that carried a balance smaller than their savings (401K, Roth IRA, CD's, savings accounts, etc.) to end up at 25% that owed more than they had.

[intheflow]

4. I agree.

I'm middle-aged, white, run in educated, employed circles and come from a solidly middle-class background. I can't think of anyone in my immediate circle who have any savings to note. Most are paying off their own or their kids' student loans, a mortgage, and/or medical expenses.