can you come up with $400 in an emergency

Hazelwood, MO · Member since 2017 · 40 posts · 21 votes

Hi,

I was reading an article a few days ago that said 40% of Americans can't come up with $400 if they had an emergency. I couldn't believe almost half the country is that broke. The median household income is 60k, so where is the money going. Was Senator Chuck Grassley right that they were spending it on booze and women lol. I usually don't spend more than 1000 a month. I own my own place so there is no mortgage and I'm single. Please let me know if you could come up with a $400 in an emergency and what your expenses are.

-200--food

-400- car payment, gas and insurance

-100- utilities

-100- internet and phone

-200-- property taxes and house maintenance

Total

-1000

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Leon F.

Louisville, KY · Member since 2015 · 26 posts · 75 votes

it's not that wild when you think about regular people with low paying jobs and kids. $15/hr 40 hours a week =$600 (if u get40hrs. After taxes 600 is more like $500. So you got $2000/ month. rent: $600-700 car payment $200-300 gas$$$100 (low) car insurance$100-200 cell phone$100 utilities: gas/electric/water$200 more than half of your monthly income is already eaten up before grocery and other incidentals. add in a child or 2 or 3 that you have to feed and clothe, send to daycare or buy pampers etc and suddenly it's not so hard to see why people are broke. that's why check advance tote places exist. allot of people are out here living check to check literally and any little hiccup can throw everything off track.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
@Bob B. sad part is I pay more a day income tax than this person spends per month to live.. LOL>
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David Wong
Investor / Operation Manager · Seattle, WA · Member since 2014 · 65 posts · 10 votes
8y
Wow.. I never thought America was that broke. I always wondered, but I guess I'm doing alright. Thanks everyone for the info! That being said, reading books like rich dad poor dad definitely opened my mind. Pay yourself first is definitely true in this lifestyle!
1 Reply
Account Closed
Huntington Beach, CA · Member since 2014 · 15 posts · 6 votes
8y
Originally posted by @Anthony Dooley:

It's all about choices. I see 20 year olds driving very nice cars, wearing $200 basketball shoes, eating out at very nice restaurants when I'm there, and shopping at expensive stores. I can afford to do these things, but I choose not to most often. People under 30 don't make a lot of money, but they are living larger than me sometimes. This is why the rich get richer because they don't blow their money on lifestyle as a percentage of their income.
There are a lot of 20-somethings with money these days. Don't underestimate the income these millennials with 100k Instagram followers or were into cryptocurrency before it blew up (for example) are bringing in. I know some of them, they are living larger than you and I combined. $20k just for posting a link to a skin care product is nothing to sneeze at.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
@Account Closed VERY WELL put the amount of under 35 YO' that have made big money and by big I mean have 7 figure liquidity is astounding these days.. far more than in my day.. I am so encouraged by their success that I am thinking my SS will be coming in after all. !!
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Jon Mccarthy
New to Real Estate · Biddeford, ME · Member since 2015 · 73 posts · 24 votes
8y
I can but it is hard as can be for us. This is what I am up against tell me what you think.
I am married 2 kids in laws live with me another 2 so I am up too a house of 6 now. I have 3 dogs and 2 cats.
so here is my list of bills spelled out to you best I can because my wife does the bills and I do not have the patience for it.
Car 1 - 290
gas - 80 per month
Car 2 - 570
gas - 320 per month give or take
Food - 600 give or take per month
mortgage - 1197
2nd mortgage - 50
internet - 70
netflix - 15
cell phone - 300 not sure about this one we have 4 lines verizon you get the pic.
debt consol. - 300 per month
trash/water 210
electric 170
bigger pockets 30 per month
im sure there is couple other bills in here i am not aware of. lol
wife's pay check is about 3,500k per month take home
I work 2 jobs and am working on doing 3 jobs soon just so we can get out of this hole and get started. my second job is self employed i do all yard work and bring in another 200 per month on that and this image is my check for one month of work from the city so you can see how it is hard for me to save 400 to have in a emergency. Because if i go get a CCD and keep it for such an emergency and use it then that is another bill per month.
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Jon Mccarthy
New to Real Estate · Biddeford, ME · Member since 2015 · 73 posts · 24 votes
8y
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
Originally posted by @Jon Mccarthy:

no line item for auto insurance.. pretty obvious your auto heavy.. its almost half of your income..
@steveVaughn is someone you should connect with on how to manage your situation he has some really good ideas and tips ... he is the Dave Ramsey of BP and one smart dude..
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Jon Mccarthy
New to Real Estate · Biddeford, ME · Member since 2015 · 73 posts · 24 votes
8y
@Jay Hinrichs forgot about that auto ins. is 207 per month wife drives so much had to get her a new car but its a hybrid which is the sad part you would think the gas mileage would be better but nope. So she is in the process to find a job closer to home and that will cut gas and wear and tear down on the car but the payment will still hurt. If we could get rid of the car payments most of the problems would just flip around and debt would disappear fast.
I will half to check out @Steve Vaughan thank you.
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Terry Miller
Akron, OH · Member since 2015 · 178 posts · 189 votes
8y
Originally posted by @Jon Mccarthy:

Something told me to click on this, and I am glad I did. This is interesting that you have the same job my best friend had.
It is public employee union. The minimum is about 20% more (per hour) than you have as your current rate. And I think you have had this job for a bit, so you would get at least a dollar on top of that. Is Cheyenne better than Akron? Maybe. Maybe not.
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Jon Mccarthy
New to Real Estate · Biddeford, ME · Member since 2015 · 73 posts · 24 votes
8y
@Terry Miller I have no clue if Akron is better. I wish we would go union then we might be better off. I am just grinding till I can get my real estate started.
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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
8y
Originally posted by @Jay Hinrichs:

no line item for auto insurance.. pretty obvious your auto heavy.. its almost half of your income..
@steveVaughn is someone you should connect with on how to manage your situation he has some really good ideas and tips ... he is the Dave Ramsey of BP and one smart dude..
Thanks for the kind words, Jay!
Completely agree about being auto heavy. Pmts, ins, fuel is running high. Hard to get ahead with heaps of depreciating metal in your driveway.
Simply stated, all things with motors in them should not equal more in value than half of one's annual income. If they can't be paid off in 2 years, they need to be sold.
I know doing a budget isn't fun, but find the 'patience' for it or continue to be overwhelmed. I recommend Dave Ramsey's FPU. It's only $99 usually and will help you get on the same page and in better control. He makes it fun even.
Good luck and thank you for sharing, Jon. I know that's not easy. Recognizing there is a problem is step 1 so congrats on that!
1 Reply
Ginger Schmidt
Murray, KY · Member since 2016 · 14 posts · 0 votes
8y
Who is your insurance? my is higher.
0 Reply
Marie-therese Tai
Brooklyn, NY · Member since 2018 · 18 posts · 9 votes
8y
I could come up with $4000 if I had to, I'm self employed , and with two kids in high school one heading to college in the fall, I'm very conscious of the bills, I have an emergency fund, a years worth of living expenses,it's also the money I'm hoping to spend on real estate when the market cools off. My dad put me through college, and I'm hoping to do the same for my kids , but like most middle class families I earn enough to put myself out of the running for financial aid for the kids and not enough to cover college out of pocket, I've been saving for college since the kids were born - and guess what ? the 529 plan for my son will about cover a year of college and dorm at a State Uni, solution ?- community college for 2 years , and then a transfer to a 4 year. I agree with the posters that a lot of the problems are prioritisation issues, I see folks come in the office wearing $400 shoes, their kids in designer outfits and they boast about it, but they don't have a dime in the bank. My older kid still can't save to save his life, money runs through his fingers like water, my younger kid is much better. I shop at Walmarts, buy stuff on sale , and drive a car that is 8 years old and paid off, and I fully intend to drive it another 5 years and then give it to my kid
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Laith Ali
OP
Hazelwood, MO · Member since 2017 · 40 posts · 21 votes
8y
@Bob B. Most people don't like my idea. I know I will never win.
1 Reply
Laith Ali
OP
Hazelwood, MO · Member since 2017 · 40 posts · 21 votes
8y
@Jon Mccarthy What kind of cars do you drive. Did you get them new? 570 is alot for a car. You might want to try to get a 4k or 5k car. You can have a mechanic inspect the car for you and cars these days are built pretty good. If you get a mass produced car like a Toyota corolla or Honda civic or ford fusion it will be easy to get parts. Plus you pay less for auto insurance.
internet- 70 sounds a bit high, unless you're on super fast speeds. I pay $40 a month for 60Mbps
cell phone- This is also pretty high. T mobile has 4 lines for $120, but its only 10G of data.
1 Reply
Jill F.
Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
8y
@Laith Ali
By failing to carry medical insurance in the US you are making your personal risk of a catastrophic medical event a public risk. You WILL prevail on the tax payer to bail you out if become seriously ill-- you will not curl up in a ball and die and say well I can't afford health care so I won't take it.
I thought I was perfectly healthy when I found I had cancer and my husband thought he was perfectly healthy right up until his heart quit functioning. NOBODY thinks it will happen to them.
2 Reply
Account Closed
Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
8y
Originally posted by @Laith Ali:

@Terry Miller If taking something that doesn't belong to you isn't theft then what is theft. If you have no rights to your property then you're a slave. If you have to pay the government their rent every year or they will take you're land away then you don't own the land. If you're a farmer who has to give a portion of his crops then you're just a sharecropper. Your idea of society is really just slavery without the whips. Paving a dirt road that I didn't want is in fact immoral. A contractor can't come to my house and force me to replace my driveway or he will kill me, we would call that extortion.
All societies have had some kind of shared resource model. Shared resource could be labor or in larger societies, taxes. The health of a society and democracy is not so much in the fact they collect taxes but what the citizens can expect in return. The US probably has the worst ROI on your taxes compared to any other developed country. You pay taxes. But then college costs a ton and often the public schools are so bad you need to pay for private school. You pay extra for healthcare. You pay extra to visit a National park or museum. Your libraries are depleted. The streets are pot holed and third world like in many cities. You have filth and high crime. So by that measure it is a total waste of money to pay taxes. But the problem is not the taxes. The problem is lack of democracy and control of the government completely by vested interests.
3 Reply
Deanna O.
Rental Property Investor · San Diego, CA · Member since 2010 · 377 posts · 314 votes
8y
I went to Cal. Did it ever strike you as odd that Berkley streets are like a 3rd world country, but the potholes disappear as soon as you cross into Oakland & Emeryville? Check it out next time you drive on Telegraph or Ashby.
0 Reply
Account Closed
Paso Robles, CA · Member since 2016 · 4 posts · 1 vote
8y
I drive a 12 year old car, and I rent an apartment, but I have an emergency fund and could come up with the cash to cover 35 separate $400 emergencies.
1 Reply
John Spina jr
Contractor · Staten Island, NY · Member since 2016 · 147 posts · 38 votes
8y
I think it's because aside from monthly expense, most middle/lower class Americans are drowning in credit card or some other form of debt. This is an extra expense to add on to their total expenses each month. I get paid pretty well at my job and found it hard to save money. Once I realized where my money was going I was sick. ( New car lease payment, credit card debt+ regular monthly expenses cell phone,food,gas, haircut etc.) I'm glad to say I finally see the light at the end of the tunnel. I've paid off almost all my credit card debt and my lease is being returned next month. I'm excited about the money I'll be saving. But I learned the hard way.
1 Reply
Eric Maxwell
Rental Property Investor · Chicago, IL · Member since 2018 · 3 posts · 4 votes
8y
My answer is yes. For one reason only. We Currently live well below our means so 400 shouldn’t be a stretch.
We both work in “in demand” careers. I am a machinist and she is a certified pharmacy tech (corporate) .
Most importantly, We each have a side hustle (home based LLC for our consulting business and our photobooth business) those are the only things we spend money on that continue to make us money.
I’m 30 my wife is 25. Our total expenses all things considered is roughly 3800 per month. We have 3 children.
We are not well off, nor wealthy. We’re pretty average. We just view money differently I suppose.
Our motto when buying anything:
Is it worth it? Will it last? Will it make us money?
Also if one of us says no to a purchase of 350+ the answer is no.
A bit about me.
I come from extremely humble beginnings. I’m being humble when I say Extremely.
I graduated high school 2 years before the recession. I saw the good economy right before the downturn and the subsequent Bank crisis in the midst of that.
Knowing nothing about personal finance. I don’t care to use credit or maintain a credit score. It cost money to do that. No car or property is so important that I need to go broke for it.
The average American is in debt and has poor credit. It keeps the average American going to work.
When the average American should be thinking of ways to make their money work for them.
No matter what situation you find yourself in there is a way out.
It starts with one word. Sacrifice.
One phrase. Live like no one else will for a period of time.
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
Some people's idea of coming up with $400 is a payday loan or line of credit. I wonder how many people actually have $400 cash in a bank account or better yet, $400 cash in pocket.
2 Reply
JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes
8y
Originally posted by @Account Closed:

All societies have had some kind of shared resource model. Shared resource could be labor or in larger societies, taxes. The health of a society and democracy is not so much in the fact they collect taxes but what the citizens can expect in return. The US probably has the worst ROI on your taxes compared to any other developed country. You pay taxes. But then college costs a ton and often the public schools are so bad you need to pay for private school. You pay extra for healthcare. You pay extra to visit a National park or museum. Your libraries are depleted. The streets are pot holed and third world like in many cities. You have filth and high crime. So by that measure it is a total waste of money to pay taxes. But the problem is not the taxes. The problem is lack of democracy and control of the government completely by vested interests.
What we really need are more people who understand the basic problems as you so succinctly put it. Well done!
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2 Reply
Kevin Coggins
Spring, TX · Member since 2016 · 243 posts · 203 votes
8y
Originally posted by @Steve Vaughan:

Originally posted by @Jay Hinrichs:
no line item for auto insurance.. pretty obvious your auto heavy.. its almost half of your income..
@steveVaughn is someone you should connect with on how to manage your situation he has some really good ideas and tips ... he is the Dave Ramsey of BP and one smart dude..
Thanks for the kind words, Jay!
Completely agree about being auto heavy. Pmts, ins, fuel is running high. Hard to get ahead with heaps of depreciating metal in your driveway.
Simply stated, all things with motors in them should not equal more in value than half of one's annual income. If they can't be paid off in 2 years, they need to be sold.
I know doing a budget isn't fun, but find the 'patience' for it or continue to be overwhelmed. I recommend Dave Ramsey's FPU. It's only $99 usually and will help you get on the same page and in better control. He makes it fun even.
Good luck and thank you for sharing, Jon. I know that's not easy. Recognizing there is a problem is step 1 so congrats on that!
I've never read any of Dave Ramsey's stuff, but I've found useful information online and at least some of that has aligned with what I've heard him teach. Just some ideas on what I've done/areas I've considered to make extra money for those looking:
If you have a Microsoft license, Excel has budget templates that should be able to help you get on the right path (and they are formulated so less calculations!). There is probably similar things out there without having to use Excel, but that's what I did. Took this and figured how much I could save (or lose) in a given month - things were tight when my wife was out of work! Now I try to forecast how much revenues I have for the next few months versus large expenses coming up.
Never got into real estate yet, but I've kept my eyes on the market just waiting on the right time to jump in. Having pretty good success elsewhere, and there is a lot of different things you can buy to make money. So far I've preferred liquid investments, where within a few months I can get my cash out of it and hopefully a 20%+ return (in a few months 20% isn't bad, but until I can scale up it's never to make too much $$$). Pressure washer, bounce house, etc. can spend a few hundred or a thousand and make that back pretty easily in a month...takes no skill.
0 Reply
Mark F.
Investor · Orange County, CA · Member since 2009 · 230 posts · 138 votes
8y
@Jon Mccarthy I would definitely see if there's a way you can get rid of those car payments. Add up the balance of those two loans and think about what you could do with that dollar amount in real estate. Also consider how long it will be before they're paid off at the rate you're going. Do you want to wait that long to get started on your real estate career? The years pass quickly and it's better to start working on your business sooner rather than waiting because of two expensive and depreciating cars.
BTW, I can also vouch for Financial Peace University. My wife and I did that years ago and it was a great program.
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