A Whopping 62% of Americans Have Less than $1,000 in Savings. Really?!


Here’s a sorry statistic for you: 62% of Americans have less than $1,000 in savings.

For real.

GOBankingRates recently released some survey results that showcase the sorry state of the average American’s finances. The results show, among other things, that over 62% of Americans have less than $1,000 in savings and that this is probably a conservative estimate. Many of the respondents said that they save “just the minimum balance requirement” to avoid fees — those minimums are often below $1,000 as well.


Put another way, this study shows that about two-thirds of our country is just one bad day away from being homeless! Even if they can access credit or borrow from friends or family, these folks are allowing events outside of their control to potentially devastate their finances.

Now, I realize that everyone has a different viewpoint when it comes to savings and that savings accounts are currently notorious for historically low interest rates. So long as you thoroughly understand the ebb and flow of your income and expenses, the definition of “adequate savings” is free to vary from individual to individual. But I believe that for the vast majority of Americans, “adequate savings” is in the ballpark of at least $5,000 for a single young man or woman — and far more for the average family.

But isn’t at least $5,000 an astronomical amount of money??


Five-thousand dollars is the bare minimum. Even thinking about investing, going on vacation, or purchasing luxuries before reaching that amount is dangerous, foolish, and greatly reduces your opportunity to build wealth down the line. Even those that are currently paying down high interest debt on things like credit cards or attempting to get current should probably pay those off after saving the first $1,000. The point of savings beyond that amount is, of course, largely to prevent high interest debts, and those should be paid prior to saving beyond that first $1,000. But I digress.

In this article, I’ll explain not only the enormous risks that 62% of Americans are taking by failing to save, but also the incredible opportunity cost of failing to save. Now, I normally wouldn’t feel the need to spell out the risk of not having any money saved up for a rainy day.

That should be obvious.

Unfortunately, it seems clear that Americans must not understand the importance of a basic level of savings. The only explanation I can give for this systemic fiscal irresponsibility is that at least 62% of Americans are simply uneducated on the risks and consequences of failing to save and build a sturdy financial base.

Now, I often hear from folks that some people simply can’t save. That Americans are being squeezed by “the man” and don’t have the ability to sock away their earnings. I’m not referring to the rare exception of the person that simply cannot get by, who is working two jobs, living cheaply, thoughtfully planning his or her budget, and still can’t save. If that person exists, he or she is excused from not having savings.

I will say that I have been searching for several years for a way to work with the person I just described and have yet to meet someone who fits that description. Everyone I’ve worked with, including some with shockingly desperate personal situations, is capable of saving after a little bit of basic financial planning and sticking to a dedicated plan.


Related: 5 Ways to Use Real Estate Investing to Teach Your Kids About Finance

Every able-bodied and able-minded person capable of reading this can and should have more than $1,000 in savings.

Plain and simple.

Those who don’t are taking a terrible gamble with their lives, living needlessly and dangerously on the edge.

And it’s not just about risk. They are forgoing the chance for a better life as well.

It’s seems likely to me that many people, perhaps even a majority of Americans, don’t understand that savings have a far more positive impact than merely limiting risk or keeping folks afloat in hard times. Liquid savings actually lead to incredible opportunities to live a better life by increasing career opportunities, allowing folks to save money just by having savings, and providing the basic building block upon which to begin investing.

With that, read on to learn about the obvious risk of failing to save and perhaps even more importantly, the not-so-obvious opportunities afforded to savers.

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The Obvious Risk of Failing to Save

Ever met anyone who’s never had a bad day? Yeah, me neither.

Bad things happen, and the accompanying large expenditures of time and money that go into resolving them are a part of life. It’s not “bad luck” or “unfair” — it’s life! Get over it.

It’s impossible to predict when life is going to happen to you, and it’s equally impossible to predict the exact financial consequences of life.

But it is an absolute certainty that life will happen. It’s not a question of “if,” it’s a question of “when” you’ll get slammed.

You have a choice. You can either be prepared to handle life. Or you can fail to prepare. That choice is made today, here and now in the present.

If you make the choice not to prioritize savings, then you and I may work together one day. I help the poor and homeless work through their financial crises, get them into shelters, and teach them about how to make the long, hard climb out of financial destitution and institutional dependency. Their goal is to move forward on a path to financial dignity and independence. I often hear about their “disasters” and how unlucky they were and how money is evil.

If you do save, we’ll never meet, and you may be reading this and trying to think about the last time a “disaster” nearly ruined you. Your $10,000 in the bank was barely dented when you were terrified that your kid was sick and took him/her to the ER. That same night threw the non-saver’s life out of control and into a devastating spiral of debt and delinquency.

A question that I often pose to those that I work with is this: What’s the difference between someone with no or low savings and a homeless person? The answer (stated earlier) is this:

One bad day.

A really bad day can happen to anyone. I don’t care how savvy you are with finances, how great an investor you are, or how much money you make. The only thing that gives you a chance against long-term financial devastation is simple consistency. Saving consistently provides the buffer needed to stop debt pile-on in its tracks, to cover things like the windshield crack, the midnight ER visit, or identity theft before they are able to disrupt your life.


The Not-So-Obvious Opportunity Costs of Failing to Save

Most people think that the reason that they have no savings is because they have no income. I’ve found that the opposite appears to be true — those with no savings often have no or low income.

It’s probably a chicken or egg argument.

But I’d simply ask that for the next few minutes, you entertain my “egg” side of the argument and ponder if my case may actually have some merits — that those who save are thus able to increase their income and both earn and save more in perpetuity. With that, here are three arguments that I’d make for why savings precede income — and not the other way around.

Argument #1: Savings increases employability and salary potential.

The fact of the matter is that a solid savings account offers individuals a high degree of stability in their lives. The guy with the great credit score and the solid savings account is far more likely to avoid problems that would prevent him from showing up to work, becoming distracted, having money related family problems, and most assuredly has something to lose.

This makes him a much better prospect as an employee. He is unlikely to do something stupid compared to the guy that is barely scraping by and has to scramble every single month. He is also unlikely to be followed by “bad luck” or “crazy family problems” that force him to miss work.

This means that he will be more likely to get the job, keep the job, and get promoted.

Ever wonder why so many employers check your credit score? It’s for this reason. Savings, a solid credit score, and a basic ability to remain consistent with finance indicates a much better employment prospect than the non-saver.

Argument #2: Savers can exploit new job opportunities.

Aside from being a better employee, a solid savings base also means that one doesn’t need the job as badly.

Not needing the job as badly is very critical in the world of employment. It allows for negotiation, advancement, and the ability to jump ship. When you don’t desperately need to hang onto your job, you can relax a little, think through difficult problems, enjoy your pace, and most importantly, jump on opportunities.

Related: How to Get Out of Debt: 5 Steps Toward Healthier Money Habits

Think about this: Suppose two folks worked the same job at $30,000 per year and had the opportunity to get a new job for $50,000 per year. The catch is that it would take six months of training before you could start the $50,000 per year job.

Well, the guy with $10,000 in the bank is going to be able to pounce on the opportunity. The guy with $500 has no choice. He will drown over the six month work hiatus. He’s stuck. Eighteen months later, the saver is making $1,600 more per month than his counterpart. These two started in the same place, with the same skillset. But one was a saver. The other spent everything.

The interesting part is that the non-saver usually doesn’t even know he missed an opportunity. It’s not even a consideration to stop working for six months because he has no savings.

I see this reality unfold for people at every level of income — from those making $25,000 to those making $125,000. Those who don’t save, those who spend all of their paycheck, are imprisoned at their current jobs, unable to pursue their passions or scale their income, and just one bad day from facing a disaster that can force them to uproot their lives.

Argument #3: Savers can invest.

The last piece of the pie here is that a large savings account or liquid reserve can allow you to make “investments” that save you money or gain you access to opportunities that others can’t.

Now, I’ll admit that for a while I personally used to keep a very small amount of money in the bank because I felt that the low interest rates on checking and savings accounts were an opportunity cost that I couldn’t justify. I’d feel that every dollar not invested in the market was a lost opportunity to earn returns. Earning less than 1% on a savings account seems unacceptable on the surface to anyone that considers themselves an investor.

Now that I’ve significantly upped my savings account to $7,000, I realize just how foolish I was to attempt to invest in stocks and bonds before achieving an adequate level of personal savings. Not just because I took the risks noted above, but also because I was foregoing the “returns” that a strong savings account offer to me and other savers, such as the following:

  • A saver might be able to take out an auto or health insurance policy with higher deductibles, lowering their premiums.
  • A saver can make bulk purchases on necessities, saving greatly on a per unit basis — think buying a month’s worth of groceries from Costco for $200, rather than four weekly trips to the grocery store at $75 each.
  • A saver can pay cash for larger purchases, like a used car, major repair, or recreational pursuit, allowing them to get excellent deals and close more quickly.
  • A saver can pay for things totally in advance.
  • A large savings account eliminates the need to access investments to cover large expenses, reducing transaction costs.



There is no adequate excuse for failing to pile up a savings account of at least $1,000, even for those in the most dire financial positions. The statistics cited by the GOBankingRates survey are unacceptable.

I recently worked with a woman who earned less than a few hundred dollars per month in income here in Denver (not a cheap place to live). She also had tens of thousands of dollars in delinquent debts, with about $3,000 – $4,000 more imminently threatening to pile onto that sum.

In less than one month, she was able to build up an emergency fund of $1,000, with a little planning, a pickup of some well paying holiday retail hours, and a little help from some family members who offered to babysit while she worked hard at her second job. Not only that, but in less than a month, she also began to start paying down some of her urgent debts. I look forward to seeing her progress over the next six months as she snowballs forward with her finances.

If she can do this, anyone can.

For the vast majority of Americans, savings accounts really need to approach at least $5,000, but will of course fluctuate depending on lifestyle and risk tolerance. Savings are more than simply a baseline defense mechanism — they afford basic stability, access to opportunity and are simply the best investment around for the reasons explained above.

If you don’t have savings — liquid or close to liquid capital that you can comfortably access to cover emergencies and pounce on opportunities — get your act together. It’s long past time.

Do YOU believe a solid savings account is absolutely essential? What can Americans do as a whole to begin to solve their financial failings?

Let me know your thoughts by leaving a comment below.

About Author

Scott Trench

A longtime fan of BiggerPockets and a Real Estate Investor managing his first property, Scott is the company’s Director of Operations. BiggerPockets is a BIG website, and Scott’s background in finance and big data analysis will be instrumental in the next phases of company growth and in helping to bring the resources of BiggerPockets to more investors worldwide. Scott is passionate about helping others build wealth and serving his community in whatever ways he can. In his spare time, Scott enjoys skiing, biking, and cooking, and he is a lifelong rugger.


    • Many of the readers on this blog are landlords and the fact that 62% of Americans live paycheck to paycheck has enormous implications for our business. Dollars to donuts that the vast majority of this 62% are RENTERS. They are one car ticket, DUI, car wreck, ER visit, broken arm, or temporary layoff away from missing at least one month’s rent. How often do they get caught up after getting behind? I have had renters change jobs for a better job and they miss a paycheck for two weeks because they are getting set up with the new employer. Guess who loses?

      Be very sure you get the largest security deposit allowed by local laws PLUS first month’s rent BEFORE you give the renter the keys to your house. NEVER agree to “work with someone” about the security deposit. Always get it first. At the first sign of financial trouble, get the renter on a payment plan or get them out.

      It is a major crime how financially illiterate the vast majority of Americans are. I typically don’t like to talk politics on this blog, but it is very telling that we are allegedly 6 years into a “recovery” and so few people have anything saved.

      Real estate has appreciated markedly since the bottom of the market and so has the stock market. Anyone that has invested in rental houses and put part of their IRA/401K in the stock market has been rewarded.

      • I wish someone would please explain the meaning of Gary’s rambling manifesto. Apparently he has some unresolved anger issues that go well beyond Biggerpockets.

        There is an old saying that says, “to profit from good advice requires more wisdom than to give it.” The article offers great advice on saving, which, by the way, takes on many forms. I recall one incident 25-years-ago that illustrates the importance of saving money. My full-time job back then supported my RE investing “hobby,” which didn’t leave much room for savings considering the financial challenge of getting started. I did, however, have enough savings to replace five HVAC units that went down; okay, I know you call that “capital reserves,” but the money wouldn’t be in capital reserves/savings had I not been disciplined enough to put it there. My point is this, it doesn’t matter what form of savings you have, just as long as you can survive life’s many financial challenges on the way to financial freedom.

        I’m currently living 100 percent on passive income, but I still keep a healthy amount of savings – collecting no interest – to get me through that eventual rainy day. I know, I’m not a smart guy in Gary’s eyes, but it has certainly worked for me. According to a report by the Employee Benefit Research Institute, only 50 percent of employed Americans state they could get together $2,000 if an unexpected financial situation arose within the next 30 days. Don’t be one of them!

        Take the information from the article as it was intended, to help! If you save money today, it will save you tomorrow.

  1. David Roberts

    Those results taken at face value seem shocking but they are misleading. For example, i have 500 sitting in a savings account, open for the purpose of benefits at the bank, and nothing more. but i have 150k in a checking account moving around in real estate, 50k after tax brokerage, and about 160k in a 401k.

    So i was likely captured as someone that doesn’t have 1000 in savings.

    I believe alot of people live on the margin, but i think those stats are misleading, as usual.

    • Scott Trench

      David – I don’t think that this applies to you if you have a checking account with that amount of liquid capital. That kind of liquid capital obviously eliminates the need for savings. Perhaps the data is skewed by that, but I, for example, have two accounts – a checking account for my personal life, and a working capital fund for real estate purposes.

      I consider that savings and would refer to them as my savings to all who ask. I can see, however, how some might answer the question misleadingly.

    • mellisa otwell

      We keep most of our bank deposited money in our checking account. I’m wondering if we fall in the category of people with less than $1000 savings. I do think this statistic is misleading since there are so many other more profitable places to invest a person’s money.

  2. Let me give a TRUE example of this, and I do mean TRUE. When I first joined my father’s Century 21 Real Estate Firm, he paid me $2,000 a month to do all of the accounting and to back him up as I was a Broker too, I was 24 years old (the year was 1984). We soon had a good staff and had a ‘power’ agent join our office. This guy was so good, he made over $1,000,000 in commissions in just 4 years and I was making $30,000 a year at the time. Two years after he had that really hot run, he had to file Bankruptcy and I had a portfolio worth over a million dollars (8 properties). The difference? I invested EVERY penny I could and he SPENT every penny he could. He drove a new Mercedes and I had a used Toyota. I saw this same guy lose $4,000.00 on ONE hand of Black Jack in Las Vegas. I could have bought a small rental in Fresno with that same money ( this was the 1980s). It is all a matter of mind set! What happened to this guy? He died of a Heart Attack in his early 50’s. Put aside today’s “one day of pleasure” for tomorrow’s “YEARS of pleasure.”

  3. Anil Samuel

    I completely agree with your assessment of how critical savings is to financial freedom. I recently completed the Dave Ramsey class, financial peace university. The most important thing I realized to grow my investments was to get on a firm budget and start stock piling cash in a savings account to deploy when I see a worth while investment instead of scrambling to find cash when I see an investment opportunity.

  4. Joel Owens

    Yes do not live above your means to show you have “made it” to others. Instead live off of about 10 to 20% of annual earnings.

    If you make 500k a year live off of 100k or less and invest the rest. Next year you can move it up to 110k or 120k etc. of lifestyle living if you want or just take the extra and keep investing.

  5. Michael Boyer

    Nice piece, and for a similar theme with info lanldords can use in their strategies see the “FINRA report on financially fragile renters in America ” (just google that).. The precarious financial situations of many Americans is relevant for lanldords who rent to the public at large and for any flipper or realtor that needs a buyer with the credit and savings for a downpayment and to meet other ratios….one takeaway I am using is to aim more at the lower end of the pyramid .. I am sure some people have success with high end rentals, but I like properties that the bulk of renters can afford…

    • Scott Trench

      No surprises in that article – thanks for sharing it Michael! I think you are smart to target the widest audience possible, and I also see merit in the other side – only targeting those with the means to remain in total command of their finances and pay consistently over the long-term.

  6. Roy N.


    These days you could change your article from reading “Americans” to “North Americans” {though things may be better in Mexico}. To your north, Canadians, once known as a nation of savers, are now living a very similar paycheque-to-paycheque lifestyle with heavy debt loads. Just this year, the average household debt hit a new record level of 164% of income.

    Much of this is housing/mortgage debt (40 – 50%) – national average housing price is 5.7 times household income, markets such as Toronto (7.x times) and Vancouver (11 times) are critically unaffordable. Just two weeks ago, the Bank of Canada issued another statement of concern which indicated that 8% of Canadian households have debt exceeding 350% of their income – this number has doubled since 2009.

    With our Canadian dollar now at $0.72 USD (down from par three years ago) and a pending end – and likely correction – of two our two decades of ascending real estate prices … and American’s with savings could have marvellous real estate investment opportunities in Canada in the next few years.

  7. That is an interesting story, Mike. I’ve experienced similar life lessons from family and friends on how NOT to manage money. My conclusion is that good money management is less about math and more about personal psychology; that is, how one views money. My parents taught me some great lessons that allowed me to exhibit Dave Ramsey-style traits before there was a Dave Ramsey. I was in a 25-year sales career that generated larger-than-average incomes, but saw many of my colleagues on the hamster wheel of life chasing some elusive lifestyle of excess. In fact, one of my salespeople made over 6 million dollars in his sales career, but is now broke and living in a friend’s loft. These early life lessons taught me to focus on net worth and long-term security rather than immediate gratification.

    Understanding the psychology of money management is the first step to long-term security. We unfortunately have a society of ill-educated and psychologically challenged people that will never fully understand the benefits of good money management.

    • Scott Trench

      I agree Randy – It’s certainly not all about money, it’s about the balance, freedom, and choices that sound money management can bring to our lives. A lot of money without a quality ability to manage it will be fleeting and lead to no excess happiness.

  8. I can attest to that. Even in the most affluent neighborhoods around our town you’d be surprised at the amount of people who have absolutely nothing. No savings, no retirement, only what’s left over from last week’s paycheck. Yet they got a $300,000 house, two cars, and a boat. That has to be stressful living that close to the edge.

    • Roy N.


      We had a tenant a couple of years back who pulled down a 6-figure salary, yet was always on the edge – lots of toys, fancy clothes, a Merc, and bling, but his rent was late 50% of the time. We opted not to renew his lease.

  9. Randy E.

    Preach, brother, preach!

    One thing is true. Nearly everyone can save. The good news for us is that if everyone saved like us (and I know “us” save in different ways,) it would be harder for us to advance in the Real Estate business. Their lack of planning makes our planning all the more effective.

    • Scott Trench

      Haha! I always wonder – if everyone understood how to manage money, would we as savers and investors be worse off?

      Personally – I think that we’d ALL be better off – less inequality due to a rise in competency across the board is very desirable in my book. I think that we’d find that everyone could be more prosperous and see more advancement.

      As things stand, it’s merely easy to be way more financially successful than the average, financially illiterate person in the same way that it is easy to beat someone that has never played chess when they don’t know the rules…

      • Interesting comment, Scott. My successful sales career wasn’t [necessarily] due to my skills and talent, but rather the lack of skills and talent around me. Good for me!

  10. Pat Bournes

    Hello All. Great article. it is my experience that Americans used to be great , frugal savers. This is especially true of anyone who was touched by the depression. But for the last 30 years our personal and national finances have been treated like we are drunken sailors on shore leave for the first time in two years.

    I just checked my Bank account and indeed I have less than 1000 dollars in my savings. But I have many times that amount in my checking. I have many, many times that in my business account. And I have many, many, many times that in my real estate portfolio. So once again the statistics are factually correct but do not tell the true story. Good article nonetheless.

    • Scott Trench

      Pat – I think that someone else made a similar point. I agree that if you have a ton in a checking account that counts as savings. I have a “savings account” with a few hundred dollars in it, but tens of thousands in checking and business accounts… those are my savings, and I would certainly refer to them as such.

      Perhaps, however, some other folks wouldn’t consider them savings.

    • Luke Elliott Schneider

      This is it. The study looked at the savings account balance of the average American. There’s just no reason in this economy with a fraction of a percent interest rates for savings account to hold ANY money there.

      Most just hold any liquid funds needed in their checking account and keep any “real” savings in an investment of some kind. There’s just no value in holding money in a savings account so no one does it. That’s where this skewed statistic is coming from.

  11. Brian Woods

    The article starts with a false premise namely that 62 percent of all Americans have less then $1000. Methodology states that there was only 5006 responses from the U.S. Internet population that they then extrapolate for the entire population of the U.S.
    Try running the poll with only members of this site and I bet the response would be different.

    The advice to increase savings is sound.

    • Scott Trench

      I’d certainly hope that BiggerPockets readers would not reflect the average population! We wouldn’t be doing our jobs if our audience had only AveragePockets!

      That said – the sample size of the poll is, in my opinion, reasonable. That’s often the standard for other widely cited surveys, and there is of course a standard margin of error..

  12. Brad Lohnes

    Nice, article, thanks, Scott. And Merry Christmas!

    It’s always hard to know exactly what the stats are based upon without reading detailed reports, and even then, the report’s methodology is the most important piece of information. But I do think that a lot of people, not just in America, are living very close to the edge. I lived like that in my younger years. It’s not much fun, but a lot of people (including myself at the time) just don’t really get how money works or what you’re supposed to do with it, besides have fun! Finances can also put serious strain on a relationship – my parents fought a lot growing up, mostly about money, and ended up splitting after 25 years of marriage.

    I do think your recommendation of $5000 is a little low. Most financial planners recommend 3-6 months worth of expenses set aside in savings, and even that leaves a person fairly close to the edge. (As Robert Kiyosaki said, wealth is measured in time, not dollars.) As I have young children, a wife mostly staying home to look after those children, and a mortgage on our home, we have 6 months worth of expenses set aside. That can seem like a lot of lost opportunity to some people. I think that the key is to figure out how to leverage it.

    For example, we have done one of the things that you’ve recommended: get health insurance with a higher deductable. We keep our premiums lower because of this and also know that we limit the downside of a serious medical situation – after our deductable, the rest is covered, and the deductable is very easily covered by our emergency fund. We also have income protection insurance for my income, but have a longer “stand down” period before it can be claimed – once again our premiums are lower because of this, but with a 3-month stand down period, and 6 months worth of expenses in the bank, we’re covering our downside.

    Finally, I’m not sure whether this next one is available in all markets – it’s not even common here in New Zealand. But we have a portion of our mortgage on a floating interest rate which is “offset” by money that you have in a designated account. So, if we have $25,000 sitting in an emergency fund, we can then float $25,000 of our mortgage, and on that portion of the mortgage we pay zero interest. (You actually pay on the difference, so if we needed to use some of our emergency fund, we’d pay only on the amount that’s not offset.) This is a recipe for paying off the mortgage faster (zero interest means each payment is all principle) and it means that our money that’s just “sitting in the bank” is actually earning at least whatever fixed interest rate we could get at the bank. With this product, we’re actually considering increasing our emergency fund, since we end up reducing the interest we pay on our mortgage…but still have the funds available if we need them (which you wouldn’t have if you just paid the money against the mortgage).

    I’m always looking for more ways to leverage the money set aside, so keen for new ideas!

    I think the biggest advantage, though, is a slight sense of internal calm. Whatever happens financially, we’re probably covered in the near term. If it’s something major, then we have time to try to raise additional money, such as sell a rental property or even our own home – not something we’d want to do, but by having savings set aside, we have bought ourselves some time to do so. If it’s loss of my job, then I have time to find something else without necessarily “settling” out of desperation.


  13. Mario Mormile


    Well put! I have always been a saver. The point you stressed about being so busy living in a way where you’re struggling and stressing out big time to get by, therefore leads to missing opportunities, is huge! What a great way to view this! Merry Christmas and God bless

  14. Pete T.

    I think having liquid money available is what is important, not necessarily in a savings account. I don’t think the problem is quite that bad, but there are actually a lot of jobs/people that are in situations where saving is difficult, especially in families with more mouths to feed and multiple people that might have access without discipline.

    • Scott Trench

      Pete – a couple of other folks have mentioned that liquid money is the key, and not a savings account. I agree with that completely!

      As for your second point, I think that the key word is “discipline” – It is up to us as individuals to maintain discipline with our finances, and to prevent those without discipline from gaining access to all our part of our savings.

  15. I don’t have a “savings account”, my 8 months emergency fund-to cover all my expenses – is at 5% on prepaid cards. I would’ve answered “no” to the question, “Do you have s savings account with Chase our BOA?” It’s ridiculous to keep your money in tge “bank” at 1%

  16. Great article. I too lived most of my life like most broke people. That is until I learned Just how important it was to build up savings. Now I’m consumer debt free and have our six month emergency fund. It’s been articles like this that helped us get on the correct path.

  17. Kevin Harrison

    I would like to see how this poll would change if it were asked “how much money can you reach out and put your hands on today without picking up any more debt” IE what can you get without taking out a, refinancing a mortgage, or using a credit card. I think this would be a much better indicator of how our average citizen is doing financially.

  18. Jay Gee

    Nice read. Thanks for posting.

    This article is reminiscent of when I first ventured into the exploration of REI back in 2006. I bought Dean’s book, “How To Be A Real Estate Millionaire.” Overall, it was an good read and got me on my path. For anyone who has read it though, they’ll likely remember, too, that the book was split into 3 sections. The outer two sections were real estate oriented. The center section? It was all about personal finance and buckling down to take hold of one’s own income, with the intent to find investment money.

    That center section of the book could be a critical component of a middle school or high school classroom to teach young people how to avoid consumerism and all the poor money habits that lead to the “one bad chance” that a person can’t pay rent or a mortgage and so forth. Also, I’m a landlord and understand what others said in their replies about being wary of tenants with bad habits.

  19. Back in the late 70’s as a single young man working in electronics, I felt comfortable if I had one grand in the bank – if my car died, I could buy another one.
    Fast forward to last year: I rented an apartment to a fine young man with a job. He and his girlfriend together made almost 3 times the rent. One day, his car died. He quickly lost the job and I had to evict him. Ick.

    Nowadays, I feel undressed without at least $50K in the bank. $100K is better.

  20. Dan Heuschele

    The premise of the article that there is much correlation between amount in a savings account and ability to handle an unexpected financial crisis is silly. Many upper middle class keep hardly any money in saving acocunts. The amount kept in saving accounts has little correlation to how much liquid assets (savings) they have. I could live on my credit cards long enough to liquefy virtually any asset. Having money in a savings account when it returns virtually no interest is silly if you have other liquid assets. I have huge savings and assets but I do not pay attention to what is in my savings account (whatever it is it likely is more than should be there unless it is less than $1K).

    Does this imply that there are not some people that do not have liquid assets to cover an unexpected event? No there are people who have no liquid assets but it is a lot less than the amount of people who do not have at least $1K in a savings account. Furthermore, many people do not have the means to save as they are worse off than the author suggests (I know people who literally need more money than they make just to live because of various issues).

    I got nothing from the article except how misleading the title is (savings does not equal savings account so the author to not be misleading should have indicated savings account but then the statistic is not shocking at all and there would be little reason to read the article – which would be appropriate).

    • Prag Patel

      On the website GOBankingRates, “To gauge how well Americans are saving, GOBankingRates conducted a survey that posed the question, “How much money do you have saved in your savings account?”.

      So it does appear they specifically asked for savings account. I technically don’t even have 1000 in my savings. It’s a different story with my interest checking and brokerage accounts. Not to mention, I have never used GOBankingRates website, so how reputable are they? I have found the vast majority of these surveys and statistics paint very skewed viewpoints…

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