Problems a Booming Economy Can’t Solve

Return to Order | 8/7/2019 | John Horvat II
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A booming economy should help people make good financial decisions since more money can be directed to other needs. That is why savings rates normally go up as the economy improves. People naturally tend to take advantage of better days especially after bad or slow times.

This is not happening now. Many Americans are spending more on consumer goods, but they are not saving their money or accumulating wealth.

Quarter - Households - Example - Emergency - Funds

Nearly a quarter of households, for example, do not have any available emergency funds according to a survey conducted by the SSRS research firm. Another third do not have any wealth or have negative wealth outside the value of their homes. There are no signs of change on the horizon.

Such facts should set off alarm bells. However, it appears most people continue their spending habits. The survey shows that most situations have changed little or even worsened despite good times. In fact, sixty-two percent of those surveyed said they were somewhat or very comfortable with their emergency savings. This comfort was shockingly shared by one in five of those who have no emergency savings. The report laments that “many families are living on a knife’s edge, yet not resolute to do anything about it.”

Statistics - Numbers - Hardships - Something - Norm

Such statistics are more than just numbers. There are always those who experience hardships and are struggling to do something about it. This does not seem to be the norm. Most prefer not to worry about their financial future. They are optimistic and believe misfortune will not visit them. Yet others believe they can rely on others to help them. They think family, friends or government will see them through troubles.

Gone are the days when everyone practiced thrift to save for rainy days. The recommended savings norm has always been to put away enough to cover at least six months...
(Excerpt) Read more at: Return to Order
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