A harsh truth is making the rounds in the wake of the nation’s longest government shutdown. Many Americans are one paycheck away from disaster, and it’s a more prolific problem than you might think. The rate and ability of America’s middle-class to tuck money away for unforeseen financial burdens is a silent crisis.
The Savings Rate of the American Family
A study done by GOBankingRates one day before the beginning of the shutdown found a shocking statistic about how much money the average family has in their savings account. The survey found that 58% of adults had less than $1,000 invested into their savings account. This same survey found that 32% of adults did not have a savings account at all.
That’s 90% of American adults within 1 paycheck of financial apocalypse.
This is a scary statistic, especially when taking into account the number of jobs that had their payrolls frozen during the shutdown. Over 800,000 federal employees went without pay during that 35-day period, and without proper savings in their savings accounts, they were forced to rely only on bare essentials, or as Commerce Secretary Wilbur Ross suggested, go get a loan.
Destroying the Millennial Stereotype
One of the most common stereotypes that millennial’s face is that they are not good with money. However, the government shutdown proved that is mainly the older generations that are dealing with improper savings. More specifically, Generation X.
The aforementioned study found that the percentage of millennial’s who had no savings whatsoever are only 26%. Meanwhile, 37% of younger members of Generation X (ages 35 to 44) were found to have no money in their savings account. 62% of older Generation Xers (ages 45 to 54) have no money in their savings accounts, according to the study.
Americans need to focus more on their savings. Post-9/11 America has focused heavily on image and pride, although that isn’t a necessarily new trend. Why would anyone have to worry about going broke in such an incredible country?
There are a host of reasons why many Americans find saving money to be near impossible. Everything from medical debt and student loans, predatory credit cards and the instant accessibility of online retailers. One of the biggest reasons is simple priorities. The vanity of many Americans often eclipses the glaringly obvious need to save.
While the government shutdown seems to have missed the mark on border wall funding, it has shown people that there is room to worry in regards to their personal finance. The United States is an incredibly successful and powerful country. But, just like any country, it isn’t perfect, and factors like exploding health insurance rates and vain shopping sprees aren’t doing anyone any favors. Americans must realize this if they want to keep their bank accounts in check.