this post was submitted on 13 Aug 2024

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Survey: Almost 50% of Americans Consider Themselves ‘Broke’ (www.marketwatch.com)

submitted 3 months ago by return2ozma@lemmy.world to c/personalfinance@lemmy.ml

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[+] iamdisillusioned@lemmy.world -7 points 3 months ago (1 children)

Because this is a forum where people share perspectives. If you don't want to hear them then don't read the comments.

[–] otp@sh.itjust.works 3 points 3 months ago (1 children)

Lol. You wrote a comment in reply to another comment. Usually replies are for responding to what the preceding comment said. Perspectives that follow the preceding perspectives.

If you want to say something about things that nobody has said, you can just make a new post.

[–] folaht@lemmy.ml 1 points 3 months ago* (last edited 3 months ago) (1 children)

The original post is that 50% of Americans consider themselves 'broke'.
@sugar_in_your_tea@sh.itjust.works a solution that would be considerate if 0.1% of working class Americans considered themselves broke.
@iamdisillusioned@lemmy.world offers an analysis why a 'pull yourself together' solution doesn't work when the issue starts hitting 50+% of a nation. That means there's something systemically going wrong and any suggested 'pull yourself by the bootstraps' solution is going to be met with more and more anger from a larger and larger crowd.

[–] sugar_in_your_tea@sh.itjust.works 1 points 3 months ago* (last edited 3 months ago) (1 children)

That's a bit reductionist.

A large chunk of the US fritter away their money on interest, and that's precisely the type of problem that can be solved with careful budgeting. Here's a report by Forbes about debt, and I'll highlight this section on credit card debt:

Credit Card debt details

In 2022, 48% of all credit card users carried a balance at least once based on Federal Reserve data. While families with higher income levels were less likely to report revolving a balance, the proportion of cardholders was substantial across all income levels.

According to a Forbes Advisor survey from December 2023, 22% of credit cardholders are either somewhat or very unconfident they can pay their next credit card bill in full.

And some more details from a Federal Reserve report (referenced by the above section), which states that 37% of families making $100k or more carried a balance. That income is well above the level most claim to need to feel financially secure. That doesn't mean a $100k salary is insufficient, it means there's more to the discussion than just income.

Personal anecdote about staying debt free in school

My parents helped me with school tuition, but I paid my own rent, food, transportation, etc while making around minimum wage (first job was $0.50 over min wage, second was $2 over). I know it's possible to live debt free on pretty much any income, provided work is steady, because I've done it. Student loan repayments are capped at 10% of discretionary income in the US (so after taxes), with 20% being the worst case (it varies by program). So I don't think student loans are the main issue either.

Examples of spending problems

I don't know if careful budgeting can fix all of the problems the 50% quoted in the article have, but it can certainly help with a lot of them, if not most. Issues vary, but a large percentage of problems aren't income problems, but spending problems, such as:

gambling - how many "play the market" and lose? Teaching people to buy and hold should reduce the "broke" feeling from investment losses
keeping up with the Joneses - you don't really need that flagship phone with unlimited data with a half dozen subscriptions, nor do you need a new car (the newest car I've ever had was 8yo when I bought it and I paid cash)
eating out - this article claims ~30% of people 130% FPL or lower eat out at fast food on a given day, and it skews toward young people (so not the household w/ 4 kids living in poverty)

My point here is that a very large chunk of that 50% could be much more financially stable by making a few behavioral changes. However, it's a lot easier to claim to be a victim than to make those changes, so that's why these types of articles get a lot of traction and comments are largely unconstructive.

If you actually want to change your financial trajectory, talking about it can help. Making a post here detailing your income, expenses, debts, etc is one way to do that. A budget isn't going to help someone living on the streets suddenly afford an apartment, but if you have a steady job, there's a really good chance that a reasonable budget can end the paycheck to paycheck cycle. And I'm guessing a very large chunk of that 50% in the article would fall into this category.

[–] folaht@lemmy.ml 0 points 3 months ago* (last edited 3 weeks ago) (1 children)

Explain how it is reductionist to say that when there's over 50% of a whole nation that's in financial woes?
If anything trying to blame the each individual's actions is reductionist.
It paralyzes any political discussion in order to uphold an ever fragile status quo.
How many more people in your own country need to into debt before
you start calling it a systemic issue? 80%? 90%? 99%? 99.9%? 99.99%?

Whatever your solution is going to be, people's incomes are going to go down,
as everything is being automated.
Grocery stores are being automated.
Fast food chains are being automated.
Any brick-and-mortar store is disappearing.
Artists are being replaced

Your personal anecdote is worthless.
I delivered magazines, newspapers and mowed lawns when I was a kid.
Good luck telling the Gen Z that!

And if you don't understand why, I'll try be as reductionist as possible
in how my (and your) personal anecdote doesn't work anymore:

Internet, AI & robots has set up the us the bomb
All your income are belong to FAANG!!
You have no chance to survive make your time
Move Cap Install Com
For great justice!

[–] sugar_in_your_tea@sh.itjust.works 1 points 3 months ago

over 50% of a whole nation that’s in financial woes?

This is self-reported data, so there's no consistent definition of what "broke" means. It could mean anything from "I literally can't afford food" to "I'm stressed about my finances," and the causes are as diverse as the definitions of "broke." The Fed reports that 77% are at least doing "okay" financially, so that's a pretty big disconnect. On the Expenses side, 82% of people are able to pay the current month's expenses, and that's consistent across all income levels until we get to the <$25k/year level, which is 67% ($25k is $12.50/hr).

So I'm going to cite some other sources to hopefully get more information about it. Here's another survey by PennyHoarder about budgeting, and some takeaways:

people who track spending have less credit card debt
people who make $25-50k are less likely to keep a budget - i.e. the people who probably need to keep a budget the most
1 in 5 have splurged on an expense, which caused them to struggle with bills
1 in 4 have hidden an expense from a significant other

And here's another that discusses how Americans overspend their budgets.

When I look at this data, it seems there's a lot of people who could benefit from more transparency in their finances. I don't see a systemic issue where half of the population is drowning in debt, what I see is a large chunk of the population who need better financial education.

people’s incomes are going to go down, as everything is being automated.

That's not a given. Technological advances tend to increase wages, the main issue is churn in the labor market as people adjust to the new opportunities the new tech has created.

I see this automation as a good thing. Yes, it sucks for people in the short-term whose jobs get replaced, but if there's something the market is good at, it's adapting to changes in labor supply. Sometimes there's sustained unemployment, but that's rare and often due to protectionist policies (e.g. I blame the Great Depression on Hoover's tariffs). If we truly can't compete with bots, we can always tax capital from bots and provide something like Universal Basic Income (my preference is Negative Income Tax, which is the same thing, but with income caps for benefits).

I delivered magazines, newspapers and mowed lawns when I was a kid. Good luck telling the Gen Z that!

What are you talking about? I literally just paid a neighborhood kid to mow my lawn yesterday.

Delivering magazines and newspapers was a very uncommon job even at its heyday (my brother did it in the 90s, but that's the only kid I heard of doing it), whereas mowing laws and other small jobs are still about as common as it was in the past.

But I'm not sure why you're referencing Gen Z, Gen Z will be in their 20s already, so they wouldn't be interested in those neighborhood jobs, unless they make it a business (and two families in my neighborhood run small landscaping businesses, and I see landscaping trucks every day in my city).

If someone wants to hustle for a little more money, there are a lot of options:

"gig" work - Uber, Doordash, etc; just be careful you're actually making enough to justify wear and tear on the car
exploiting banking bonuses - credit cards, checking accounts, etc (can be thousands per year)
dumping - buy a box truck and slap a sign on it for dumping services - in my area, that's usually $50/hr; or pass around flyers and rent a truck instead so you don't need to buy one
substitute teaching - my state only requires a high school diploma, but the pay kinda sucks (like <$20/hr for single day jobs, no guarantees for jobs every day); take a day off from your other job to do substitute teaching for some extra cash

These kinds of service jobs won't be replaced by robots anytime soon, and that's extra true for the trades (e.g. plumbers, electricians, etc) where there are generally strict codes and licensing requirements. If you decide not to go to post-secondary education, you have lots of options for consistent or inconsistent work, depending on what you're looking for.

I think there should be some policy changes (i.e. I'm a fan of NIT/UBI as mentioned), but the real problem is the same problem that we've had for pretty much forever: people really like blaming others for their problems. If you want help, there are a lot of opportunities out there, they just require work to go out and get. It's a lot easier to whine and blame the issues on "capitalism" or "political party of choice," but honestly, the average person is way better off today than pretty much any point in history, yet we seem to complain way more.