Select Page

The following is a staff writer post from MikeS.  He is a married father of 2.  So, with the cat, he ranks number 5 in the house.  He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.

I’ll admit it, I fall for click bait all the time, especially when it comes to personal finance articles.  My latest trap came from the following article.  The headline about the real reason Americans struggle to save made me curious.  My first reaction was people can’t save because they spend beyond their means.  Was there another underlying factor I hadn’t heard of?  Turns out, no it was exactly what I thought.  There was some other interesting or scary depending upon your perspective, information from the survey conducted by the Federal Reserve.

Savings Struggles

The survey revealed that 47% of those surveyed would not be able to handle a $400 emergency expense.  That really blew my mind, that something as small as $400 would cause people to have to borrow money.  That even isn’t that big of a surprise expense.  Simple car repairs anymore seem to run in the hundreds of dollars.  Most car or homeowners insurance deductibles nowadays are at least $500, if not more.


I have had my share of emergency expenses over the years, the most serious of them being several thousand dollars.  I know firsthand the value of an emergency fund.  I am continuing to add to mine until it is a full six months of expenses.  I have a full 3 months now and I could tap other non-retirement savings for the other 3 months.  It’s no wonder that most people carry credit card debt, they can’t afford any hiccups that life might give them.

In General

The next section did not seem quite as terrifying as the emergency fund section.  Only 20% of the survey respondents said their spending exceeded their income.  Taken at face value, this does not seem too bad.  However, I would wager that there are respondents who don’t know what their spending level is, so they can’t even answer the question correctly.  Another bright note was that 63% of the respondents said they were able to save some money during the past year.  Ideally, that number should be 100%, but I guess almost two-thirds isn’t too bad.  I couldn’t imagine not saving any money in a given year.  Although I guess people do end up in situations where personal loans from family and friends become true options.  My spending would have to be wildly out of control for that to be a problem.  I tackled those problems years ago and don’t plan on every getting back to that situation ever again.

The retirement section is downright depressing.  Almost 1/3 had no retirement savings.  39% had not even given any thought to retirement planning.  I get that I am numbers oriented and that I enjoy working through calculations like retirement planning.  The nearly 40% who haven’t given it any thought, what are they hoping for, the lottery?  One of my favorite quotes is perfect for this point.  The best time to plant an oak tree is 15 years ago; the second best time is today.  Even if you haven’t started at the ideal point, the next best time is right now.


I was in this situation about 6 years ago.  At the bottom of my hole, I had virtually nothing saved for retirement.  So, I sat down and made a plan.  I have made some minor adjustments along the way, but I have made sure that I have been continually saving.  Would it have been better to have been saving since I started working at 23?  Sure it would, but I can’t go back and change history.  The other scary number in the retirement section was that 50% were either “not confident” or “slightly confident” that their retirement assets were invested in the right assets.  I don’t claim to be an investment professional; those people are much smarter than I am.  Most retirement plans have target date funds that people can utilize.  If you don’t know what you are doing, this is certainly better than blindly picking a fund.

As usual, with this kind of article, I realize I tend to be in the minority when it comes to personal finance.  I spend less than I earn and I am diligent about saving for retirement.  As I said before, this wasn’t always the case, so there is hope for everyone.  All anyone has to do is take the first step.