Comment by losvedir | Hacker News Reader

Comment by losvedir | Hacker News Reader

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I really doubt this. It just doesn't pass the smell test to me. You see people living paycheck to paycheck at many different incomes. If someone in a given location in situation is living paycheck to paycheck at $10/hr and someone else is doing the same at $12/hr, guess what? The latter person could have accumulated an emergency fund of $4,000 in a year.

No doubt there are people in real poverty, and no doubt some people get struck by a medical emergency, but there's just no way three quarters of Americans are in that situation. I'm old enough that I've seen way too many people living paycheck to paycheck that absolutely shouldn't be.

I think this article is 100% on point and clicked through to the services it was mentioning because it resonated so much with me. I was taught to save a percentage of my paycheck no matter what it was, which I began right out of college when I was making $28k/yr in Boston, and so I'm in a pretty great position now, but the article is right that it's hard and often confusing, and I would love for there to be a service that helps me along in this process.

> I was taught to save a percentage of my paycheck no matter what it was

This is part of the lottery. You were very fortunate to have been raised such that you are familiar with the ways in which money can work for you. Being born into a situation where this isn't the case is already a huge detriment, not to speak of actual hardships once you're on your way. It's not a stretch to think that even half of those people in paycheck-to-paycheck lifestyles are this way.

> but there's just no way three quarters of Americans are in that situation

There is. Medical emergencies, as a contained example, are not isolated incidents -- when they affect caregivers, the whole next generation (or two! or more!) can be affected so heavily that the family essentially loses all their wealth in the span of a few years. More broadly, the community steps up to help out those in need, but often those in need are already in communities of need. One chink in the armor can drag down a whole network of people, and the strength of that can be unexpectedly high. If government welfare was more comprehensive and less difficult for poverty-stricken people to access (see: means testing and the time sink of waiting in lines), this would not be nearly as much of an issue. The "free market" sucks people dry if and when it gets the chance.

As an aside, the attitude of GP is very common for people with only one or a couple dependents, or else a solid support network, and no experience of ever being without a safety net. It really is terrifying to be poor, and this further exacerbates the issues when you are forced to make consequential decisions under that constant low-burning stress response.

Another lottery, in healthcare, is simply how much you know about human biology. Most people are remarkably ignorant, and fall for all sorts of “wellness” schemes, not continuously, but from time. But this peanuts: it supports the scam wellness industry. But what about when you’re really in trouble? Then you’re at the mercy of insurance companies and a particularly small group of doctors (and if hospitalized, nurses) who you may or may not have much of a say in choosing. Medical care anywhere is self-triaged. By that I mean your level of education and relative wealth greatly influence your quality of care, even if you have insurance or Medicare. Sophisticated people can game the system, using knowledge and research, getting superior care than ignorant people with the same nominal coverage get.

> This is part of the lottery. You were very fortunate to have been raised such that you are familiar with the ways in which money can work for you. Being born into a situation where this isn't the case is already a huge detriment, not to speak of actual hardships once you're on your way.

Well, sure, but that's exactly the point of this post: that it's about education and knowing what to do. I agree! I was lucky to have learned when I was young, and lots of those 78% are people who just don't know how to budget and save.

I was responding to a comment that I understood meant people couldn't save due to the economy and such that it's impossible to accumulate savings. No! It's an education issue.

The lottery is in everything. The fact that you were able to save money at 28k/year income. The fact that you were able to go to MIT. Education helps, but its not the entire influence and there is luck in education...

Your math is off.

The difference between $10/hr and $12/hr isn't $2. It's less because of taxes.

It comes out to roughly $2900 gross.

You also figure that if you're living paycheck to paycheck then you've met all of your needs. That's not necessarily true. The person making $10/hr could be skipping meals to last through the pay period.

They could also be skipping on preventative healthcare. Or some other thing.

And it also matters when you were making that $28K/yr. A dollar today is worth less than a dollar yesterday.

Exactly.

Talking about a large cash emergency fund seems to me like a suggestion handed down from 50+ years ago. Why wouldn't a middle-income American these days just keep a minimum of ~$500-$1K in a checking account to prevent overdrafts and use a credit card if something unexpected happen? Over time, if you have a steady job in the $40-60K range, you can build up credit to the point where you have access to more than a year's income just via credit cards.

Is this "paycheck to paycheck" or not? If you have >$4K in checking at some times in a month, because you just got paid and you haven't paid your credit card bill, that's not technically an emergency fund, right?

I endorse your point that since there are people at all income levels who spend all their income, there's an inductive argument that nearly everyone can save.

Maybe we can have someone from the credit card companies chime in with their thoughts. From my experience, I was shocked to hear cashiers at Walmart going to the Bahamas and staying at 4 star hotels, while I stayed on couch of an Airbnb that I split with my ibank and tech friends.

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