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Comment by delish | Hacker News Reader

I don't know the source for the above stat, but for another frequently-mentioned one, "40% of Americans can't cover a $400 unexpected expense" it looks like the fed accounted for that:

>When faced with a hypothetical expense of $400, 63 percent of all adults in 2022 said they would have covered it exclusively using cash, savings, or a credit card paid off at the next statement (referred to, altogether, as “cash or its equivalent”). The remainder said they would have paid by borrowing or selling something, or said they would not have been able to cover the expense.

https://www.federalreserve.gov/publications/files/2022-repor...

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That 37% makes sense in that is roughly the percentage of the population where ordinary expenditures match income (per BLS). This has some elasticity though, since the scope of "ordinary" is much larger than "necessary" e.g. spending on luxury cars, food, clothes, etc is included as an ordinary expense even if it is profligate, so there is a latent surplus that is available and people do adjust their ordinary spending when necessary.

Per another Federal Reserve study I saw, the percentage of the population where income does not exceed necessary expenditures -- people with no income surplus, latent or otherwise -- is something like 12%. Which sounds about right and is still a lot of people.

Thanks for the link. Interesting that in the same report they have this snippet on the next page:

...the 2022 SHED included a new question asking what is the largest emergency expense people could handle using only savings. Sixty-eight percent of adults said they could pay an expense of at least $500 using only their current savings (table 12). This is a somewhat larger share than the 63 percent of adults who said they would pay an unexpected $400 expense with cash or the equivalent, suggesting that some people do choose to pay with other methods, even if they have cash savings available to them.

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