Government Shutdown Reveals Nasty Truth About Americans’ Savings
The temporarily-ended government shutdown didn’t have had a large effect on the U.S. economy, but it may have revealed something disturbing about the savings of 80% of Americans.
They aren’t prepared if the economy get worse.
MarketWatch published some recent findings in an op-ed (emphasis ours):
Why do a few weeks without pay turn into a crisis for many families? Simple: Nearly 80% of Americans live paycheck to paycheck. That’s a problem when you have little to no savings. In fact, it’s akin to playing financial Russian roulette.
And the problem is terrifyingly pervasive. According to a recent GoBankingRates survey, only 21% of Americans have more than $10,000 in savings, with nearly 60% having less than $1,000 in savings.
The findings come from a recent GoBankingRates survey, which contained the following chart reflecting MarketWatch’s findings:
With interest rates on the rise and the economy at levels of uncertainty not seen since 2008, it’s crucial for Americans to buffer their income with some sort of hedge.
Without reliable “go-to” savings and a plan, there could be tough times ahead if the market continues diving into recession.
But the nasty truth appears to be most Americans don’t have enough savings, if any at all, to get them through the tough times.
Right now, government-reported unemployment is the lowest it’s been since 2000. But as you can see from the chart below, a recession tends to follow the “lowest” unemployment rates:
It’s not for sure that this is a signal of an imminent recession, but it sure seems like enough circumstantial evidence to consider looking into your savings options. That, and the fact that the shutdown has only been “ended” until February 15. After that, we may see “Part II.”
And the shutdown isn’t only affecting individuals. It even drew the attention of top CEOs.
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