from Hacker News

It is a myth that a large share of people can’t cover a $400 emergency expense

by MagicPropmaker on 6/5/19, 10:12 PM with 35 comments

• by wilg on 6/6/19, 4:03 AM

  I somehow read this article the first time without realizing it's totally wrong.

  Here's the direct quote from the original government report [1]:

  > If faced with an unexpected expense of $400, 61 percent of adults say they would cover it with cash, savings, or a credit card paid off at the next statement—a modest improvement from the prior year. Similar to the prior year, 27 percent would borrow or sell something to pay for the expense, and 12 percent would not be able to cover the expense at all.

  That means 39% of people say they either cannot pay or must sell something or borrow for it. Representing that as "40% of Americans can't come up with $400 in an emergency" is perfectly fair in my view.

  [1] https://www.federalreserve.gov/publications/files/2018-repor...

• by loudandskittish on 6/6/19, 5:19 AM

  > You’d frequently have a coworker out of the office who can’t afford to buy a new tire. You’d frequently hear from friends and neighbors who can’t afford to fix their dishwashers.

  Ugh. The people who can't come up with $400 to cover an emergency DON'T OWN CARS! That's why you don't hear about them missing work because they couldn't afford a new tire. They take public transit, or they walk because they can't afford bus fare due to an emergency and probably don't talk about it at work due to feeling ashamed (I know, I've been there).

  Nor do they own dishwashers...this is some of the worst logic I've ever heard and the author of this article really needs to get out of his bubble. (Can't believe I wasted my last "last free article" on this nonsense.)

• by SerLava on 6/6/19, 4:12 AM

  This is splitting hairs.

  40% of Americans can't come up with $400 but luckily a majority of those know a financial institution that can come up with $400 for them.

  Anyone who does not have an emergency $400 is not going to have a great time with an unexpected $400 debt on top of whatever else their debt obligations and expenses are.

  Is it so hard to believe that we want to live in a country where pretty much everyone has four hundred measly god damned dollars.

• by ikeboy on 6/6/19, 4:23 AM

  The median household net worth is around 100k.

  If your house or whatever is worth 100k more than you owe on it, there's little meaningful sense in which you can't afford a $400 expense.

  You've got a liquidity problem, that's all.

• by rhacker on 6/6/19, 4:20 AM

  It's beyond me why two classes aren't in school today that SHOULD have been taught by ones parents:

  * Golden Rule

  * Budgeting

  (I think we know the reasons why parents don't teach this.)

• by anigbrowl on 6/5/19, 10:34 PM

  I am troubled that 12% say they couldn’t cover the $400 expense, and that 14% claim it would stop them from paying some of their other bills. But even if respondents are accurately reporting on their finances, these numbers suggest their situation is relatively uncommon.

  That's between 1/7th and 1/8th of adults responding to a survey, some of whom presumably have kids to look after. This guy seems so in love with demonstrating his statistical abilities that it's made him dismissive of ~30-35 million people with severe cash flow problems.