This is just commie bullshit. Those “Americans can’t afford a $500 emergency” studies only look to see if Americans have an extra $500 in their checking account. They don’t look at savings accounts, or CDs, or Money Market accounts, or brokerage accounts.
With high inflation you don’t want lots of money in a non interest bearing account.
You can write checks or debit most Money Market accounts. Savings can be transferred instantly. Brokerage accounts you can get at within a day. Worst case, if you need a couple of business days, you charge it an pay it back by the end of the month.
Restricting it to "checking only" is beyond dishonest.
Money market accounts require a minimum balance and have penalties for liquidation, savings has withdrawal limits, and brokerage account liquidations come with a massive loss. They all bite you in the ass for pulling out a lot of money in a pinch, otherwise checking accounts would already have all the features of them. Credit card debt is already at an all time high and credit payments are at an all time low. What percentage of people making 60k-100k do you think have 1 out of those 3 let alone 2? 30%? How many have already had to liquidate those accounts to keep up with costs going up? You have to make 12k more a year on average to match pre covid levels.
You're not wrong about it being more complicated, but we're also talking about an emergency. Getting $500 from a savings account in an emergency even if you're at monthly transaction limit is going to cost you maybe $10 in fees. The premise is "can't cover a $500 emergency," not "has $500 sitting in a non-interest bearing checking account."
FYI: Federal Regulation D's requirements were removed in 2020. Banks aren't required to limit monthly "convenience transactions" anymore. Though plenty of them still pretend it's required so they can charge fees.
brokerage account liquidations come with a massive loss
Where'd you pull that out of? They come with some tax consequences of course but where are these "massive losses" coming from? Are you counting decades of future earnings against them? If you are, leaving the $500 in checking was already a "massive loss."
I'm not trying to say people are in great financial shape. But going from that kind of question surveyed to this kind of headline would be dishonest. The honest researched would ask something like, "could you deal with a $500 emergency without incurring debt."
Yeah I've seen that in articles before. "Oh no Americans have no money in checking!" I keep very little in checking by design. It's a transactional account. Income comes in, every dollar has a place it belongs before it even shows up. I keep a bit of cash in the house.
What emergency is going to come up that it can't be covered by the cash, a charge card, or wait a couple business days? I can't think of anything.
This is just commie bullshit. Those “Americans can’t afford a $500 emergency” studies only look to see if Americans have an extra $500 in their checking account. They don’t look at savings accounts, or CDs, or Money Market accounts, or brokerage accounts.
With high inflation you don’t want lots of money in a non interest bearing account.
You mean assets that can’t be liquidated quickly in an emergency?
You can write checks or debit most Money Market accounts. Savings can be transferred instantly. Brokerage accounts you can get at within a day. Worst case, if you need a couple of business days, you charge it an pay it back by the end of the month.
Restricting it to "checking only" is beyond dishonest.
Money market accounts require a minimum balance and have penalties for liquidation, savings has withdrawal limits, and brokerage account liquidations come with a massive loss. They all bite you in the ass for pulling out a lot of money in a pinch, otherwise checking accounts would already have all the features of them. Credit card debt is already at an all time high and credit payments are at an all time low. What percentage of people making 60k-100k do you think have 1 out of those 3 let alone 2? 30%? How many have already had to liquidate those accounts to keep up with costs going up? You have to make 12k more a year on average to match pre covid levels.
You're not wrong about it being more complicated, but we're also talking about an emergency. Getting $500 from a savings account in an emergency even if you're at monthly transaction limit is going to cost you maybe $10 in fees. The premise is "can't cover a $500 emergency," not "has $500 sitting in a non-interest bearing checking account."
FYI: Federal Regulation D's requirements were removed in 2020. Banks aren't required to limit monthly "convenience transactions" anymore. Though plenty of them still pretend it's required so they can charge fees.
Where'd you pull that out of? They come with some tax consequences of course but where are these "massive losses" coming from? Are you counting decades of future earnings against them? If you are, leaving the $500 in checking was already a "massive loss."
I'm not trying to say people are in great financial shape. But going from that kind of question surveyed to this kind of headline would be dishonest. The honest researched would ask something like, "could you deal with a $500 emergency without incurring debt."
Yeah I've seen that in articles before. "Oh no Americans have no money in checking!" I keep very little in checking by design. It's a transactional account. Income comes in, every dollar has a place it belongs before it even shows up. I keep a bit of cash in the house.
What emergency is going to come up that it can't be covered by the cash, a charge card, or wait a couple business days? I can't think of anything.