Why do so many people have no savings?

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Look, anybody can tell you that it’s simple mathematics for savings.

I can count for you and tell you that if somebody saves a hundred dollars a month, that’s going to be $1,200 a year.

This isn’t reality, life doesn’t work in linear fashion.

Here are some things I learned when I was really poor, going to high school, and my mom was raising two kids on her own:

Your car gets used a lot. If you are lucky, it doesn’t need repairs. Our Honda Accord needed the entire transmission replaced. Twice. We didn’t have money for another car. That expense was about $1,500. Each time. That wiped away any money my mom had. In fact, it wiped away some of her 401(k).

Poor people don’t save because they’re already at threshold when rent is due. Our rent in 2008 was about $750 a month. Our landlord was a nice person, and he let my mom pay a little late sometimes. My mom was making about $1,200 a month back then. If you do the math, you’ll realize when you add gasoline, insurance, groceries, utilities, internet, and a cheap cell-phone plan, there is nearly nothing left.

Insurance is a privilege. Even so, you still need to pay. You might think that everybody gets similar insurance, but they don’t. You have an accident and break your arm? America is about private healthcare, which means if your insurance is cheap, the deductible is high. You’re going to be on the hook for whatever that cast and doctor is going to cost.

Emergency. In a perfect world I suppose nothing goes wrong. Stuff happens everyday that is off-script. At least that’s how it works in the real world. My mom is human. She would get sick sometimes. Maybe the employer doesn’t want to pay? What if the school needs money for something and I don’t have money for it? What happens when I start applying to colleges? Am I ever going to drive? I need to immediately look for a job after high school.

The world is no better at saving money. Look at the U.S. government and you’ll see it runs a deficit equal to 1/20th the United States GDP, every year. That’s on a good year, too. This year, it will be much closer to 1/4 of our GDP.

The government doesn’t know how to save. It keeps spending on defense when we have the capability to blow the world up a thousand times over. Does this sound like an investment plan to anybody?

Let’s be real, almost every study reports that nearly 80% of households live paycheck to paycheck. This isn’t because the poor are buying coffee from Starbucks for $4 each day.

If your make or break in life is choosing whether or not you can have a coffee, it’s not the coffee that is making you poor. You are in serious financial hardship. Most people in this country are in serious financial hardship.

The Coalition for the Homeless report that 40 to 60 percent of the homeless population float between full-time and part-time work. Wrap your mind around that for a second.

In 2009, the American Journal of Public Health released a study that said 45,000 deaths annually are linked to lack of health care coverage. Are we really going to argue that people who can’t afford basic healthcare deserve to die? Because they can’t save? It’s not a problem of savings, it’s a problem of priority. Healthcare isn’t a privilege, it’s a right.

These aren’t people looking for hand-outs. These are people who would probably rather have some food and shelter and quality of life over a wall bordering Mexico.

Yes, some people can save a bit more money. For those making over $100,000 a year, it is a possibility. Even in Los Angeles, that’s possible.

But the median household income in 2018 was $61,937. Household income. Not individual income. There is an average of 2.63 people per household.

Average debt is going up.

School debt is going up.

However, if big businesses, like banks, can’t figure out a way to save money appropriately and have the ability to cause a global economic meltdown, they get bailed out with the money from the masses in the form of taxes.

But if those masses have trouble saving, then, for some reason, they’re straight out of luck.

It’s like logic only works as your agenda renders it fit.

People can’t save because for too long the system they’ve been living in provides welfare to those who have rather than generating opportunities for those who don’t.

Leverage is a powerful financial gift in this world. In smart hands, it has the ability to generate money for business owners and communities alike. In the hands of bankers, that leverage is not only powerful, but in infinite supply. If you leveraged your home with a mortgage, the bank won’t shy away from taking the house back when you fall away from your payments.

However, if you’re a big bank and you cause a multi-trillion dollar economic meltdown, you get free taxpayer money and a golden parachute.

Written by

UC Berkeley, mathematics. Los Angeles. Long-time runner. Top writer on Quora, 100M+ total content views. New to Medium. Inquiries: Moumj@berkeley.edu

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