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Swimmer963 comments on Be Happier - Less Wrong
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I guess you somehow still had enough money to fulfil the couple bottom layers of Maslow's hierarchy of needs without much trouble, didn't you?
Wouldn't most people have enough savings to last 8 months? I'm still in university and I have enough savings to live at my current standard (~$1000/month expenses not including tuition) to live for...hmm, almost 2 years if I'm not in school and paying tuition during that time.
Then again, I guess lifestyle expenses rise along with income after most people graduate, and they might rise faster.
I was under the impression most people in America are in massive debt and have very little savings.
WHYYYYY??????
Because credit card companies are financially disincentivized to send cards with instructions reading "How To Use Your Credit Card: Borrow our money for free by purchasing things you can afford and paying down your full balance on time, every time, leaving us to profit solely from merchant fees."
Among other causes.
We get to empirically test this assertion, because the new credit card regulations of the last few years have much more detail about the benefits of paying in full, on time.
If they're long, complicated, and/or in fine print, I don't think that's a test of my assertion.
The first page of the credit card bill now says how much it will cost in interest if you pay only the minimum, or only pay the minimum amount necessary to eventually pay off the debt (along with when that pay off would occur).
It's fairly transparent. Which isn't to say that it overcomes (or attempts to overcome) cognitive biases people have about the relative size of different numbers. But it isn't hiding the ball.
Fair enough; I haven't seen one personally (I have a credit card but don't use it much and I think it would send the bills to an old address still if I did) but I'll call it at least a partial test of the assertion on your say-so.
Personally, because of student loans, mortgage (which doesn't really count), and trying to keep up an extravagant standard of living during lean years, justified in part by expectation of making insane amounts of money in the future.
At this point, I have no savings because I'm in debt. I don't have any expectation that I won't be able to come up with however much money I might have saved in the case of an emergency, so the best use of my excess now is to pay off the debt, since interest rates are not in the favor of savings.
I don't know if this was meant to be serious or funny, but I upvoted because it made my laugh. :D
I've heard the same, but I'm kind of skeptical -- I haven't actually researched it, but the factoid usually seems to come up when someone's trying to push a narrative, which tends to be a warning sign.
In particular, if mortgages and automotive debt are being counted, then most adults before retirement age might look pretty indebted on paper without that necessarily destroying their medium-term ability to stay solvent. On the other hand, standard financial advice seems to be to maintain six to twelve months' worth of savings, which suggests to me that most people don't.
I'd like to remind everyone here that “most people” make less than $851 a year.
Excellent point. Funny how brains tend to automatically edit that out, and claim "well, isn't it obvious I was talking about North America/Europe."
(I'm not completely sure most people -- or even most unemployed adults -- in North America/Europe have enough savings to last 8 months, either.)