Who Has Enough Cash to Get Through the Coronavirus Crisis?

[Zorro]

Do you have enough money saved to weather this pandemic? If you are an American, your answer may well be no.

Even before Covid-19, many Americans were living check to check, because of the costs of housing and child care, student debt payments, medical bills and the rest. Despite the cheery insistence of people like President Trump and personal finance gurus, the economic growth of the last decade had not brought wealth or security to most Americans. Fewer than half of American adults — just 47 percent — say that they have enough emergency funds to cover three months of expenses, according to a survey conducted this month by the Pew Research Center.

In the coronavirus’s wake, those without savings may also be losing their jobs, leaving them with little to support their families other than the CARES Act relief from the government, help from charitable groups or GoFundMe or Venmo tip jar campaigns. This won’t be enough to save many families from ruin. There’s so much more this country must do to protect its people from financial hardship wrought by the pandemic.

Americans all along the income scale are feeling the pinch. Brenda Madison in Laguna Beach, Calif., says that several of her jobs, including doing graphic design and working at Athleta, have dried up. She estimates that she has made between roughly $35,000 and $100,000 per year doing various jobs over the past decade. But she and her husband, an I.T. administrator, don’t have savings accounts, she says, only retirement accounts. They are depending on her husband’s salary for now. “At least my husband still has a job,” she says. “But his company has been losing a lot of business, so I don't know what our future looks like.”

https://www.nytimes.com/interactive/2020/04/23/opinion/emergency-savings-coronavirus.html

[spinbaby]

1. Yes

But I’m retired and living off Social Security and my IRA.

[milestogo]

2. I was furloughed from my job yesterday.

Supposedly you get $600 a week in addition to the UI. If I get that I will be in good shape till I can go back to work again.

[cbdo2007]

3. Hoping this is a wake-up call to many people to get their financial selves in order

and analyze spending needs over wants.

Yes, fair wages is part of the problem as are lack of financial education, debt awareness, prioritizing needs over wants, etc.

[FirstLight]

4. nope.... it's not that easy when literally living hand-to-mouth

Savings is not an option for those of us who are in that situation. Needs are always first, and wants and needs are often the same thing. If I am struggling and get a little extra like $50 child support, yes, I am going to treat my kids to a pizza night because we have been living on mac n cheese for a week... needs and wants are a whole different bag when you are this poor.

It isn't so cut & dried, and it is insulting to those who struggle to imply that the reason we dont have savings is because we spend irresponsibly

[Blue_true]

10. Good points. Below a certain income level, wants and needs are indistinguishable.

Once a person is above that level choices can be made. Some people that are living paycheck to paycheck simply have no flexibility to build up savings, others do.

You are right to give your kids a reward when you can afford it. I grew up really poor and the thing I remember fondly now is special food like homemade hamburgers or hotdogs with all the trimmings on Fridays, or cheap icecream in cones on Wednesday nights. My parents didn't have good educations and had really poor paying jobs, but they recognized the inherent benefits of treating us when they could.

[FirstLight]

18. My teen daughter was reminiscing on little things like that just the other day

she remembered that like once every few weeks (probably on a payday) we'd get McFlurries at mcd drive thru after school...

little rituals mean everything, and some dont cost much

[Marrah_Goodman]

22. I remember saying something like that when my kids were young

Someone was griping about snacks or treats being in someone's cart and they paid in food stamps. I said... when you have zero money to spend on extras or entertainment for the kids, when the food stamps come out and you've been living on spaghetti for the last week of the month......yes, you are going to get them something to make them smile.

Even now, when my SNAP comes in I get myself a couple treats.

"needs and wants are a whole different bag when you are this poor." Right on! No one who hasn't been there really gets it.

[cbdo2007]

24. As with everything, my comment was not a one-size-fits-all response.

I agree there are many, many people in your situation who don't have that option.

There are also many, many people who have well paying jobs and also have boats and tons of debt and their kids have to have the latest gadgets or they moved straight out of their parents house when they graduated high school and want their independence...or myriad other reasons, who are irresponsible and could be in better shape when the economy plummets.

The wasn't assuming the OP applied to poor people but to those who just haven't planned for emergencies but would otherwise have the means.

Sorry to offend!

[HarlanPepper]

7. This is true in so many cases

My wife and I know several couples who make $150k plus who live paycheck to paycheck and have little or no actual savings they can access.

This is because of bad financial decisions including expensive vehicles, homes and high levels of credit card debt. And this is in a flyover state with a low cost of living as well, not Manhattan where the expense of shelter can eat up 35-45 percent of someone’s income.

[nini]

13. I just barely got on track after the 2009 crash

So yea.. it's not always that easy to stay on top of things.

I agree with you in theory but sometimes it's not always possible to not fall into debt when you're just trying to survive.

[kcr]

26. Americans "needing a wake up call" wasn't the problem.

Out of touch.

[MissB]

5. Wait. Isn't that $1200 supposed to last us for 10 weeks?

That’s what Mnunchkin implied.

Yeah, depressions are pretty awful for most socioeconomic classes. If we are in one for a good period of time, only the actual rich will come out okay. Even the upper middle class will suffer. I shudder to think of how this hits the poor (working or not).



(Yes, I have a healthy emergency fund. I’m fortunate.)

[totodeinhere]

6. I have enough cash to make it indefinitely. And I have shifted some of my portfolio to gold futures

just to be on the safe side. I think that now is the time to take defensive measures in case the markets continue to tank. Plus I do not trust Trump and the Republicans to manage this very well. They have a terrible track record when it comes to managing the economy. The job growth we had been experiencing was the result of President Obama's policies and Trump was just riding on President Obama's coattails.

[dameatball]

8. These days I am fine. Back years ago when raising small children things were not so fine. It is

definitely a scary time, especially for those less fortunate. Our phony economy has become evident.

[Runningdawg]

9. As long as we have health insurance we will make it. If we lose that, all bets are off.

[EllieBC]

11. American in Canada and no.

My Canadian husband is still employed but his hours are cut. Therefore he doesn't qualify for the CERB. We are effectively screwed.

[Bettie]

12. My husband is essential

fixes hospital sterilization equipment. So, he's still working. We're incredibly privileged to know that we can stay here and be financially OK. I'm an at-home mom.

The husband is the only member of the household who goes anywhere, though sometimes I ride along on errands, just to be out of the house, though I stay in the car.

[Victor_c3]

14. I've never felt so fortunate to be collecting disability benefits

I have little savings, but I get more than enough each month to support myself and my two children from my sources of disability income.

[Happy Hoosier]

15. I am furloughed right now....

But my wife is still getting paid until the end of May. She's a college professor and she is not paid over the summer.

I have been approved for unemployment, but no payments yet.

Because of usual income, we did not get any CARES bucks.

Almost all our savings are tied up in the house, retirement, or my daughter's college fund (she graduates high school this year, poor kid).

CARES would allow a loan, without penalty, from my retirement, so if things get rough, we'll go that route. Once I am back to work, I can pay back that back to myself fairly comfortably. Not touching the girls college fund, even if I have to each dog food.

[Chainfire]

16. The Op's question

has not made an estimate as to how long the crisis will last. It is a critical factor.

For my wife and I, we are living off of money we made long ago, so we have a stable income that we calculated would last until we died a natural death at an average age. We chose to invest our savings and retirement funds in low return, fixed-rate investments rather than going for broke in the markets. At this point in time, we are still adding to a savings account, not drawing it down. The virus does not effect us too much as long as the government keeps the SS benefits intact, and our savings aren't destroyed by inflation. The thing I worry about most is hyper inflation.

If we get a second disastrous wave of virus, brought about by prematurely forcing opening the economy, then all bets may be off. It may drive the nation into such chaos that recovery could take decades, and then the recovery may not resemble the pre-pandemic nation.

Of course, if Trump is reelected and finishes consolidating his power there will be no security, physical or economic, for anyone that is not already very wealthy. You can't depend on anything as long as a mad-man is the head of government.

[BillyBobBrilliant]

17. I will be okay.

I am deemed an essential worker at a Health Science Center (I do not encounter patients). I go to work every day, get screened for fever and wear a mask...try not to touch anything, wash and sanitize my hands as often as I can. If I get a check, I will use it to reduce some of my debt. A few of my neighbors are not as fortunate, and I have sympathy for them. Some have moved out...the parking lot is getting less full. If this would have happened 6 years ago, I would be dead, or dying because I am a triple high risk individual.

[GreenPartyVoter]

19. I'm ok until my school year contract runs out this summer. Hubby is a computer tech, so

still working, but my paycheck covers the mortgage. Kids are college-age dependents, so no money from the stimulus to them directly or to us. Hubby and I each got our $1200, so that can be groceries and utilities if things go really south, and we’ bump back a house payment to stretch it a month further. And younger son has a couple hundred he said we can use if we need it.

No idea what school will look like this fall. I may not be needed in one. There’s always the grocery stores, though.

[Marrah_Goodman]

20. I've been living on very little each month for a couple years now

Just below the federal poverty line, but at least I have that. Surviving on 1000 bucks a month in southern new england take a great bit of frugality and going with out. The upside is that besides extra cleaning supplies nothing has changed for me besides an extra 40 bucks in SNAP that I was wicked happy about.

[SlimJimmy]

21. We've had enough to cover 3 months for years

It's been an important part of our finances. Even back when I made crap for money, I saved 10% of it as a safety valve. I'm glad I did that now.

[Doreen]

23. I do not have enough to budget a savings.

As long as my SSDI keeps coming in I will survive as always but if that is cut drastically or just cut I am so so screwed.

I feel more for those who have children if that happenes.

[AwakeAtLast]

25. Yes - but

It has taken years of hard work: no credit card, buying only with cash and going without. A lot.

We also downsized our house and moved closer to family two years ago, with the goal of being mortgage free in two years. We saw the writing on the wall with Trump's election. I don't think we forsaw THIS, but we have said many times how grateful we are to be here and in decent shape.