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by fady
3121 days ago
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A lot our missing the point. 100k/year is good but it takes just one major expense for that to set you back, put you in the hole, and usually leads to more interest, fees and spirals out of control. "The report, put out by Pew Charitable Trust, includes the results of surveys conducted in 2014 and 2015 to see how Americans were coping with what are referred to as financial shocks—those one-off expenses that crop up from time to time. Pew found that in large part, Americans’ ability to weather financial shocks is partially dependent on something that Americans still struggle to accumulate: savings."
https://www.theatlantic.com/business/archive/2017/04/savings... |
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It really should not, if you've budgeted conservatively in the way that our grandparents generation did. For example, if you don't have 3-6 months of expenses in a savings account, short term disability insurance, long term disability insurance, and a term life insurance policy of 10x your annual salary, you're living a fairly high risk financial lifestyle. Again, if you budgeted the way your grandparents did you wouldn't have any debt except MAYBE your house, so a financial setback would almost certainly not result in more interest or fees, since you wouldn't be paying any interest to begin with.
You've accepted this false narrative that the banks have sold you on that being perpetually indebted to them is normal. It's not, from a historical standpoint. And you don't have to live that way.