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by jsdalton
5501 days ago
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What interested me was the cross-cultural comparison, which is only alluded to in the CNN article but explained a bit more in depth here: http://blogs.wsj.com/economics/2011/05/23/nearly-half-of-ame... > Meanwhile, Lusardi, Schneider and Tufano also looked at how different countries compare. They consulted with local partners to set the number used in local currency at a comparable level. “Perceived capacity to cope with an emergency is lowest in the U.S., U.K. and Germany, all countries in which 50% of households or more would probably or certainly be unable to come up with the emergency funds,” the authors wrote. “France and Portugal occupy an intermediate position; 46% of respondents in Portugal would certainly or probably be unable to come up with the funds as would 37% of those in France. The highest levels of coping capacity are found in Canada (28% certainly or probably unable), Netherlands (27.9%), and Italy (20%).” |
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My impression is that it's just far less dangerous (and so a lot more compelling?) to go without an emergency budget here in Germany, so I wonder if this comparison misses to include the risks involved?
Sure, if you have family and a good deal of property/a mortgage to pay, you've got a lot of incentives to stay in business. But if you're renting? Already living in the lower middle class? No kids?
Worst case scenario: You lose your job (2-4 weeks notice) and are bankrupt at the end of the month. You can apply for help from the state (unless you find something else). You'll get a (60%? No idea, but something like that) percentage of your last salary for a while, afterwards you end up on a different and quite a lot lower benefit level, but you'll most certainly keep a TV, keep a (reasonable) flat, get good healthcare. If you do have kids you get (a bit) more money, education is mostly free for them.
I don't want to claim that it's all roses, but this is the worst that you actually need to worry about in my very humble opinion. What would happen in the UK or US if you run out of cash completely?