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Cake day: September 14th, 2024

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  • exasperation@lemm.eetoAsk Lemmy@lemmy.worldHow are you doing financially?
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    21 days ago

    I read that half of Americans couldn’t cover an unexpected $1,000 expense.

    Without borrowing or selling property, yeah. Not a lot of people have that much liquid cash laying around.

    But I wouldn’t assume that this would be some kind of economic devastation. Our whole system revolves around easy credit.

    If the unexpected expense is something that can be paid for on a credit card, that 20% interest isn’t exactly ideal but for many people it can be a simple task of buying now and paying it off over 2 or 3 months. For them, $1000 isn’t a lifestyle changing expense.

    For others, $1000 might be devastating. It might be the difference between making rent or not, and ultimately lead to eviction and maybe even homelessness.

    So liquidity is a different question from financial health or resilience, even if they’re somewhat correlated. There are other metrics out there more directly measuring financial stability or vulnerability.