Should we feel bad if people don't have emergency funds?

I've been listening to a lot of news/podcasts/reading about how a lot of people, namely, hourly workers, are in a pinch stemming from the corona virus as they don't get paid if they don't work, and don't have any type of savings.

I don't want to take a harsh tone to them, and I remain sympathetic. I one hand, I know it can be tough and everyone has some kind of circumstance, no one wants to scrap by. On the other hand, they put themselves in that situation. Basically, everything is case by case. Wanted to get others thoughts.

Comments (42)

Funniest
Mar 16, 2020

Judging by your ER background, you'll soon find out what it's like for yourself, so I wouldn't worry about others' opinions

    • 90
Mar 16, 2020

I think we have a big portion of the population that falls into this bucket. I honestly feel bad for them. There are a few bartenders out there who have always taken great care of me when I go to their bar and now they are left in a position where it is tough for them to make money.

Not everyone works in Eye Bee, Ehm N Ahhy, Treyding, or Consoleting. These are also industries that are not protected from a pandemic so in a few months you may find yourself in a similar position. Compassion is necessary in situations like these.

    • 11
Mar 16, 2020

We are all in this together. Just don't ask me for money right now.

    • 1
Most Helpful
Mar 16, 2020
ironman32:

On the other hand, they put themselves in that situation.

This is a poor assumption. (Ugh - bad pun.)

There are many reasons why someone may be struggling financially, the greatest of which is medical debt. 66.5% of US bankruptcies are from medical debt and an estimated 530,000 families declare bankruptcy every year due to illness.

It doesn't even have to be that dramatic though. 19 year olds waiting tables to put themselves through college count in that too. A single mom with a master's degree pulling a second job to put food on the table for her three kids after her husband cheated on her and left fits in that category. There are many, many people who don't have 4-6 months of emergency funds for various reasons.

Finally, to answer the title of the thread, yes, you should feel bad for other people. I'm not saying it's on you to solve the world's problems, but a baseline of empathy and human emotion are required.

    • 42
Mar 16, 2020

Thanks, that gave me a little head space. The medical debt, that's a whole different issue, crazy have people have to go through that.

I agree with your points. I think there are a lot of reasons people have financial struggles. It's kind of like when someone thinks of homeless people, one person could see them as unwilling to work, the other can see a person with severe mental sicknesses.

    • 2
Mar 16, 2020
ironman32:

Thanks, that gave me a little head space. The medical debt, that's a whole different issue, crazy have people have to go through that.

I agree with your points. I think there are a lot of reasons people have financial struggles. It's kind of like when someone thinks of homeless people, one person could see them as unwilling to work, the other can see a person with severe mental sicknesses.

And people are nuanced and complicated too. Usually the most disadvantaged are burdened by a whole host of issues, some of their own making and others put upon them, that compound on one another and cause the situations they're in.

    • 1
Mar 16, 2020

A lot of people on this site haven't experienced some pain from life. Which is interesting. Goes to show how money does really improve your quality of life. It gives people less to worry about.

Sure, some people just never get their act together and ball out at clubs and party in Ibiza despite being an assistant manager at Best Buy, sure. That's their own fault. But like noted above, there's a hell of a lot of reasons for someone to be financially unstable that are beyond their control.

I worked with a guy who filed bankruptcy after his first son was born. A lot of medical complications that weren't covered under insurance. He chose to take on the medical debt and lose his house rather than watch his newborn son die. I respect that. Tough situation to say the least.

Thankfully his son ended up alright last I heard from him.

"The three most harmful addictions are heroin, carbohydrates, and a monthly salary." - Nassim Taleb

Previously Malta Monkey

    • 1
Mar 20, 2020

530,000 families? EVERY year? Wow.

Mar 23, 2020
CuriousCharacter:

530,000 families? EVERY year? Wow.

Yep. Our healthcare system is a failure.

Mar 16, 2020

Before you callous your heart, remember that there, but for the grace of God, go I.

Controversial
Mar 16, 2020

Every once in a while I see a delivery driver, grub hub, dominoes, etc. middle aged, guy/girl who is the salt of the earth, kind as you can imagine, but is just not high IQ in anyway. I feel for those people really deeply and I hope they have strong family connections. I dont imagine these people have a lot of friends/active social life, so imagine what life is for them. Go to work and make minimum wage, find a cheap apartment, try to organize their finances as best they can, try to have a social life, try to have romance, try to not be lonely, <---- that is a lot of trying and I wish they have success, but from what I have seen, it is a lonely tough tough life. <--- ill give $9 to the obnoxious assholes as long as it get $1 to the right person.

    • 12
    • 9
Mar 16, 2020

God damn, I thought I was a massive P.O.S. Thank you for helping me put things in perspective.

    • 7
    • 1
Mar 17, 2020

I think all you guys did was read my first sentence.

    • 2
Mar 20, 2020

Did you read the comment? What makes him a POS?

Mar 17, 2020

yeah, you should feel bad for them. I understand your perspective in that in some cases it can be punishment to those that overspend (as opposed to under-earn), which might be satisfying to see as someone who is financially disciplined in anticipation of times like these. But once you look outside the 'front office finance' bubble, it should be obvious that you should feel bad for most people when they are in a tough situation as a result of economic downturn.

The vast majority of Americans do not have the earnings power or lack of financial burdens that people in our industry do. Briefly think of all the big ticket expenses you need to (or should) start saving for as soon as you can for adulthood - house, college tuition fund, retirement savings, etc. Also, for more near term liquidity needs, consider that ~70% of college students take out loans to pay for school that they have to pay for monthly, some people have to financially support family or friends, medical costs are exorbitant across the board, and think of the million other expenses you always incur but completely forget to budget for. That is a lot of expenses, especially in consideration of smaller wages.

Honestly, I sometimes feel guilty about my job when hearing about older folks go through financial hardships/experience financial constraint. I grew up in a small town where people would be in disbelief if they found out what junior bankers make - people did not drive fancy cars or vacation to exotic places, but they were surprisingly really happy and seemed to be content with life. I would hate to see any of them or any other people not get to pursue what they enjoy because of financial difficulties. I, on the other hand, can do whatever the hell I want because I fortunately found out what investment banking was and how to break into it early. I can't ever imagine getting satisfaction out of watching someone struggle for a reason as stupid as money.

    • 3
  • Analyst 1 in IB - Ind
Mar 17, 2020

not true. I had graduated from a top school in my country (ranked top business school in Africa). I had worked so hard and was top of my class. I also cofounded a startup before I graduated college.
I moved here two years ago and noone wanted to give me a job. I to accept a lower job opportunity that was basically by the hour with no benefits. i was sexually and Emotionally abused. I couldn't save for anything. To be able to take cfa I borrowed over 3,000 from my parents. At the same time, I would go out with guys bragging about making 100K a year while admitting they went to okay universities and did not work as hard.
I couldn't leave my job because I needed any money but I could never save a penny.
Be grateful to be where you are. Be grateful you got a chance and you took it. Be kind to others even if they dont make as much money, because they are trying so hard.

    • 4
Mar 17, 2020

I definitely feel bad for them. I was up from Thursday - Saturday (caffeine pills) along with two of our execs working on easing the burden/difficulties for our ~100 of our production employees that are on hourly pay.

Most of them aren't poor through any fault of their own, and work just as hard as middle class/upper middle class people I know.

Are there some irresponsible people taking a ton of vacations while knee deep in debt when they should building a buffer?

Yes...but they aren't any worse than the middle class/upper middle class...who are way more entitled than anyone.

Also a lot of these people come from severely broken homes which makes life exponentially more difficult. Or they have physical health problems that are made worse by working manual labor jobs and they have never had the opportunity to do anything else.

Either way, I think if you're lucky enough to be in a "good" position in life, then there's no reason not to try and help others. It's just lazy.

Mar 17, 2020
  1. We all spend in good times when we should be making sure we're putting away
  2. The value of saving is pretty much the last thing America wants to teach its citizens, and a board of people in the finance industry are as much a part of that as anyone
  3. Pricing has a lot to do with how much people are willing to save; as the expected lifestyle continues to go up, wages do not rise fast enough to make people feel wealthy enough to keep a little extra, which I think more people would feel inclined if they had it
    • 2
Mar 17, 2020

I would be interested to see how much social media also influences savings. In college there were numerous people around me who took a vacation because "everyone's going to this EDM concert/ vacation spot/ club/ restaurant" etc. Bank tellers and lead baristas would hit up Nobu. It was weird. How many #influencers influence people to overspend all the time? This detox kit will make sure you're not fat, so no need to put that cake down and actually work out! This $250 makeup will make all the difference.

It's weird. America really is a consumeristic society. I foresee most millennials and Gen Z (I'm on the border of both) being renters forever. Unless something big changes, but I can't really imagine what.

"The three most harmful addictions are heroin, carbohydrates, and a monthly salary." - Nassim Taleb

Previously Malta Monkey

    • 4
Mar 17, 2020
Malta Monkey:

I would be interested to see how much social media also influences savings. In college there were numerous people around me who took a vacation because "everyone's going to this EDM concert/ vacation spot/ club/ restaurant" etc. Bank tellers and lead baristas would hit up Nobu. It was weird. How many #influencers influence people to overspend all the time? This detox kit will make sure you're not fat, so no need to put that cake down and actually work out! This $250 makeup will make all the difference.

It's weird. America really is a consumeristic society. I foresee most millennials and Gen Z (I'm on the border of both) being renters forever. Unless something big changes, but I can't really imagine what.

Social media is certainly a part of that. The Catch 22 of all of us feeling closer is keeping up with the Jones' is also much closer with people who are in very different economic circumstances. The only way people can stay away from that trap is by deleting their IG accounts.

But I do think if we have a society of zombie consumers, there is a lot of built up consumption because people do not earn more. All of us who are aware of ourselves and willing to forego spending to increase our assets, should benefit from these people who find extra dollars from higher incomes, and proceed to spend it all.

Morally, the cycle will continue to repeat itself, and that's where I'm learning the political battle needs to be. How do we give people the lifestyle they seek, while also appeasing them so they don't disassociate themselves from institutions.

Because, this is the American way, and it has not shown signs of changing anytime soon, with many more Europeans and people from other countries now seeking to also join in on the huge consumption that takes place here.

I think to constantly have an attitude of paternally wagging a finger at non-savers is a lost cause. Policies of support businesses and cut safety nets as punishment to those who do not save or prepare for their futures, is a political regime that has led to no change in consumption habits, and has instead contributed to a lost in social trust.

This pandemic has done a number on exposing what we've been ignoring. That epidemiologists have been projecting higher risk to pandemics due to increase travel, which reflects an increasing worldwide desire to consume like Americans. People want to consume (even though they call it "living my best life" or whatever). A tailored approach would be to abandon many of the supportive measures of businesses and move to one that supports the largest component to GDP that is consumption.

We need to treat this economic reality with science and logic, not with emotion.

    • 5
Mar 17, 2020

I think this is opposite of 'sympathetic' when you don't truly understand that a lot of under privileged people did not put themselves into this situation. The chance to work hard and get rewarded, improved mobility between social ladder itself is actually a privilege many do not have access to.

    • 4
Mar 17, 2020

...

Mar 17, 2020
ironman32:

I don't want to take a harsh tone to them, and I remain sympathetic. I one hand,** I know it can be tough and everyone has some kind of circumstance, no one wants to scrap by. On the other hand, they put themselves in that situation.** Basically, everything is case by case. Wanted to get others thoughts.

The selected sentiment above sums up why there is so much inherent public hatred of our industry and those who participate in it. If anything, our generation in this industry (most of whom went to elite schools, are well off, or well enough off to hobnob with those well off) should have far more empathy because we are not going to make the ridiculous amounts of easy money our predecessors did and our industry will only get more volatile from here on out.

This sentiment "you brought it on yourself", coming from our industry, is rich (to say the least) when one thinks that just over 11 years ago, governments and tax payers literally bailed out our banking institutions (which ended up bailing out a bunch HFs and PE as well as others - think about counterparty risk), a bunch of guys got to keep their bonuses (after having gotten PAID in the previous good years), despite, you know, being at insolvent institutions. Usually, working at an insolvent institution means that people lose their jobs, and if they somehow keep them, their pay and benefits are slashed bigtime. Nobody went to jail either. All upside, little downside.

Oh, then interest rates stayed low, forever, so banks could lever up and fund all kinds of fun positive carry activities. Meanwhile the wealth gap in most societies increased. We can argue that lending is what keeps things going (that's beyond the scope of this post). But essentially those low rates meant that banks could lend to others (read: companies, the well off to buy houses, PE funds etc), or do something as simple as borrow at ultra low rates from the government and use that cash to buy higher yielding treasuries, amongst other things.

Then, a few years later, you had a bunch of these guys partying and making jokes about getting bailed out etc (https://nymag.com/intelligencer/2014/02/i-crashed-...).
Yet Joe Tuesday can't make rent? Can't pay his bills or go to work because he's poor/sick (for whatever reason) etc or take non-existent public transport to his minimum wage job (that is insecure at the best of times) that is being affected by some virus he had nothing to do with. Yeah, he brought it on himself indeed.

One does not have to suffer and live the very tough life that so many in this world do. But a little empathy for others who are not as fortunate and sparing a moment to be thankful for what one has goes a long way.

Good Luck

    • 30
Mar 17, 2020

You deserve all the (many) SBs that are about to come your way.

    • 2
Mar 21, 2020

Damn this is one of the most honest comments on this website I've ever read. Wish I could give you more than 1 SB.

"The three most harmful addictions are heroin, carbohydrates, and a monthly salary." - Nassim Taleb

Previously Malta Monkey

Mar 17, 2020

You sound like a 19yo ass hat, OP

Mar 17, 2020

Objectively speaking, communities and economies are worse off when more people are under skilled or poor or on benefits, however you want to say it. So feel however you want to feel, but life is better for everyone when people can be self-sufficient and contributing to the economy. The more people can spend, the more revenues of businesses go up, etc. Personally you will feel better if you try to help people if you can, and if you cannot then honestly tell yourself you would have helped if you could.

Mar 18, 2020

I think saying that "they are the ones who put themselves in that situation" lacks empathy. but I think a more optimistic and encouraging thing to say to those people who are less fortunate is "they are the ones who can get themselves out"

Mar 18, 2020
dropkilla:

I think saying that "they are the ones who put themselves in that situation" lacks empathy. but I think a more optimistic and encouraging thing to say to those people who are less fortunate is "they are the ones who can get themselves out"

True.

I was thinking about this last night. I think its when someone says some is "rich"; rich can be defined as five homes and a yacht, or rich can be defined as someone who has one house, provides for their family, and has their needs met.

I probably should have clarified this my original post, when I talk about people without emergency funds, I'm talking about people who work and spend rather recklessly. I'm not really picturing people who have high medical bills, are supporting elderly family members, or have some other dire situation (single mom with three kids who husband left was mentioned earlier.)

I get that not everyone puts themselves there, but I guess some did. I know some friends like that, single, have jobs, just overspend. That was more my angle.

I agree that people should be encouraged to get themselves out, that's positive.

    • 2
Mar 18, 2020

Fair. Those overspenders have now learned a valuable lesson. Likely they will ride this out just fine in the long run. No, I agree - I don't have a lot of sympathy for overspenders!

I gotta mention - in the fancy neighborhood 'round here - later 30's to 40s - wow. Divorce. That's when you suddenly see the very very fancy ladies downshift their lifestyles BIG time. They were livin' large, humble-bragging about everything. Poof! Alacazam! Adios. Divorce is very hard on the family budget, even for well-to-do folks. That's when you really see the overspenders get crushed, and you hear the sad stories of the facades they put up to keep up with the Joneses and fit into the right social circle.

    • 1
Mar 18, 2020

Hi,
To be very honest many people are facing this crisis. The financial situtation matters a lot when it comes to meeting the medical funds for a family. People who dont have savings so far should try to save a little just to use in times of crisis. It's actually bad that money plays a big role even during such kind of pandemic outbreaks.

    • 1
Mar 18, 2020

Between Jamoldo's post (on a serious note) and Pussy galore's post I think you've been served. But the gall you have for trying to self-comfort yourself into thinking you "remain sympathetic"... Wipe the shit out of your eyes...

    • 1
Mar 18, 2020

I think you're not aware that 40% of Americans don't have the funds to cover an unexpected $400 expense. Please read that again. 40%. $400.
I'm happy for you that you are not anywhere near the vast contingent of our country that lives very close to the edge. The word "sheltered" comes to mind, but that has a negative connotation. I don't mean to be insulting. At all. But you're very fortunate that this seems so unrelatable that you think there's "blame" to be cast on people who don't maintain an emergency fund.

Of course there are those who overspend, and our society certainly markets the hell out of everyone having everything they want, tons of consumer goods that are nice but are so far from necessity.

But even if you inquire of your own family stories - who fell on rough times? Who needed to borrow from a family member? Who lost a house, or filed bankruptcy, or simply had lots of credit card debt? You'll find it's rampant.

It's nearly impossible for hourly workers to build a cushion. This is one of the reasons why Bernie, AOC, Elizabeth Warren gained such traction and appeal to millions. Wall Street is viewed as the "enemy" because frankly, very very few people live this way. Wealthier areas are vastly in the minority in our country. I think most people work very hard, dual earners, to just about feed the family, have a roof over their heads, transportation as needed, and maybe take a simple vacation. I don't have every stat for you, but especially as life goes on, there are children, there are medical bills, home repairs, auto repairs, child care, I could go on and on. Even a basic lifestyle is very expensive. How did the minimum wage become such a national topic? Hourly earners have a very rough time making ends meet. It's why so many people delay retirement, or older (much older!) Americans find themselves working at the super market in their 70s+. I think saving for a rainy day is hard for hourly workers and salaried workers.

Not every career, including extremely worthy careers, are well-paying. Even the highly remunerated jobs - how hard are people working for that money? Let's be totally honest here - IB LITERALLY works 1.5 - 2x the number of normal working hours. So you should be paid for 2 jobs. What if you actually only had one of those 2 jobs? Could you afford your life and build up enough savings to weather zero income for even a brief period?

I don't think people "put themselves in that situation." I think in general, people working very hard to just scrape by is why so many people game the system to get paid disability or be on welfare to not work at all.

Additionally, things have been "gangbusters" of late, giving our citizens what felt like extra breathing room. Everyone was working, 401k savings were appreciating, people were in no way prepared mentally for such a fast and severe downturn. Human behavior being what it is, people feeling comfortable didn't follow Suzie Orman's rules like they shoulda.

I think it's always better to use a scenario like this to thank your lucky stars it's not you contemplating food, rent, medical bills, and use this experience to remember to save and save hard. If anyone is famous for blowing earnings by going "big" , it's bankers!

    • 7
Mar 18, 2020

this SB

Mar 18, 2020
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