# The need for a savings culture in America (for rainy days) **URL:** \ **Category:** Great Debates\ **Created:** [March 16, 2020, 3:19pm UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586 "2020-03-16T15:19:16Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![monstro](https://avatars.discourse-cdn.com/v4/letter/m/ba9def/32.png) [@monstro](https://boards.straightdope.com/u/monstro)\ **Post date:** [March 16, 2020, 11:47pm UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/21 "2020-03-16T23:47:00Z")
> [@Great\_Antibob](#): > > Maybe because the [results are not quite debunked but certainly in question](https://www.theatlantic.com/family/archive/2018/06/marshmallow-test/561779/). The test couldn’t be successfully replicated when they took a larger (and more statistically relevant) sample. > > But people like it because it provides a “just so” morality story. The results may still be valid, but this test certainly doesn’t show it and indicates that if it is, the effect is smaller than originally thought. Uh, you posted the same thing that **Transluscent Daydream** did. ---
**Author:** ![asahi](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asahi/32/8693_2.png) [@asahi](https://boards.straightdope.com/u/asahi)\ **Post date:** [March 17, 2020, 1:26am UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/22 "2020-03-17T01:26:08Z")
> [@iiandyiiii](#): > > That’s why I suggest post office banks – basic banking services available to everyone, everywhere there’s a post office. Including cashing checks with no predatory fees/interest. Japan has done this for a long time. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [March 17, 2020, 4:33pm UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/23 "2020-03-17T16:33:43Z")
> [@Translucent\_Daydream](#): > > I think that the "payments of [tiny amount] for [not big amount] is more of a sales gimmick than anything else. If some people were set to spend $45 bucks on a toaster oven, and found out that for the same $45, they could get a stand mixer and salad chopper gizmo for the same total $45 bucks, they might get it, even if they would be billed $45 bucks again the next month. Does that make sense the way I’m explaining it? Only if I turn my brain off. It’s not “the same $45”, it’s $90, just spread out. I mean, I realize that there are situations of restricted cash flow where people may need to pay less up front- everyone runs into that- the only difference between a mortgage and something like this is the scale. But people need to know what they’re getting into- they’re likely paying $90 for $60 worth of stuff, just spread out over a couple of payments. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [March 19, 2020, 9:25pm UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/24 "2020-03-19T21:25:46Z")
> [@Great\_Antibob](#): > > If you want people to save, people need to be paid enough to save. > > The current research indicates millenials (the roughly ~20-40 year olds) [already do a better job](https://www.vox.com/sponsored/13219620/chase-newsroom-generational-money-talk-charts-millennials) than their parents of saving, and this includes having at least some kind of an emergency fund. > > But they [started way behind](https://www.businessinsider.com/millennials-saving-habits-less-wealth-versus-boomers-2020-2) due to reasons (they’re not paid as well as their parents in general and got hit by recession early in their careers and cost of living higher than the last few generations). > > It’s easy to blame the latest gadget or whatever, but seriously, the research indicates the younger set actually does better, on average, but still lags for reasons outside their control. Maybe start with the actual data instead of stereotypes? If you look at [savings rates around the world](https://en.wikipedia.org/wiki/List_of_countries_by_gross_national_savings), clearly income and wealth have something to do with it (a lot of very poor countries at the bottom of that list), but it’s not at all clear to me that savings rates are primarily driven by income. There are many many poorer people than the US millennial generation that save at much higher rates. Saving probably has a lot more to do with culture and experience than income. I don’t have a lot of insight on what the essential part of that culture might be, since I am also a natural saver and always have been, long before I learned about finance or interest. I think that postal banking is a great idea, but I’m skeptical that it will make much of a difference in savings rates. The hard part of saving is not having a savings account to put money into, it’s not spending money on stuff you want! ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [March 19, 2020, 10:28pm UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/25 "2020-03-19T22:28:22Z")
> [@Kearsen1](#): > > Oh no, it is absolutely needed. As well as classes called “CREDIT CARDS ARE THE DEVIL” to get through to the religious folks. Other classes called “Revolving lines of credit and compounding interest 101” I’ve no doubt these would be useful things but you’re missing my point. Western countries have never been so indebted before. Why is that? It’s not because of a lack of humorously named financial literacy classes because we have never had that sort of thing, not on any meaningful scale. It is not that long ago, historically speaking, when your credit card class would have made no sense because there were no credit cards. Credit cards did not exist at all until the 1920s, and didn’t become universal (e.g. not store-specific) until decades later. We live in a system that is structured to expect people to have debt. It is exceptionally difficult to exist as an adult WITHOUT credit cards. In part because of incredibly low interest rates, it’s effectively impossible for all but the extremely wealthy to own a home without truly staggering debt, and for all but the very well off to own a car. Is there any evidence that only stupid people get into debt trouble? People with graduate degrees and high IQs get into terrible debt trouble. People who totally understand how compound interest works get into debt trouble. We have created an economy where borrowing is not only encouraged but deliberately made as cheap as possible - at least at first - to let you get into it. Once you’re in serious trouble then the system sends people to the payday loan joints. What was the first thing any part of the apparatus of state in the USA did in response to the COVID-19 panic? They made it easier to borrow money. There was hardly anything else that could have been done, because nothing that did not involve borrowing money would have had any hope of restoring confidence. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [March 20, 2020, 12:38am UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/26 "2020-03-20T00:38:50Z")
> [@RickJay](#): > > What was the first thing any part of the apparatus of state in the USA did in response to the COVID-19 panic? They made it easier to borrow money. There was hardly anything else that could have been done, because nothing that did not involve borrowing money would have had any hope of restoring confidence. That’s not true. The CDC started working on a test months ago. They screwed it up and apparently got bound up in regulatory squabbles, at least in part because there’s a moron at the tiller of state, but it’s not like no one did _anything_. The Fed cut rates when the market crashed because that’s what the Fed does. It was hardly the only or first thing that happened. ---
**Author:** ![Bryan\_Ekers](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bryan_ekers/32/183_2.png) [@Bryan\_Ekers](https://boards.straightdope.com/u/Bryan_Ekers)\ **Post date:** [March 20, 2020, 5:52am UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/27 "2020-03-20T05:52:29Z")
I like using my credit cards and I pay them off in full each month, and of course the reason the credit card company is willing to do this for me is because for every user like me, there’s at least one user who carries balances, pays fees, and generally does _not_ use the card to their own benefit. Those users are basically subsidizing my convenience, god bless 'em. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [March 20, 2020, 11:00am UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/28 "2020-03-20T11:00:21Z")
There’s a fee each time you swipe too. ---
**Author:** ![Bryan\_Ekers](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bryan_ekers/32/183_2.png) [@Bryan\_Ekers](https://boards.straightdope.com/u/Bryan_Ekers)\ **Post date:** [March 20, 2020, 12:36pm UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/29 "2020-03-20T12:36:02Z")
> [@Ruken](#): > > There’s a fee each time you swipe too. Well, to the merchant, but with the exception of a few razor-margin retailers who give discounts for cash or debit, I’d be paying that price anyway. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [March 20, 2020, 2:38pm UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/30 "2020-03-20T14:38:07Z")
The point is that the “reason the credit card company is willing to do this for [you]” is that your use of the card generates revenue. ---
**Author:** ![spifflog](https://avatars.discourse-cdn.com/v4/letter/s/c5a1d2/32.png) [@spifflog](https://boards.straightdope.com/u/spifflog)\ **Post date:** [March 20, 2020, 3:35pm UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/31 "2020-03-20T15:35:14Z")
> [@Velocity](#): > > America has long been a nation of spenders rather than savers . . . I might not be neither here nor there, but I don’t think this is accurate. I believe that in the WWII era, Americans were one of the most saving people in the west. Not sure when that changed, but it would interesting to know. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [March 20, 2020, 5:31pm UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/32 "2020-03-20T17:31:23Z")
> [@Velocity](#): > > How to encourage a savings culture once this Covid-19 is past? Merely getting more money into the hands of private individuals won’t suffice; many simply spend it as soon as it comes. One possibility would be to redirect our tax policy. Enact a national sales tax and reduce income taxes by an equivalent amount. The point would be that people would pay taxes when they spend money rather than when they receive it. This would encourage less spending and more saving. ---
**Author:** ![Kearsen1](https://avatars.discourse-cdn.com/v4/letter/k/3d9bf3/32.png) [@Kearsen1](https://boards.straightdope.com/u/Kearsen1)\ **Post date:** [March 20, 2020, 5:37pm UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/33 "2020-03-20T17:37:20Z")
> [@Translucent\_Daydream](#): > > I think that the "payments of [tiny amount] for [not big amount] is more of a sales gimmick than anything else. If some people were set to spend $45 bucks on a toaster oven, and found out that for the same $45, they could get a stand mixer and salad chopper gizmo for the same total $45 bucks, they might get it, even if they would be billed $45 bucks again the next month. Does that make sense the way I’m explaining it? > > The people that I have noticed that do the “flex pay” crap are generally older folks on fixed incomes, not young people. Young people don’t buy shit off of TV. Tell that to the people who use layaway for a $50 purchase … ---
**Author:** ![Kearsen1](https://avatars.discourse-cdn.com/v4/letter/k/3d9bf3/32.png) [@Kearsen1](https://boards.straightdope.com/u/Kearsen1)\ **Post date:** [March 20, 2020, 5:43pm UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/34 "2020-03-20T17:43:21Z")
> [@RickJay](#): > > I’ve no doubt these would be useful things but you’re missing my point. > > Western countries have never been so indebted before. Why is that? It’s not because of a lack of humorously named financial literacy classes because we have never had that sort of thing, not on any meaningful scale. It is not that long ago, historically speaking, when your credit card class would have made no sense because there were no credit cards. Credit cards did not exist at all until the 1920s, and didn’t become universal (e.g. not store-specific) until decades later. > > We live in a system that is structured to expect people to have debt. It is exceptionally difficult to exist as an adult WITHOUT credit cards. In part because of incredibly low interest rates, it’s effectively impossible for all but the extremely wealthy to own a home without truly staggering debt, and for all but the very well off to own a car. > > Is there any evidence that only stupid people get into debt trouble? People with graduate degrees and high IQs get into terrible debt trouble. People who totally understand how compound interest works get into debt trouble. We have created an economy where borrowing is not only encouraged but deliberately made as cheap as possible - at least at first - to let you get into it. Once you’re in serious trouble then the system sends people to the payday loan joints. What was the first thing any part of the apparatus of state in the USA did in response to the COVID-19 panic? They made it easier to borrow money. There was hardly anything else that could have been done, because nothing that did not involve borrowing money would have had any hope of restoring confidence. No I grok your point. My point is a simple one, no intelligent people (ones who know about compounding interest) DO NOT get into debt trouble, at least not without a significant bad life event happen. It is entirely possible to live on cash, but as bump said in an earlier post. People are really bad at delaying gratification. This is where the “stupid” kicks in, not because they aren’t smart in other areas but for some reason when it comes to money and debt, people are incredibly stupid. And a part of it, you allude to. It is an almost built in mechanic at this point. The way we live in our society is built on being in debt. House, car, cards, I mean what is an extra $45/month minimum payment. Who cares that its going to take 45 years to pay off that 9K credit card. People should care, and that is precisely WHY they are stupid in this regard. ---
**Author:** ![Bryan\_Ekers](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bryan_ekers/32/183_2.png) [@Bryan\_Ekers](https://boards.straightdope.com/u/Bryan_Ekers)\ **Post date:** [March 20, 2020, 6:18pm UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/35 "2020-03-20T18:18:25Z")
> [@Ruken](#): > > The point is that the “reason the credit card company is willing to do this for [you]” is that your use of the card generates revenue. Still pretty trivial compared to the people who don’t or can’t manage their credit. For me, it’s like enjoying an inexpensive casino buffet, knowing that the building itself was paid for by the suckers shoveling their money into the slot machines. ---
**Author:** ![Velocity](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/velocity/32/18006_2.png) [@Velocity](https://boards.straightdope.com/u/Velocity)\ **Post date:** [March 22, 2020, 4:23am UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/36 "2020-03-22T04:23:52Z")
So, I have little understanding of Business 101: What would be the ramifications of laws requiring businesses (especially, big corporations) to maintain savings of a certain size, specifically to shield them from things like disasters and pandemics, so that the federal government has less need to bail them out? ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [March 22, 2020, 4:58am UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/37 "2020-03-22T04:58:00Z")
> [@Kearsen1](#): > > It is entirely possible to live on cash, but as bump said in an earlier post. It’s possible but it can cause difficulties. I’ve never owned a credit card. I never borrow money. If I want to buy something, I pay for it. I always felt like I was being responsible and demonstrating good financial sense. Then about ten years ago, I wanted to start shopping for a house. And I discovered that banks are shocked that a person my age effectively has no credit history - and they have minimal interest in starting one with me. So I had to intentionally go into debt and repay those debts so I could build up a credit history. I’m now in my fifties and I working on building up the kind of credit history that most people build when they’re in their twenties. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [March 22, 2020, 5:12am UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/38 "2020-03-22T05:12:13Z")
> [@Velocity](#): > > So, I have little understanding of Business 101: What would be the ramifications of laws requiring businesses (especially, big corporations) to maintain savings of a certain size, specifically to shield them from things like disasters and pandemics, so that the federal government has less need to bail them out? What form would these savings be in? I’m guessing you don’t expect major corporations to have big bags of cash stored in their basement. So if a corporation is going to have “savings” it’s probably going to do it by having some valuable assets on hand that it could readily cash in if needed. And the most obvious asset would be for them to own stocks. Which means we’re expecting corporations to maintain their financial stability by owning shares in corporations. Such a plan seems to defeat the purpose. Even if we just force them to avoid the stock market and put their money into savings accounts at banks, that’s not really any different - banks are just another form of corporation. And even if you could devise some good place for corporations to put this money, you’d still have the issue of missing capital. Good corporate management involves taking your profits and developing the corporation. If you tell every corporation it has to take a share of its assets - let’s say ten percent - and set it aside, then you have ten percent of the corporations assets sitting idle rather than being used to expand and improve the corporation. That means corporations will be doing less building of new plants, less hiring of new employees, less training, less research, less development of new products - all things which good corporations should be doing. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [March 23, 2020, 2:00am UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/39 "2020-03-23T02:00:54Z")
Back when I had a job that naturally created a savings account I didn’t think about it. My lifestyle didn’t increase with pay increases. Now I think about it. I take out all my insurance and property taxes on a weekly basis. I keep an HSA account that currently will cover all costs for a year and I’ll continue to feed it as a retirement account. I won’t use it unless it’s a major health event. So while I didn’t have to think about money in the past I definitely think about it now. A wise person once taught me a valuable lesson on spending. He said you should look at how much money you have every week after paying all your bills and divide that by hours worked. So if you have $100 left over and work 40 hrs then your spending money is based on $2.50/hr. If you are thinking of buying a giant TV and it cost $2000 then it will take 20 weeks of labor to pay for it. The $300 TV starts to look better because it takes 3 weeks of labor to pay for it. I can move closer to the TV for free. ---
**Author:** ![Yllaria](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yllaria/32/3452_2.png) [@Yllaria](https://boards.straightdope.com/u/Yllaria)\ **Post date:** [March 23, 2020, 3:05am UTC](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586/40 "2020-03-23T03:05:57Z")
I’m old enough that I remember having a savings account that gave 4.5% interest. It was easier to save when I could see tangible results. Now regular savings doesn’t keep up with inflation. It’s kind of a disincentive. [Previous page](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586.md?page=1) [Next page](https://boards.straightdope.com/t/the-need-for-a-savings-culture-in-america-for-rainy-days/849586.md?page=3)