How Americans Spend their Money (pictocharts)

http://www.nytimes.com/imagepages/2008/02/10/opinion/10op.graphic.ready.html

by alaskamiller • 18 years ago

24 26 18 years ago

pg2• 18 years ago

That is frightening: only the richest fifth save money. Or to put it another way, instead of saving, the poorer four-fifths live as much like the richest fifth as they can.

I bet this was not always so in America, and I bet it is not so now in China.

ivankirigin3• 18 years ago

In a consumer culture, where entertainment, experience, and stuff is what life is about, why would anyone save? What are you saving for?

I would imagine with multiple huge revolutions in recent memory, people in China might have a reason for a different outlook. It is actually totally backwards, because a poorer nation can expect to grow at a much faster rate than a developed nation -- you just need to take off the brakes in the system for it to happen. If you ignore the shaky history, you'd have to be pretty dumb to save money when the economy is growing at 10% annually for a decade (unless that savings is in the form of investments, but it usually isn't)

ken• 18 years ago

If you turn off the TV for a few minutes, you'll realize that "entertainment" and "stuff" is not "what life is about", and experiences can be had on the cheap.

asdflkj3• 18 years ago

What do you mean by "take off the brakes"?

jpancake2• 18 years ago

You may also try reading it like this: only the fifth richest have money to save. Due to the inflexibility in cost of necessary commodities (food, housing) one may mistakenly read that as 'the poor trying to live like the rich,' but that is far from the case.

Let's assume that you spend $200 a month (a fairly meagre amount) on food; that would be $2400 a year. And you also spend $600/month on rent (a fairly low/middling amount). That's $7200 a year. Combine the two and you get $9600.

That's already >90% of the TOTAL income of the lowest bracket. The lack of savings among the poorer members of our society has less to do with trying to 'live like the rich' than with 'not being able to do so.'

pg2• 18 years ago

Due to the inflexibility in cost of necessary commodities

Really? So are all the people driving around in lowered SUVs with giant chromed rims rich? Or are you saying that lowered SUVs with giant chromed rims are a necessary commodity?

far33d2• 18 years ago

This is ultimately why consumption taxes are a dangerous thing, despite how logical they seem. They are designed to create incentives for saving, but will merely punish those who have no ability to save in the first place.

At the same time, it might discourage some of what you are describing (living larger than your means). I think that might be the case for some portion of the bottom fifth and a large portion of the second fifth (McMansions, leased cars, etc etc).

byrneseyeview4• 18 years ago

Somehow, Americans had the ability to save fifty years ago, when they were much, much poorer. Did the cost of living go up radically since then? Or are they pretty sure that people who think like you will make sure they don't pay for their profligate nature?

mynameishere• 18 years ago

I won't speculate on the nytime's possible editorial status on the question of class politics, but the bulk of the disparity has to do with the fact that young people tend to go into debt, adults tend to earn and save, and old people tend to divest.

pchristensen4• 18 years ago

Agreed. A couple years ago I was a married student with a kid and a $17K stipend, taking out $XX,000 in loans. Now I'm not borrowing any more money (well, except the house), paying back tons every month, and earning many times what I was then. In two years, I moved from the 20-40% to the 60-80% quintile just by graduating and working. So I'd agree that those bottom two quintiles are distorted by students (not sure how much though)

daviday• 18 years ago

the article is actually about how consumption -not income- is the best measure of financial well-being.

http://www.nytimes.com/2008/02/10/opinion/10cox.html?_r=1...

How Americans Spend their Money (pictocharts)

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