|
You must have $5,000 immediately or die.
Who do you turn to in your hour of need?
Don't expect mom, dad, brother, sister
or your best friend to save you -- if you're like the Americans
randomly surveyed by Gallup and Bankrate.com in the summer
of 1998. Only 7 percent of the 1,000 respondents chose "family
or friends" as a financial resource in an emergency.
When it comes to getting out of a tight
financial spot, the respondents vastly prefer impersonal institutions
to personal friends and family. Almost 70 percent were certain
it would be "not at all difficult" to borrow $5,000
from a bank or by using credit cards.
"That would explain a phenomenon
I've noticed recently," says Steve Rhode, co-founder
of Myvesta.org, a Maryland based financial crisis counseling
group. "Lately, when we advise middle-aged couples in
a debt crisis, we're not surprised to find out we also have
their parents as clients facing their own debt crisis."
|
Top five answers
|
|
"If some kind of emergency
came up that cost about $5,000, where would you probably
get this money?"
|
| Borrow,
including home equity loans, friends or family |
45% |
| Withdraw
from account or already have that much available |
32% |
| Borrow,
using credit cards |
9% |
| Don't
know where or how they could get the money |
8% |
| Couldn't
get their hands on this kind of money |
4% |
| Source:
Gallup/Bankrate.com survey |
Giddy
consumers
don't foresee rainy days
The survey numbers seem to paint a picture of
consumers so giddy they scoff at rainy days. "They've
forgotten what the world's like when it rains," Rhode
says. "Consumers assume there will be money to borrow
when the economy is booming. They don't realize that if there
is a recession, very suddenly banks and credit card issuers
have much less money to loan."
The Gallup survey demographics do not
exactly mirror America: 85 percent white, 11 percent black,
2 percent Hispanic, 48 percent college graduates, 24 percent
professional, 24 percent service and retail employees and
19 percent retired/disabled. But the research of psychologist
Philip Levendusky reflects the attitude. He studies reckless
behavior in general at McLean Hospital in Belmont, Mass.
Saving money is a precaution and, Levendusky
discovered, Americans hate precautions. Whether it's wearing
seat belts or condoms, he observed that only 30 percent of
our nation will consistently perform a simple action to divert
potential disaster. Another third will "do it sometimes,
but not on a level that's therapeutic." The remaining
third won't bother to do it at all.
Gen
Xers taking saving to heart
The one demographic cluster actually saving money is at
the age more often stereotyped as walking on the wild side
rather than putting aside an ounce of prevention. Consumers
younger than 34 save at a rate far outpacing baby boomers,
according to a 1998 study by financial consultant Frank Furash.
These Gen Xers set aside income in 401(k) plans, Individual
Retirement Accounts and certificates of deposit as well as
traditional bank accounts. The young savers give Furash two
major reasons for their frugality. First, twice as many young
workers believe in the existence of UFOs as believe that Social
Security will exist when they're ready to retire.
And they know that as the huge Boomer
demographic finally blips its way into old age, a big chunk
of Gen X paychecks will support Boomer retirements. When that
rainy day hits young savers, they say their nest eggs will
look like one shrewd precaution.
-- Posted Nov. 20, 1998
|
