This is Why Americans Have so Much Trouble Saving Money

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by Shawn Langlois

“We are all Steve Martin in “The Jerk.” “I love money. I love everything about it,” he once said. “I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gas-powered turtleneck sweater. And, of course, I bought some dumb stuff, too.”

Yes, like the iconic comedian, the American consumer loves to consume. Maybe an electric dog polisher and a fur sink are a bit extreme, but the U.S., with its relatively low savings rate, definitely has a spending problem. So where does it all go? Cost-estimating website HowMuch.net crunched Bureau of Labor Statistics numbers to come up with this telling chart:

As you can see, the average American earned $78,635 in 2018 and spent $61,224 of it, which means we’re spending about 80% of our income. After taxes are taken out, that percentage jumps even more.

Clearly, housing is a big cost, at about 25% of income, but one category that’s been on the rise is education, up double-digits in a single year. That only makes sense, considering the total student debt load has exploded to top $1.5 trillion. Eating out and entertainment have been increasing, as well, while the cost of buying a new car has also jumped. It’s not getting any easier out there.

Of course, big-city budgets tend to look a lot different than the average American’s. This one from the Financial Samurai blog, for instance, captures the financial difficulties facing a family earning $350,000 a year in San Francisco.“

- https://www.marketwatch.com/

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Oh! My heart breaks, it breaks I tell you! “The average American earned $78,635 in 2018″- the horror! Even more unspeakably tragic - “the financial difficulties facing a family earning $350,000 a year in San Francisco!” Sobbing uncontrollably, tears fall heavily down my cheeks, pondering such pain and suffering! Oh hell no they don’t! $78,635, $350,000 - what planet are they talking about? Let’s see, I get my meager VA pension, my little Social Security, totalling… as one wag told me, “That’s not even livable!” Almost… sometimes I wonder. Often, actually. Then I see this… Pardon me if my supply of sympathy and compassion for someone crying the blues about how tough they have it – while making $350,000 a year! – lacks sincerity and conviction… especially since we all must desperately scrape by somehow on $78,635, or even $350,000, right? Right, Good Citizen, how about you? Yeah, you…

- CP