Or medical bills. It only takes one major illness to ruin your average American family.

I can see that.

iPhones and new clothes are exactly the kinds of things that the middle classes can't really afford, but think of as normal.

+1. People who have not yet internalized that they are poor, sustaining to themselves and their children the lie that they are their parents' version of middle class.

> Nearly half of Americans would have trouble finding $400 to pay for an emergency.

http://www.theatlantic.com/magazine/archive/2016/05/my-secre...

I'd be interested to see your (or anyone from that article's) monthly spending/expenses and income. Do you have crazy medical bills or student loans that you can't avoid?

Do you budget your money out and track every transaction? It sucks to be in that situation, but there are always things you can do to improve it.

I've edited the comment. The part "I'm one of them" is from the article title.

Gotcha, thanks for clarifying. Congrats on saving that much too! Sounds like you're on track to do very well.

Only because I fell hard financially first.

If they have their CCs maxed out for clothes and bar tabs, of course that's gonna be the case.

Do you truly believe half of Americans are maxing out their credit cards on bar tabs and clothing? Does that make sense when the majority of bankruptcies are from medical debt?

I don't think credit card debt is driving people into bankruptcy, mostly. From what I've seen (which isn't a ton, but some), people just build it up slowly buying toys and treats. Eventually they stop, either because they get smarter or just can't get any more credit, and then either sustain the debt or very slowly pay it down.

It's hard to go bankrupt from this directly because they're careful not to lend you more than you can pay back. It doesn't always work, of course, but they do a decent job of figuring that out.

Note that a lot of medical bankruptcies aren't bankruptcies due to medical bills alone, but are people with insurance who go bankrupt due to a combination of deductibles, additional non-medical expenses related to the illness, and a sudden reduction in their ability to work. Having a bunch of credit card debt instead of a bunch of savings could easily put someone in that situation, so the two probably work together a lot.

No, it's mostly just not allowing for relatively small bumps in the road. A water heater here, a transmission there, next thing you know...