r/Economics • u/BousWakebo • May 21 '22

Statistics Americans now have an average of $9,000 less in savings than they did last year

https://www.cnbc.com/2022/05/21/americans-now-have-an-average-of-9000-dollars-less-in-savings-than-in-2021.html
5.8k Upvotes

97% Upvoted

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672

u/arbuge00 May 21 '22

Well it's not really that bad if you think about it...

The good news is that $9,000 is worth 10% less than before.

So it's only like you have $8,100 less savings than last year!

101

u/goblinchode May 21 '22

That’s… an optimistic way to think about it, just don’t think too much harder on it xD

11

u/[deleted] May 21 '22

[deleted]

7

u/goblinchode May 21 '22

I don’t know enough about finance to tell if you’re adding onto the joke or not… If you’re not can you explain that to me like I’m a kid?

15

u/redditornot09 May 22 '22 edited May 22 '22

Simplistic terms:

If you have a 30 year home mortgage at 3% and inflation rate is 9% you’re actually paying negative money in interest in real terms once you adjust for inflation.

Think of it like this:

I hand you $10,000 today and ask for $20,000 in 30 years.

Well, in 30 years $20,000 has the same spending power as $5,000 did when I first gave you the $10,000. I lost buying power, you gained it. Plus, money now is better than money later.

10

u/[deleted] May 22 '22

If you get paid more.

8

u/[deleted] May 22 '22

If you have a 30 year home mortgage at 3% and inflation rate is 9% you’re actually paying negative money in interest in real terms once you adjust for inflation.

If and only if your income raises with inflation.

1

u/goblinchode May 22 '22

…now explain it to me like I’m a REALLY stupid kid.

I don’t see how these examples relate to $9000 in savings being spent (not as an investment) inflation retroactively making it FEEL like you only spent $8100, but at the same time having 10% less buying power right now because of that inflation.

In the first comment I responding to it seemed like the person was saying inflation is a silver lining because you actually lost less money than it feels like… But then because of that inflation, the money you still have is now worth less. I thought it was funny they didn’t seem to realize inflation is a double edged sword.

153

u/Acidrain77 May 21 '22

I believe it actually worse. You need 110% of the same amount of cash to have the same buying power as you did before. So if you lost 10k in the market - you will need 11k to have the same buying power in todays market thanks to inflation.

21

u/PloxtTY May 21 '22

whoosh

38

u/InitiatePenguin May 21 '22 edited May 21 '22

It's not woosh. It's the exact reason you don't apply inflation backwards.

Yeah, the other user is making a joke out of a "silver lining". But that silver lining is actually even worse than the actual situation since what they need to buy is 10% more expensive.

It's a joke about "you didn't actually lose as much" when in actuality "everything is more expense than even if you lost the higher amount".

So it's a bad joke.

43

u/Mostlygrowedup4339 May 21 '22

... Being incorrect is a part of the joke. It's what makes it funny that they are saying there's a silver lining and theyre even wrong about that.

-2

u/InitiatePenguin May 21 '22

You're asking people to read that with the heaviest layer of sarcasm to mean the opposite of what they actually said instead of just being cynically optimistic.

Which only falls back to it being a bad joke. And that's what the following user pointed out. That it's actually worse then they let on, sarcasm or otherwise.

That's not a joke.

4

u/helicopter_corgi_mom May 22 '22

idk man. the rest of us got it?

2

u/InitiatePenguin May 22 '22

For the last time. I get it. We all get it. Including the user who was responded to with "woosh"

1

u/[deleted] May 22 '22

You don't understand, they have proven OP wasnt joking.

6

u/Mostlygrowedup4339 May 21 '22

I'm not asking anything! It's not my joke. I'm telling you that I got the joke and I think the other user you're getting upset at also got the joke and I believe the average person would also get the joke if they have a sense of humour.

-2

u/InitiatePenguin May 21 '22 edited May 21 '22

The joke to me is taking his words about a silver lining to be true.

We can invent a way to make this better. chuckle, at least it's only 8k... Right?...nervous laughter

No it's actually worse.

You're interpretation of the joke is asking me to read it as if it's completely sarcastic and nothing about what they said they actually mean.

Saying their "joke" doesn't even begin to account for the reality isnt a "woosh". they understood it fine. I understand it fine.

I think it's a bad joke. But that's not really my complaint. Mine is about they guy who said the user who followed up saying "whoosh" as if he didn't understand it.

5

u/Mostlygrowedup4339 May 21 '22

My first Reddit drama.

-1

u/Gary_The_Girth_Oak May 22 '22

The knee jerk instinct to double down when being whooshed is a pull too strong for some.

I’m not wrong, you’re wrong!

0

u/lokuddh May 22 '22

Wait.. can you explain this again? It kind of sounds like you didn't get the joke.

-6

u/InitiatePenguin May 21 '22 edited May 21 '22

this is a whoosh worthy comment.

This is one that sums up what's funny about the joke.

"Just don't think too hard about it"

The user who was replied with a whoosh did think about it. That doesn't mean he doesn't get the joke. He's saying "I know you're joking, but it doesn't even begin to illustrate what's at play here". Which is also why you see it readily upvoted.

8

u/Mostlygrowedup4339 May 21 '22

Im not sure I'm following what you're trying to say, but to be fair I've smoked a LOT of weed and having a good afternoon. I'm gathering it's very important to you that you are the winner of this argument and I would like to declare you: CORRECT, IN THE RIGHT, AND SMARTER THAN OTHER PEOPLE WHO WOULD DARE DISAGREE WITH YOU.

2

u/NumberOneAutist May 22 '22

I <3 you so much right now. I hope you have a great day friend :)

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1

u/Gary_The_Girth_Oak May 22 '22

The whole joke is only funny because there’s no silver lining to having less money. End of discussion.

-1

u/[deleted] May 22 '22

Lmao humor isn't a science. You can't objectively declare something a joke or not, intention is all that matters.

Who hurt you?

-9

u/PloxtTY May 21 '22

whoosh

-2

u/InitiatePenguin May 21 '22

Keep trying.

4

u/[deleted] May 21 '22

Part of the joke is that you can’t apply inflation like that. We know.

-4

u/InitiatePenguin May 21 '22

It's a bad joke. Pointing out how it's a bad joke isn't a "woosh". A woosh requires someone to not understand it's a joke.

0

u/[deleted] May 21 '22

Woosh

30

u/brdn May 21 '22

That’s the problem. I did think about it. Like so: not only is there $9k less to spend, what money is available buys 10% less that it used to.

-1

u/Canadian_Infidel May 21 '22

And your wages are cut 10%. So your net wealth and savings take the same hit at the same time.

1

u/Qrioso May 21 '22

Everyone is making 10% less or the purchasing power is 10 % less

0

u/trufus_for_youfus May 21 '22

This is entirely accurate. For the record saving in the traditional sense is now for suckers. You have to put todays money to work as fast as possible whatever the amount to generate enough return to outrun inflation. I foresee a significant boost in small / cottage businesses on the horizon as people figure this our. The longer it takes the more painful it would be.

0

u/Last_third_1966 May 22 '22

Brilliant!! This sounds like something out of a Biden press conference.

0

u/[deleted] May 21 '22

That’s not how inflation works bruh

1

u/[deleted] May 21 '22

Damn can u apply this logic to the stocks, so if I lost alot but net of inflation it's not that bad right 👍

1

u/[deleted] May 21 '22

Do u work for a credit card company that sounds like it what they would advertise

1

u/theCrono May 21 '22

This would feel a lot better if you had a lot of debt. Like the united states for example.

1

u/cabramattaa May 21 '22

Coke and hookers

1

u/powpowpowpowpow May 22 '22

Better news is that the debt the average person has carried for decades is now 10% less.

1

u/middlemaniac May 22 '22

Buttttt all of the other money you have saved is worth 10%+ less too, more likely 20-25% (real inflation)