The Federal Reserve Bank of San Francisco reported dire news last month, claiming that US citizens would deplete their savings by October.
The report highlighted that Americans are spending more and saving less since the pandemic days when households accumulated abundant savings and that savings rates are decreasing.
Media outlets nationwide, from big-time news outlets to YouTube channels, commented on the report, where it finally found its way to Reddit, the popular website where users share information in forums.
While many pieces attempted to shock readers with the doom and gloom on the horizon, Reddit users had a starkly different response.
You Guys Have Savings?
The community was far more shocked at the idea that anyone still has savings than a report saying savings are about to run out.
The top comment, asking simply, “Wait, you guys have savings?” received over a thousand upvotes.
Many others shared their lack of savings, saying they haven’t had any for years, that they’ve always lived paycheck to paycheck, or that significant life events like illness or divorce depleted their savings long ago.
The COVID Checks
Other commenters mentioned the oft-cited COVID relief checks. Far too many pundits blame the meager $1200 for society’s current woes, including massive inflation and the general attitude against work.
Reddit users see a lot of similarities between the fiction that $1200 lasted more than a month and this new spin that Americans are only now running out of savings.
More Debt than Savings
Many Americans already have more debt than savings, so this “new information” that savings will run out is almost meaningless.
A May report highlighted this trend, showcasing that nearly 30% of households with incomes of less than $50,000 relied on debt to finance their lives.
Life is Too Expensive
Those who still had savings also scoffed at the news, saying of course their savings were dwindling as they struggled with rampant inflation and stagnant wages.
“Hard to not buy food, water, and shelter. I can cut all my wants, but it’s the needs they keep increasing the price on,” lamented one user.
Diving Into What the Report Really Says
Though some outlets used the report to portend terrifying events on the horizon, like a pending recession, others said that’s not what it’s really saying.
One user attempted to clarify the misunderstanding.
“The Fed is predicting that American savings accounts will drop back down to their pre-pandemic trends by October. This means there was a temporary boost in our savings rates during the pandemic, and now that boost is wearing off,” they said, implying that it’s not a doom and gloom scenario but a return to normalcy.
Whether the report is accurate or not, one thing is certain: average Americans are struggling under the oppressive weight of rapidly increasing prices and low wages. The return of student loan payments in October will worsen the situation for many struggling to keep their heads above water.
Reddit users joke about it because they’ve been living it. It’s not a new situation; they’ve been struggling for months, sometimes even years, and since it hasn’t impacted the wealthy yet, no one cares.
Perhaps the Fed’s report really meant the upper middle class and wealthy would soon run out of savings, which might indeed portend even more economic turmoil on the horizon.
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