1 in 3 Americans on verge of financial ruin

According to a survey released Monday by Bankrate.com of more than 1,000 adults, 37% of Americans have credit card debt that equals or exceeds their emergency savings. “These numbers mean that three out of every eight Americans are teetering on the edge of financial disaster” — thanks to the fact that many of these folks might be hard-pressed to pay for an emergency should one arise, says Greg McBride, Bankrate.com’s chief financial analyst. “Not only do most of them not have enough savings, they’ve all used up some portion of their available credit — they are running out of options.” 

That’s particularly problematic considering that emergencies happen more often than you might think. A 2014 survey by American Express found that half of all Americans had experienced an unforeseen expense in the past year — some of which could be considered an emergency. Indeed, 44% of those who had an unforeseen expense(s) had one for health care and 46% for car trouble — two items that for many Americans are must-pay items, as you need a car to get to work and your health expenses are usually not optional.

DYI Comments:  I've never understood what runs though the minds of those who go paycheck to paycheck.  As credit becomes their substitute for savings when that unforeseen car repair or God forbid a medical bill that is impossible to postpone.  Running balances constantly on credit cards is a quick way to the poor house, your middle of the road billionaire are generally bankers; need I say more?

The solution is to live below your means.  I mean substantially below as an aspiring future millionaires.  They will not purchase a house (or rent equivalent) greater than 1.5 times income. Many will push it down to one times their income so that can pay off the house in fast order. Small house?  You bet it is!  Along with that as well millionaires are the biggest purchasers of used cars or trucks, keeping their purchase below the 30% threshold of one's yearly income for transportation. The reason they do this is to free up money to purchase income producing assets: stocks, bonds, and real estate to create additional cash flow to pay bills to further free up money for more income producing assets.  They put themselves into the virtuous circle as compared to the never ending vicious circle of debt payments.

DYI