My family has weathered this recession/depression pretty well, but we were very hard up in the late seventies. I can remember one week after buying groceries and paying the bills where we had 18 cents to spare. We pretty much ate peanut butter, hot dogs, and eggs for months after reaching that 18 cent balance just to try to give ourselves some cushion. But it was tough. I feel for a lot of these folks - of course some of them are young and have parents who might bail them out if they got in a jam. But my guess is most of them are just regular folks living paycheck to paycheck and they'll have to use a credit card if the hot water heater blows or the car breaks down.
The good thing is once they've lived through sparse living and their income starts growing, they'll save some money before they inflate their lifestyle. I know we did and what a blessing it's been.
I think the problem in a lot of cases is that not only do they have no savings, they have maxed out their credit card(s) on frivolous stuff.
I was there, long ago. I made a choice to live differently. I paid off all my debts, and only use a credit card for the convenience. I pay it off every month, and don’t use it for anything I can’t pay off that month.
I also got off the car payment treadmill. I bought only the car I could afford, with cash, but saved what would have been a car payment so I could pay cash again the next time.
I refinanced my mortgage to a 15 year term, and a couple of years ago the balance was so low that I wasn’t even even itemizing deductions on my tax return. So, I paid it off, and we are truly debt free.
I had to make a lot of sacrifices to get here, at least compared to my peers. No flashy car every few years, no expensive vacations. But, we don’t worry whether I will have a job tomorrow.