The Core
Why We Are Here => Economics & Investing => Topic started by: Mackin USA on April 26, 2018, 11:47:06 AM
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When times are good, Americans feel confident by keeping little in checking, but when times are difficult consumers store money in checking accounts, effectively pulling back on spending on retail and restaurants. “Yet, the Federal Reserve keeps raising interest rates,” he said.
Consumer had the least amount of money in their checking accounts in 2007, when times were good just before the Great Recession. In fact, they had on average less than $1,000 in their account. Since 2008, the checking account customer has been hoarding more money.
https://www.marketwatch.com/story/markets-are-behaving-strangely-and-this-new-data-suggests-bank-customers-are-too-2018-04-25
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We're seeing similar trends in Canadian credit unions.
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I built up a big (for me anyway) cash reserve for the exact reasons you allude to - fear of having to bail out a parent with Alzheimer's, fear of job loss, etc.
It's not the best investment strategy, but it feels "safe" to have more than a year's worth of cash reserves.