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Going paycheck to paycheck....... (2 Viewers)
- Thread starter Chemical X
- Start date
Juxtatarot
Footballguy
I'm not sure what qualifies as "living high on the hog", but, for example, someone below the median income for their state certainly could consistently overspend with a higher rent that they can afford, a lot of money spent on vacations, dinners and entertainment out, expensive cell and cable packages, etc. and file bankruptcy without much risk of being busted for fraud.
I agree, though, that fantasycurse's "friend" sounds like a different story.
culdeus
Footballguy
Those seem low risk for a fraud prosecution. The ones they go for you on are where people build up huge assets and then hide them, contractors buying up a bunch of equipment and then hiding them in storage is a better example. You can't re-po a hotel stay on the champs.
MAC_32
Footballguy
It's an issue with me because I don't think it's the exception to the rule anymore. I think it's developing into the rule.
ChiefD
Footballguy
Just there really are no "rules" to this paycheck to paycheck phenomenon. It crosses so many boundaries, social classes, education levels, etc. Nobody here has any idea what's going on in the households around us. And we really shouldn't care. It's none of our business.
Just like someone else's religion, or politics, or whatever is none of our business. And honestly, what I say doesn't really matter either. Yet folks will argue to the death about topics (in this case the paycheck to paycheck topic) as if it's so simple as people are irresponsible with their money. God if it were only that simple...
My wife and I save the best we can. We have a small rainy day fund. We used to have more. My child had a bad medical deal when he was two that nearly wiped us out, and it's taken us 9 years to almost get back to normal. So we are close to paycheck to paycheck. But we aren't irresponsible. We don't live extravagantly. We do without.
We like to have iphones. We like cable TV. We don't go out to eat. We are normal people. I have a chronic disease that while under control now may shorten my expected life span years down the road. So if I want an iphone now I'm buying one.
But by definitions by some here, we are irresponsible because we like to have iphones or other creature comforts.
It's just fascinating really.
The Iguana
Footballguy
In a lot of ways, I can see/agree with that. Especially in some parts of the country - there are plenty of places that cost of living is definitely increasing faster than ability to earn, etc.
Foosball God
Foos
MAC_32
Footballguy
Cost of living is one thing, but I think what @ChiefD just said resonates much more loudly. I don't know what his kid went through and it isn't my business, but it's not unusual. And most can't budget for that. Then how do you rebuild? You cut elsewhere. And the first to go in those cuts is savings. Which is why that 6 month worth of living expenses rule makes me laugh.
belljr
Footballguy
Foosball God
Foos
I mean, the guy won't even stop by and have a beer with you when he's like 10 minutes away from your house.
belljr
Footballguy
dickey moe
Fingerpicker
Yeah, liquidity is not the same as net worth.
Some (err, a lot of) people are really dumb and/or poorly educated about finances. You have to think it's intentional.
JohnnyU
Footballguy
dickey moe
Fingerpicker
The Iguana
Footballguy
But if we accept that something like 80% of Americans are living at or virtually at the "paycheck to paycheck", what % is caused by some catastrophic event? What percentage is caused by poor choices? What percentage by lack of ability to earn enough?
Kind of important questions to answer if you want to "solve the problem". I don't know the answers to all of those questions.
From a general point of view, there are a number of statistics out there about how many people are living right at or above their means. And there is a significant number of people that are "middle class" , "upper middle class", etc that do so voluntarily rather than out of requirement. There are plenty of things that help perpetuate that problem - one of the biggest is credit card debt as a whole is off the charts. Some of that may be required because of certain circumstances but statistically there are a ton of people that live under the "buy now, pay later" philosophy. That creates a whole cycle of it's own - interest payments, stretching budgets to the limit, etc.
So, yes, I totally agree that there is an increasing number of people forced into these scenarios. But there is also a large number of people that are one catastrophe away from total ruin.
Take @ChiefD's story - he had savings but had an unfortunate event and is working to recover. Imagine if he didn't do that planning to have any savings to start with. That is were a ton of people find themselves - and too many by choice, not by circumstance. I was there and I am potentially one catastrophic incident from being back there.
I don't think it means you can't enjoy the now to some degree but there are plenty of people that do so to the "nth degree" beyond where they should. Personally I think I spend a stupid amount of money going out to eat - that's not to say we eat out every meal or anything but we go out to eat at least once a week. I kind of cringe every time I pay one of those checks, especially if I think about what all I could have bought at the grocery for the same amount. But that's a choice we make. There's so much more I could do with that money if I really wanted to.
dickey moe
Fingerpicker
dickey moe
Fingerpicker
MAC_32
Footballguy
How do you control costs without interrupting the free market? That's the question I always get stuck on. I'm an anti-regulation curmudgeon, but I also realize the reason so many are stuck in neutral (or worse) are because median wages are not growing in congruence with the cost of housing, child care, medical, education, etc. Basically the system is progressively more and more disincentivizing having kids. It isn't a sustainable model. The free market will correct this sometime between tomorrow and x number of months/years from now, but it's going to be a very painful process for all whenever it actually happens.
proteus126
Footballguy
A ruggedly self-reliant individual would have seen that ice cream cake coming from a mile away.
dgreen
Footballguy
I guess that depends on what you mean by "not unusual". I'll agree that "it's been known to happen" and probably even "we all know someone who has gone through something like that", but I'd still say it's "unusual" for someone to have a large enough medical bill that it derails their financial plans for a decade. I don't think it's the leading cause of living paycheck to paycheck.
5-ish Finkle
Footballguy
Basically same here, but was out of work for longer(well over a year) and while the wife doesn't work at a Starbucks it's probably only slightly more than the equivalent for salary. Didn't tap into retirement, but basically burnt through most everything else. Finally landed a job with a good salary, but in an expensive market (because that's where good paying jobs in my industry are) and started to dig out of the hole.nirad3 said:
14 months later, I'm rolling into month #3 of another period of unemployment. Missing "one check" wasn't the end of the world, but missing six in this market? It's an issue. I don't even want to think about what it'd be like if we had kids, but I feel you. :(
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5-ish Finkle
Footballguy
The leading cause of living paycheck to paycheck is 25-30 years of wage stagnation in the U.S. that ignored (and continues to ignore) the rocketing cost of living here.
I've twice looked into trying to work abroad because of it. Was never able to pull it off though.
dgreen
Footballguy
Is there data showing households didn't live paycheck to paycheck 25-30 years ago?
Juxtatarot
Footballguy
I doubt there is data like that but the personal saving rate was better decades ago. (It did get considerably better after the recession for obvious reasons.)
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KCitons
Footballguy
The bolded made me think of our kids growing up. There would be times that we would decide we could either go out to eat or we could go to the grocery store and buy something, plus ice cream and toppings. The grocery store usually netted leftovers of both the meal and the ice cream. We left it up to the kids and, 99% of the time, they chose the grocery store because they, in the end, they got more out of it.
KCitons
Footballguy
The only thing I've learned about money management is that it's similar to dieting. Diets never work because you go on some fad meal plan, loose a few pounds, and then stop dieting. Next thing you know, you've gained all the weight back (and then some) Healthy eating has to be a lifestyle. So does money management.
Sand
Footballguy
30 years driving and spent a combined total of 34k on my vehicles. One was 13k new and I'm hoping I can get it to 20 years (10 now). I expect it will be the only new car I'll ever have. Not sure which will be more cache' - your Odyssey or my Fit with a classic plate.
People seem to harp on phones as luxury items, but for most folks that really isn't where the money floats away. It floats away on the big stuff - house and car. Folks will tend to spend to the limit of what they are pre-approved for in a house. That's bad, but at least it tends to appreciate. But cars - man this is where people just hemorrhage money. Here in 'Bama I see so many new (as in 45k sticker) trucks on the road and know of folks who have spent almost a year's salary on them (IMO, it should be no more than 20-25% of gross salary). You know they probably have a 7 year loans on them. And some 70% of luxury vehicles are leased. No wonder I see so many of those on the road. It's pervasive, and it kills savings rates. The payments on these vehicles are huge. Massive unforced errors.
So when I make snap judgments about how frivolous folks are I look at what they drive, not if they have a nice phone. $300/yr on an iPhone isn't some ridiculous expense.
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-OZ-
Footballguy
That's insane. The school i wanted to attend is currently $15,262 - $17188 in state, $49,350 - $52,814 out of state. I don't go there because I took a scholarship offer elsewhere.My instate is 30K
Honest question - is wage stagnation a cause or an effect of something bigger? Seems to me wages would rise if the demand was there, but the demand isn't as big due to technological developments, international trade, and other stuff. In a free market economy, wages only rise when the demand calls for it.
I don't know if that's the root cause of people living paycheck to paycheck.
It's easier for many of us to assume it's personal choices. Especially when you see people making choices you disagree with.
Leroy Hoard
Footballguy
Decades ago people were actually making about 5% interest just sticking their money in the bank or cds. Of course the inflation rate was higher then but people still did it because it seemed to make enough sense.
Juxtatarot
Footballguy
No doubt interest rates impact the savings rate but I assume you’ll agree that there are many other factors too.
DallasDMac
Footballguy
What I find interesting in this thread is how many folks spend time pointing the finger versus how many show any empathy for someone being out of work or working without pay. I find that to be a growing trend in this country. We've lost any sense of compassion for anyone other than ourselves, and love to focus on the shortcomings of others. It's quite sad really.
Ramblin Wreck
Footballguy
I've seen people show empathy and point the finger at bad decisions. It's amazing to me how many people refuse to take responsibility for their choices.
KCitons
Footballguy
Empathy won't help some people. I feel bad for anyone that struggles. Life is hard enough just making it day to day. I try to help people that truly want to help themselves. I don't have empathy for someone that has the means and ability to prevent those struggles. But chooses not to. I would compare it to a career criminal. They may have screwed up once and paid their dues. To do it again and again, they have nobody to blame but themselves.DallasDMac said:
DallasDMac
Footballguy
I find it easy to have empathy for those that are currently furloughed or being forced to work without pay without even knowing them or their current financial situation. I don't feel the need to even worry about whether they "did it to themselves" or not. That's actually my entire point. But here we are, with what is easily a 20-1 ratio of "those people deserve it!" replies versus "yea, I feel bad for someone losing their job even if it is only temporary" replies. Which is exactly my point.
Ramblin Wreck
Footballguy
Long Ball Larry
Footballguy
KCitons
Footballguy
I don't dislike you because of your opinion. And I'm not trying to change you. Honestly, I wish I was more like you. We are all shaped through a lifetime of experiences. And our behaviors are conditioned. It takes reverse conditioning to correct.
I remember years ago I was in Vegas. There was, what I thought was, a homeless person asking for money on the Fremont Street. I gave him five dollars and wished him well. An hour or so later, I saw him walking down a side street talking on a cell phone. (this was back when cell phones weren't as common). He got into a car that was nicer than what I was driving. I thought to myself "I'm such a sucker". I don't give money to people that are asking for handouts anymore. That's a conditioned response.
Fast forward to 3 months ago. I was walking on the strip and the guy walking next to me was a gentleman in his mid 60's wearing a pair of khakis and a dress shirt. He was also wearing Vietnam veterans hat. I thanked him for his service and we walked for about 10 minute talking about his time in the military. He said he had been trying to get a job in the casinos working security. He had been out of work for awhile, but most places don't want to hire someone as old as him. He wasn't bitter, he didn't blame them. He just kept trying. He said things were getting pretty tough and he hadn't eaten breakfast. I didn't hesitate, I gave him $20, told him to have breakfast on me, and wished him luck on his job search.
Same situation two different results. One I felt taken advantage of, one I felt like I helped someone in need. The difference is I took the time to learn about someones situation. I probably need to do more of that before making judgments.
Long Ball Larry
Footballguy
I would be curious to know the stats on these things at different points in the past 60 years.ShamrockPride said:
Sand
Footballguy
Addendum to this. Maybe it's a local thing, but if I drive through the sticks I am always stunned by the number of new trucks parked in front of trailers. Mind boggling, but you can tell what people financially reach for around here.Sand said:
Owning a Ford dealership is just printing money in this state.
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Good luck to you and your family.ChiefD said:Just there really are no "rules" to this paycheck to paycheck phenomenon. It crosses so many boundaries, social classes, education levels, etc. Nobody here has any idea what's going on in the households around us. And we really shouldn't care. It's none of our business.
Just like someone else's religion, or politics, or whatever is none of our business. And honestly, what I say doesn't really matter either. Yet folks will argue to the death about topics (in this case the paycheck to paycheck topic) as if it's so simple as people are irresponsible with their money. God if it were only that simple...
My wife and I save the best we can. We have a small rainy day fund. We used to have more. My child had a bad medical deal when he was two that nearly wiped us out, and it's taken us 9 years to almost get back to normal. So we are close to paycheck to paycheck. But we aren't irresponsible. We don't live extravagantly. We do without.
We like to have iphones. We like cable TV. We don't go out to eat. We are normal people. I have a chronic disease that while under control now may shorten my expected life span years down the road. So if I want an iphone now I'm buying one.
But by definitions by some here, we are irresponsible because we like to have iphones or other creature comforts.
It's just fascinating really.
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NutterButter
Footballguy
That including room & board? That's half the cost of what belljr stated.-OZ- said:
![[scooter]](/data/avatars/m/22/22287.jpg?1659477690){kind=avatar}
[scooter]
Footballguy
A buddy of mine bought a $60K Ram truck. Then he decided that he needed the dually wheels, so he traded it in for a $70K Ram truck. Then he decided that there was something missing from the 2017 model that he just had to have in the 2018 model, so he traded in again.Sand said:
The guy makes good money but he leaks like a sieve when it comes to trade-ins.
Same guy bought a Hummer in 2004 but sold it 6 months later because he was sick of paying $100/week for gas.
[scooter]
Footballguy
That's the thing, though. It's not much of a financial reach for the average person to lease a new truck.
Binky The Doormat
Footballguy
Could have happened to me for years. I really wasn't able to really save until I was in my early 30s. Even then, it wouldn't have taken too many missed paychecks to be at risk.
It spooked me enough to start retirement planning in earnest. Well, that scared the living #### out of me. But I knew I had to get on it, even though it seemed impossible.
SFBayDuck
Footballguy
I remember learning about interest as a little kid via a savings account in the late 70s/early 80s. I tried to do that with my daughter a few years ago, but rates are so low that literally no interest was deposited in her account on a monthly basis. Now she’s got enough in there to earn a penny or two a month. She’s not impressed.Leroy Hoard said:
-OZ-
Footballguy
-OZ-
Footballguy
Yep
I did the "bank of dad" with mine for a little while. Gave 1% / month. That made an impact. But now that their money is in the real bank their expectations aren't being met. So it might have backfired.
