4 in 10 Americans live paycheck to paycheck

[Sunset]

Some of these people are spending money they don't have, for things they don't need, to impress people they don't even like.

So true.
Many of these same people who cannot make it a couple of days without pay, are walking around with an I-phone and a $70/month unlimited plan, and their spouse has one too.

I grew up without a cell phone, and made it, along with all my friends. It would be the first thing I'd drop if I couldn't save money. It is a luxury.

 

[jollystomper]

On the other hand, than means the majority (6 in 10) CAN come up with the money.

Using the universal 80-20 rule, 20% of adults will ALWAYS live paycheck to paycheck, regardless of the paycheck amount (remember the number of folks who win 7+ figure lottery amounts and blow it all away). So those folks you can never help. So a reasonable target would be getting 7-8 in 10 adults to not live paycheck to paycheck.

 

[travelover]

..........I grew up without a cell phone......

Whoa -seriously?

 

[jollystomper]

The other intriguing question would be, if you ask that question to the exact same adults 5-10 years from now, would they still be living paycheck to paycheck. In order words, I suspect most adults at some point would be living like that, or close to that. But over time, one may likely move out of that situation. Meanwhile, the next wave of adults starting out is in that situation. So one has to ask is it the same people, or simply more of a rotation.

 

[MarieIG]

The other intriguing question would be, if you ask that question to the exact same adults 5-10 years from now, would they still be living paycheck to paycheck. In order words, I suspect most adults at some point would be living like that, or close to that. But over time, one may likely move out of that situation. Meanwhile, the next wave of adults starting out is in that situation. So one has to ask is it the same people, or simply more of a rotation.

It's both. Some move out: others rotate. One of my former co-workers who literally asked for money to buy food due to the payroll glitch, was in that situation due to a nightmare scenario with her ex. Time has passed, she since received a well-earned significant promotion and that is no longer an issue.


I have another former co-worker who, while she won't starve (due to SS from an ex), can't keep money. In her case, her family repeatedly came to her with one sob story or another, and drained her finances. She is over 70 and still working. Sad.

 

[NW-Bound]

Another great opportunity to pat myself on the back for being so smart and frugal. If only they were as smart and frugal as me.

Heck, of course.

Thinking back, even when a college student, I had at least $400 in my bank account most of the time. I just don't feel secure without some money. Once I started working a real job, it was not long until I had one year of expenses under my belt. Maybe it took 5 years. Or was it 4, I cannot remember.

Maybe it's just paranoia, but that's how I live my life.

 

[savory]

I am on a committee that works on lobbying gov't for social issues from homelessness to active transportation. As you might imagine, homelessness and food insecurity play a large role in our efforts. Like other communities, we look for approaches to help wth affordable housing and food supply. I think this is good and important but perhaps for some, the relief could have been avoided if they had a financial reserve.

I have just started to try to find out what is the cause of homelessness or food insecurity. I expect for at least some, it is bad financial planning followed by an unfortunate event, like a job loss. In the responses I have read in the earlier posts, it would seem that this is very likely. And, if a solution can be found, very avoidable.

I would like to add a preventative approach to homelessness and food insecurity to our efforts. One of the things that has occurred to me is teaching budgeting starting in elementary school. So people will understand to live within their means and to save for that rainy day. I know many won't but some will. It won't eliminate the non-profits whose services will be required but it might lessen their burden.

I am looking for your thoughts about approaches to encourage people to save and budget. A goal of being able to live for 4 months without a paycheck. Perhaps there is not such a program. But if people have some experience, of programs outside of the family unit, that you feel work to get people to save more and prepare for bad financial times, please post. Thanks

 

[Beststash]

I think the inequality economy, slow or no wage growth, technological advancement, soaring home prices, and globalization has hurt a lot of Americans. Many older workers never recovered from the great recession and probably never will. I have empathy for them and think we need a fundamental change in our social safety net in America.

 

[Major Tom]

Some of these people are spending money they don't have, for things they don't need, to impress people they don't even like.

Greetings OM, and welcome to the forum!

73 de Major Tom
Dit dit.

 

[Philliefan33]

For who the people getting a paycheck or an accountant trying to figure out accrual accounting? You are talking about hourly employees, why in the world do you expect them to be able to handle something a paid professional apparently couldn’t handle?

I’m not sure I understand your question but I’ll try to answer.

The HOA Board of Directors do not get paid. The Association employs maintenance workers and office staff (two full-time workers and a few part time) plus lifeguards in season.

The (volunteer) treasurer wanted to make the change in payroll frequency to simplify the bookkeeping. The employees indicated it would be a hardship and the majority of the BOD voted not to make the change, to avoid upsetting the employees.

They didn’t think they could handle the change from a 14 days between paychecks to 15-16 days between paychecks.

 

[atmsmshr]

At the risk of public shaming for all of my prior poor planning, I am outing myself.

In my 20's I:
- Pawned things between paychecks
- Did not have cash savings between 20 - 26
- Ran up unsecured debt
- Worked menial part time jobs
- Collected unemployment
- Kited credit card bills until about 27
- DW and I once cried together after spending our last $50 on groceries

Never at risk of being homeless but it sucked. Education, opportunity meeting hard work and lucky health got me out of this rut.

 

[gamboolman]

As OIT said - consider all loans you give to friends as gifts. We have loaned out money to friends and some have paid us back and others have not. They are still friends because we view it as charity and a gift.

Ms. gamboolgal and I was poor. We had the one checking account and we usually had to pay the fee's for not having a minimal amount in the account. Floating checks was normal in the early years of marriage. Oilfield Boom & Busts.....Feast and Famine.....having to chase the work all over Texas and Gulf Coast was expensive as we moved 14 times the first 20 years of marriage going to the job(s).

So living PC to PC...yes I see it now with men in there 50's making very good money in the oilfield working international.

I know that I wish I would have found this site 10 year before I did. I simply did not know the basics of investing and money management.

Regardless, Ms. gamboolgal and I are blessed and we know it and are thankful. We still only have the one checking account and Ms. gamboolgal handles all the bills.

We are planning to retire after almost 42 years in the oil patch at end of 2019 and we ought to be comfortable; due in no small part to this community and the information available here.

Lifes A Dance And You Learn As You Go....

Just seems like the blink of a eye that I was tossing a spinning chain out in West Texas and Ms. gamboolgal was in a family way with our first born....

 

[jfn111]

Great Pics Gamboolman.

 

[Spock]

Not a surprising statistic. Just under the same percentage of adults are on welfare. As of 2012 ~110M Americans receive some form of gov assistance.
https://www.creditdonkey.com/welfare-statistics.html

 

[gstillson]

Funny though that 10 in 10 Americans who smoke manage to come up with $10 bucks a day for packs. That is $300 a month right there.

 

[jazz4cash]

My anecdote. Working at Megacorp the salaried employees were paid 2x per month, but the union workforce was paid weekly on Friday morning. Around 10 am the spouses would start gathering outside the chain link fence and the employees would go out and handover their paychecks by shoving them through the fence, or I guess their would be hell to pay when they finally got home. All the local merchants would cash the company payroll checks for a fee or to pay for a purchase. The bars and liquor stores extracted huge chunks of money before any made it to the bank. I think megaC eventually forced everyone to direct deposit.

Bi-weekly paychecks are much easier to manage compared to 2x per month when you have limited resources. I think the HOA Board was very considerate of their workers to maintain the bi-weekly schedule.

 

[Closet_Gamer]

The part of this that I don't get is that the problem persists as people age.

When DW and I were right out of college, we were buried in college debt. Yes, we chose the smaller apartment. Yes, we drove modest cars. No, we didn't eat out a lot. No, we didn't have a lot on our credit cards (one car repair). We were simply stretched.

My megacorp did one of those payroll conversions, and yes, it was an issue for me. I was 24 years old. I survived without with pay day loans, etc. but it was a very lean month when bills got paid right at the edge of the allowable period and not promptly.

The part that I don't get is that folks let that situation continue.

When 50% of your income is going to college debt service, I have a lot of sympathy. But when that debt has been serviced or your first raise comes along, its nuts to not get a bit of a cash cushion even if you're using the debt pay down methodology of rolling the last loans minimum payment into the next loan to accelerate that payoff.

As ever in these discussions both circumstances and choices are in play and what really counts isn't a snapshot of the moment but the long term arc of your choices.

 

[Amethyst]

This is starting to remind me of the meme circulating on FB, about how "if you can afford cigarettes, beer, and tattoos, you don't need welfare."

Funny though that 10 in 10 Americans who smoke manage to come up with $10 bucks a day for packs. That is $300 a month right there.

 

[gstillson]

This is starting to remind me of the meme circulating on FB, about how "if you can afford cigarettes, beer, and tattoos, you don't need welfare."

I am just saying that one bad habit such as that can equal the $400 that 40% of Americans don't have in their emergency fund in a little over one month.

 

[marko]

DW worked with guys making upwards of $1MM a year.

Six or seven times a month, one of them was bumming $100 from her until payday. They couldn't even get that much at the ATM down in the office lobby.

 

[Amethyst]

Was there any indication of the level of "bad habits" that could burn through $83,333 a month?? I mean, I know cocaine is expensive but...the organism can only absorb so much poison.

DW worked with guys making upwards of $1MM a year.

Six or seven times a month, one of them was bumming $100 from her until payday. They couldn't even get that much at the ATM down in the office lobby.

 

[marko]

Was there any indication of the level of "bad habits" that could burn through $83,333 a month?? .

Second and third homes in the Caribbean and Martha's Vineyard, private schools, 4 cars, timeshare jet, $5MM homes.

Making $1MM and spending $2MM. Those Jones' are hard to keep up with, y'know.

 

[iloveyoga]

The other intriguing question would be, if you ask that question to the exact same adults 5-10 years from now, would they still be living paycheck to paycheck. In order words, I suspect most adults at some point would be living like that, or close to that. But over time, one may likely move out of that situation. Meanwhile, the next wave of adults starting out is in that situation. So one has to ask is it the same people, or simply more of a rotation.

+

We certainly lived like that for a few years, single Mom, too young, waiting tables, etc. etc. But I knew what I needed to do and slowly we moved forward, thank goodness.

 

[Popeye]

The other intriguing question would be, if you ask that question to the exact same adults 5-10 years from now, would they still be living paycheck to paycheck. In order words, I suspect most adults at some point would be living like that, or close to that. But over time, one may likely move out of that situation. Meanwhile, the next wave of adults starting out is in that situation. So one has to ask is it the same people, or simply more of a rotation.

I’d like to see the question answered 40, 80, even 120 years ago, inflation adjusted of course. Maybe then we could see if things are really getting worse.

The question that comes to my mind on occasion is about the so called middle class. Was the strong middle class of the post WWII years an anomaly in our history? Did it depart with our manufacturing base?

 

[marko]

Was there any indication of the level of "bad habits" that could burn through $83,333 a month??

Also, after taxes it's more like $45,000 a month. (boo hoo)

Another reference: DW's best friend had a high lifestyle along with a house valued at $4MM.

After 20 years in the house they got a divorce.

When the house was sold and the dust settled they both walked away with ~$58,000 each. From the outside it all looked great but they were essentially flat broke.

We knew privately that despite their famous trips to St Barths, their electricity/gas/phone was being turned off regularly for non payment and that the BMW was 'in the shop' (repo'ed again).

The point is that it's not just the people who look poor who are poor.