4 in 10 Americans live paycheck to paycheck

[scrabbler1]

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."

Don't forget lottery tickets.

I remember once back in the 1990s, I had to go to the local mini-mart one Friday night to get some milk. There were 5 or so other customers in line at the store at the time, and every one of them was buying smokes, beer, or lottery tickets. I was the only customer in there who wasn't buying some vice, albeit legal. I felt like screaming at them, but I knew that would have been very unwise.

 

[Redbugdave]

A classic from the past...Saturday Night Live Debt Skit...

https://vimeo.com/41152287

 

[scrabbler1]

Redbugdave, thanks for posting the skit. Simple, and terrific!

 

[Spock]

If you really want to pat yourself on the back, next time you're using an ATM pick up some of the trash (other peoples ATM receipts)... there is a good chance one will be sticking out of the ATM machine when you walk up to it.
Most of the balances will be $100-200.


I was in the credit union a while ago when a guy came in and said his new cash card wasn't working with the ATM outside the front door. He was trying to take out $10 and the ATM only dispenses $20 bills.


Personally I expect the % of the population living paycheck to paycheck as a lot of college students can't perform an ROI on how much debt they are racking up to get a near worthless (in comparison to their cost) degree. Adjusted for inflation, the average college debt at graduation is the same as what I graduated with years ago, but I started with an above average salary to pay it off.... they loan was 25-35% of my total salary whereas people are graduating from cosmetology school owing 100% of their annual salary, then there is the 150K debt and a 28K starting salary IF they can get a job in their chosen field.

 

[gstillson]

The education level does probably have something to do with things.

I was at a Thai restaurant and ordered Thai iced tea. The waitress wrote down Tie iced tea and had to pull out a calculator to make change from a $20 when the bill was $19.81.

I mean you can't fix that can you?

 

[kneehigh]

I'm 61 and been retired for 5 years. My stream of income now is as much as I was getting being a teacher in California. I have a 401k and SS that I haven't dipped into as well as continuing to contribute to a spousal IRA. No debt and no mortgage.

I had two colleagues who were getting more income than I was. They spent their money improving their homes, bought bigger houses, showed off their latest cars and gadgets. For lunch, they went out to eat. Needless to say, one guy lost both of his houses and had to start all over. The other guy spends his whole paycheck paying the mortgage. They are still working.

I'm here in Hawaii spending time with my grandkids still being physically active. I have had the opportunity to visit different places since retiring. I'm still frugal and look more like a bum, but little do my friends know. You choose your lifestyle...

 

[ownyourfuture]

A man posted this letter in the opinion section of my local newspaper back in 2014.

Increasing minimum wage makes a difference
Posted: 04/18/2014 6:14 AM

I was a beneficiary of the minimum wage laws.

When I was earning my undergraduate degree from 1972 to 1976, I was earning a minimum wage of $1.75 an hour as a laundry worker. In addition to taking 12-14 hours of college classes, I worked from 2 p.m. to 10 p.m. six days a week either driving a van that picked up dirty linen from nursing homes — or stuffing that laundry in 400-pound capacity washing machines.

For a year, I was also the assistant manager of an apartment complex, vacuuming hallways on the weekends, getting my apartment rent-free.

My after-tax take home pay 40 years ago was about $75 a week. Not only did my wife, who was a stay-at-home mom, & I live on it, we paid my full tuition, books, & fees; paid off the doctor ($600) and hospital ($600) bills for my daughter’s Caesarean birth, & even had about $1,000 in savings when I graduated.

We took no food stamps, no student grants or loans, & no money from relatives. And while it was at times tempting, we robbed no banks.

Yes, we were very frugal. Our apartments were small, uncarpeted, & un-air conditioned. We drove a $400 used car. The only time we saw the inside of a restaurant was when a relative took us out for supper.

There were no cellphone, Internet, or cable bills. But we did not starve, go naked, or feel deprived — at least that I remember.

Why? Apartment rent was $80 a month, including utilities. Groceries ran about $15 a week. Full tuition was $140 a quarter.

In the 1970s a new car could be had for $3000 & house for $10,000. Gas was 30 cents a gallon. We had no health insurance, but could afford to pay for doctor & dentist appointments upfront. Chewing gum, candy bars & small bags of potato chips were all about a dime.

I bought a new B&W 19” TV for $80 & a stereo for $300 (Big fight over that one, but boy, did Maria Muldaur singing “Midnight at the Oasis” sound good!)

So here is my point: I estimate that the cost of living has gone up by 1,000 percent since my days in college. Today’s apartment rents are $800, cars $30,000, & candy bars $1.00. Yet the minimum wage, even with this last increase, is nowhere close to $17.50 an hour. One cannot live, even modestly, on today’s minimum wage.

This makes it necessary for the government to step in & provide food stamps, free-&-reduced hot lunches, & subsidized health care, child care, & housing for the working poor.

We’ve made the trade off as a society that we’d rather pay higher taxes to fund welfare benefits than pay an extra few pennies for our Big Macs so salaries would allow workers to live without help.

My guess is that most people who are working at minimum wage would prefer making enough to take care of their own living expenses rather than being on the dole. Who really wants to see themselves as a charity case?

By raising the minimum wage we are also raising people’s self-sufficiency — a genuinely American value. Thank you, Minnesota legislators, for nudging us in the right direction on this important issue.

 

[Amethyst]

Private schools are expensive, but sometimes they can be a smart expense. Depends on how the schools are where you live.

Timeshare jet, phooey. Couldn't even afford their own jet.

That's a joke of course, but it made me think: the second and third homes could've been doable, even on a smaller income; but I bet they thought they needed to keep up with the "real money" people while they were there; servants, expensive restaurants/bars/entertainment, costly beauty/spa treatments etc. It's all that "gotta do it, lest people see through me" stuff that eats up the stash.

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.

 

[ERD50]

Originally Posted by rcpilot
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.

Shhhh. You might spook rcpilot, seems to be kind of shy! Maybe give him/her about 4 years for a reply?

rcpilot is an unknown quantity at this point
rcpilot rcpilot is offline
Confused about dryer sheets
Total Posts: 1
Join Date: 12-01-2014

-ERD50

 

[Sue J]

A few years ago our city utility company upgraded to a new billing system. For some customers a bill wasn't issued for one month and then the next month the bill included 1.5 months or 2 months worth of usage as the new billing dates got caught up.

A friend of mine was so upset over this because she couldn't figure out how they were going to be able to pay more than one months worth of utilities. She and her husband both work full time, they have a nice house and 2 newer leased cars. They go out all the time for food and drinks. And she can't figure out how last months utility bill was never sent so it's included in the next bill. What happened to the money that should have been for last months bill? Did you notice you didn't pay last month? That money SHOULD still be in your bank account, shouldn't it? Or did you need another trip to Target for that chotchke you saw on Instagram?

These folks can spend their money how they want but don't go having a hissy fit because you can't pay your utility bill. This was not gigantic amount, I remember her saying that her extra big bill was $375 (2 months in the summer with AC and the bill includes electric, water, sewer and trash). I think they are living paycheck to paycheck and just getting by.

 

[Ronnieboy]

DW and I were talking about this the other day when there was a 'news' story on the 10pm local local channel stating how this family was already having trouble paying the bills - due to the federal furlough and it was only a couple of days into it....they hadn't even missed a paycheck yet. It was eye opening and sad at the same time.

I also get to deal with this first hand as one of my children, DD, has no clue about money and how to handle it. There always seems to be an emergency and when she has cash she is more than willing to spend it without regards to what she will need in the future. There is no reasoning with her and even suggesting to get a bank account and have direct deposit so she doesn't have to pay a check cashing fee or a paycard debit fee the answer is...."it's only a dollar" Love that one. Guess what after a few thousand of those dollars it starts to add up to real money

I also have to admit that when I was in college with a wife and two kids we were living paycheck to paycheck, had to float some checks, use an over draft continuously and a car repair would put a serious dent in our cash flow, even having to ask DD for some car repair help. But we also tried to cut expenses where we could, wife worked graveyard to save on childcare, I worked as many hours part time as I could while going to school full time and studying. Going to the Aldi and other bag your own grocery places as they had lower prices, etc.

We could've done much better since graduating college but we tend to spend what we want when we want, after our savings. We could be and should be more frugal and spend conscious but we're not. It would make our early retirement plan much more stable if we were but for now still planning on a semi-retirement in 5 years at the double nickel.

 

[Pellice]

I think the problems are diverse and complex. In addition to the causes above, I’ve seen firsthand the results of raising kids to “follow your passion” when choosing a college degree. What a shock to learn there are very few high paying jobs for English and art majors and even law school grads. OTH, getting a degree and training in something you dislike and then grinding at it will not make for a satisfied employee who will be promotable. I think raising kids to have diverse interests and experiences and then choosing something marketable is a better way to go than the “follow your heart/passion” plan so many of my generation taught their kids, combined with the student debt crisis, high housing, etc make it tough for many.

But also important is a reasonable work week, the kind that unions were able to negotiate. If you are able to have time for a life outside of work, you can better manage a less than thrilling job. We all know people who are titans in their areas of interest even though their j*bs are nothing special.

 

[marko]

That's a joke of course, but it made me think: the second and third homes could've been doable, even on a smaller income;

We've been to a few of their second homes. These things are not three room cabins on a lake; they're 8 bed, 8 bath mansions going for $1MM+ So if you have three homes you've got maybe $5MM worth of real estate, paying mortgage, taxes and maintenance.

One good friend confided that he pays $40K a year in landscaping alone at just one house.

Their attitude is "I can afford it"; the reality is they can't. We've seen many of these guys crash and burn over the past few years... "We're downsizing"

 

[rayinpenn]

Sitting here in my mortgage free, 3000 sq ft suburban home, in the great neighborhood It is too easy to talk about those “spenders”. Yeah I grew up poorer than a church mouse.. It wasn’t good -trust me. The stress was thick enough to cut with a knife. I never felt in control; My families lack of money ruled our lives. Thank god Somehow somewhere I got the notion that education would change all that. Of course it did and I still believe in the system. I recognize there were 2 other factors,
1. Opportunity: I lived a train ride away from NYC where opportunity abounds
2. Discipline: I learned to save first and the Mrs is a very good economizer

Maybe I feel for those PC to PC folks out there because I know what it is like to live waiting for the “next shoe to drop”.

It seems to me there are 3 types of people:
<u>Unfortunate Circumstance</u>
Today, sitting on the pile I never for a minute take for granted where we came from. You want to know what I worry about: The number one cause of bankrupty I believe is still medical expenses. Anyone can get sick. Obamacare has had a beneficial impact, Personal bankruptcies are down by 60% since ACAs enactment- a good economy and some bankrupty reforms also helped.
Of course there’s many ways for things to go wrong: the one factory town where the factory closed down or a changing economy etc.,. Just plain bad luck.

<u>Shiny Red Truck Syndrome</u>
Consumerism they’ve been sucked in. Credit Card debt, etc. They have a good jobs but never seem to get ahead.

<u>The Savers</u>
They find a way to save 20% or more of their salary and invest it. They live frugally and have a sense of the difference between need and want.

<b>I wonder what are the percentages of the population 10/70/20 ? That’s the big question.<b>

 

[Amethyst]

There you go. Ancillary expenses and upkeep ruin everything for the almost-rich.

One good friend confided that he pays $40K a year in landscaping alone at just one house.

We've seen many of these guys crash and burn over the past few years... "We're downsizing"

Downsizing, yeah, that's the ticket. They're just putting a popular spin on it to avoid humiliation

 

[USGrant1962]

DW and I were talking about this the other day when there was a 'news' story on the 10pm local local channel stating how this family was already having trouble paying the bills - due to the federal furlough and it was only a couple of days into it....they hadn't even missed a paycheck yet. It was eye opening and sad at the same time.

Living in the DC area, we have been inundated with these stories - and you are right, no one has missed a paycheck yet. The federal pay cycle is two weeks.

I'm not saying some folks won't have problems, just that the click-bait media is pretending that the impacts have already been felt.

Today, sitting on the pile I never for a minute take for granted where we came from. You want to know what I worry about: The number one cause of bankrupty I believe is still medical expenses. Anyone can get sick. Obamacare has had a beneficial impact, Personal bankruptcies are down by 60% since ACAs enactment- a good economy and some bankrupty reforms also helped.

The >50% number is a myth created for political purposes. Research the origin study - they basically counted anyone in bankruptcy with a medical bill as "caused" by the medical bill. Except that one study, essentially every other non-political analysis of personal bankruptcy I've found says consumer debt is and always has been the primary cause.

The 60% decline in bankruptcy you are talking about is the recovery from the Great Recession. Bankruptcies peaked in 2010 and declined sharply through 2014, as they always do in recessions. This had little to nothing to do with ACA, which didn't kick in until 2014.

https://tradingeconomics.com/united-states/bankruptcies


EDIT - clarified >50% from Warren study versus 60% decline in bankruptcy.

 

[street]

I posted earlier about how I can see why so many live PC to PC.
Looking back at my years going to college and don't believe even then that I loved PC to PC. I supported my own college while working just about full time, while in college. I was young out of HS and seemed to pay for school and for all the other activities a college kid does. I was careful on what I spent but I never lived PC to PC and had money in the bank and my pocket.

Not to belittle anyone but some just don't try hard enough, to make it happen. IMO

 

[rayinpenn]

<b>Ancillary expenses and upkeep ruin everything for the almost-rich.</b>

When you aren’t crushing my atrocious spelling and typos you can be funny. But on a more serious note there’s a soup kitchen across the street from the old job (wow feels good saying that). Anyway ‘conspicuous consumption’ just fells wrong. $40K annually on landscaping- awful.

 

[rayinpenn]

<b>
USGrant1962
The 60% decline in bankruptcy you are talking about is the recovery from the Great Recession. Bankruptcies peaked in 2010 and declined sharply through 2014, as they always do in recessions. This had little to nothing to do with ACA, which didn't kick in until 2014.
</b>

Respectfully Take another look.. are you perhaps confusing Personal Bankruptcies vs Corporate Bankruptcy?

https://www.consumerreports.org/personal-bankruptcy/how-the-aca-drove-down-personal-bankruptcy/

 

[pacergal]

There were times early marriage and career when money was extremely tight, however, we always put some $ in the savings every paycheck. After bills were paid and groceries bought, sometimes we only had less than $50 to last until the next paycheck. I remember many times writing "bad checks" at the grocery store on Saturday, as the banks weren't open to process them until Monday! Someone could say that was PC to PC I guess. But we always had something saved for emergencies and towards retirement.

 

[Rianne]

Miser:
"A miser is a person who is reluctant to spend, sometimes to the point of forgoing even basic comforts and some necessities, in order to hoard money or other possessions." Wikipedia

Why does this definition using the term "hoard" seem negative to me? Why not use the term "save" which makes me feel better, smarter.

Just like "cheap" "scrooge" "tightwad" "penny-pincher" all derogatory terms that irritate the crap out of me.

This Payless Shoe prank is the best ever and makes big spenders look stupid, it's about time!
https://www.washingtonpost.com/busi...g-shoes/?noredirect=on&utm_term=.77f1ffc13f43

 

[lemming]

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.

One of the saddest stories I remember(from the Washington post) was a homeless dad with a toddler-sleeping in the shelters. He would buy a single cigarette and a single diaper from the corner store. Costs twice/three times as much that day but all he could pull together
Always confused me when people would go out on the town on payday and be broke for the days before. I never felt like I had any extra money on payday.

 

[USGrant1962]

<b>
USGrant1962
The 60% decline in bankruptcy you are talking about is the recovery from the Great Recession. Bankruptcies peaked in 2010 and declined sharply through 2014, as they always do in recessions. This had little to nothing to do with ACA, which didn't kick in until 2014.
</b>

Respectfully Take another look.. are you perhaps confusing Personal Bankruptcies vs Corporate Bankruptcy?

https://www.consumerreports.org/personal-bankruptcy/how-the-aca-drove-down-personal-bankruptcy/

Good catch, I missed that the curve I linked was businesses. OTOH, the curves are almost identical, so I guess ACA cured business bankruptcies too. Except that CR omitted pre-recession numbers - I wonder why?

Correlation =/= causation.

 

[youbet]

Miser:
"A miser is a person who is reluctant to spend, sometimes to the point of forgoing even basic comforts and some necessities, in order to hoard money or other possessions." Wikipedia

Why does this definition using the term "hoard" seem negative to me? Why not use the term "save" which makes me feel better, smarter.

Just like "cheap" "scrooge" "tightwad" "penny-pincher" all derogatory terms that irritate the crap out of me.

This Payless Shoe prank is the best ever and makes big spenders look stupid, it's about time!
https://www.washingtonpost.com/busi...g-shoes/?noredirect=on&utm_term=.77f1ffc13f43

It's all relative Rianne........

I feel differently than you about spending. Probably I just get less satisfaction from denying myself some particular example of consumption than you, and that's OK. Everyone is different in that regard. When I can afford to expend resources on an item or an activity that will increase life's pleasure for myself or a loved one, I do. Like most folks, I have to prioritize consumption activity based on a hierarchy of marginal utilities particular to me. I'm far from being able to afford all the activities and things I'd like. But compared to the ultra frugal folks, I'm a spender.

Obviously, terms like "miser" or "hoarder" are relative. So is "spender."

 

[Rianne]

It's all relative Rianne........

I feel differently than you about spending. Probably I just get less satisfaction from denying myself some particular example of consumption than you, and that's OK. Everyone is different in that regard. When I can afford to expend resources on an item or an activity that will increase life's pleasure for myself or a loved one, I do. Like most folks, I have to prioritize consumption activity based on a hierarchy of marginal utilities particular to me. I'm far from being able to afford all the activities and things I'd like. But compared to the ultra frugal folks, I'm a spender.

Obviously, terms like "miser" or "hoarder" are relative. So is "spender."

You hardly seem like the type of person who spends $600 on a pair of shoes. Affording to be generous is a good quality, but you can afford it. When we go out to dinner with family, my DB thinks we're cheap if we don't want to spend $200 on a bottle of wine. My issue is the psychology behind spending. I can't tell the difference if someone is wearing Polo or Walmart and I just don't get the need to feel better about yourself if you spend more on something.