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Old 06-01-2015, 04:15 PM   #21
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Originally Posted by Independent View Post
Lots of people live paycheck to paycheck. Some of them complain. Some have actually set up 401k deductions, but then spend the rest of the paycheck and and complain and don't mention that the 401k account is growing.
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I think that's a pretty good description of how the middle 60% of society lives. Saving a little through 401k or pension deductions, maybe having a month's worth of expenses in the bank, but otherwise living paycheck to paycheck. It's how you get to age 65, retire with $100k or so plus SS (or maybe a pension).
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Old 06-01-2015, 04:38 PM   #22
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I'd estimate close to half of my friends my age (I'm 53) are cheque to cheque or have no savings. I even know 2 people who have a mortgage larger than it was a decade ago, even though they haven't moved. On a good note, most of my immediate family is good with their money, and one of my close friends is debt free in his early 40's and looking at ER.

Another friend is about to make a very stupid financial decision (he's made several in the past) and nothing anyone can say will change his mind. He is 5 years away from an unreduced govt. COLA pension and is retiring early and taking a 25% penalty. The problem is that he has a large 30-year mortgage at age 52 and lives cheque to cheque. His "plan" is to work part time to make up the difference. Unfortunately, he doesn't grasp that to make up the difference he'll have to put in about 30 hours a week at minimum wage with none of the generous benefits he currently enjoys. If he goes through with it, I expect him to eventually lose his house.
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Old 06-01-2015, 05:06 PM   #23
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Ron White has it nailed....


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Old 06-01-2015, 05:21 PM   #24
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As I see it, these people and others like them, regardless of their chronological ages or their jobs/professions, are children........and should not run with pencils.
Couldn't agree more.
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Old 06-01-2015, 05:53 PM   #25
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I'm with Fuego on this. I avoid these folks IRL and on FB, so I don't get a lot of it. I did mention a cousin who put up a funding page for help moving, which just appalled me, but I could easily ignore it when my aunt posted a link to it.

My clueless friends I do feel a bit sorrier for, and do what I can to help. Most of them will be okay, but will need to work to FRA or beyond.

I'm heartened by the few, especially the younger ones, who really get being smart with money, and I devote a lot of time and energy to helping them out.
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Old 06-01-2015, 06:41 PM   #26
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Are they typical or outliers?
In the US? I reckon paycheck to paycheck with a mountain of credit card debt is pretty typical although your example might be a bit too extreme. I know a lot of my mom's co-workers who are making the same as her but sometimes have to borrow money for lunch. Now if they'd brown bag lunches instead of eating out 3 times a day (at an average of $10-15/meal), they probably wouldn't have this problem.

Now my co-workers on the other hand, a number of them are 1st generation Chinese and very, very, very frugal. I wouldn't be at all surprised if they have millions stashed in the bank. One commonality, they all paid or are paying for their children's college (no student loans) and a number of those children are now doctors or studying to be one.
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Old 06-01-2015, 06:57 PM   #27
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In the US? I reckon paycheck to paycheck with a mountain of credit card debt is pretty typical although your example might be a bit too extreme. I know a lot of my mom's co-workers who are making the same as her but sometimes have to borrow money for lunch.
SIL works with people who make over $1 million a year. Almost every few days before payday, they're bumming $50 from her for lunch.

They always pay her right back, but it does imply that they don't even have $100 at the ATM stashed away for cash purchases.
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Old 06-02-2015, 01:03 AM   #28
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SIL works with people who make over $1 million a year. Almost every few days before payday, they're bumming $50 from her for lunch.

They always pay her right back, but it does imply that they don't even have $100 at the ATM stashed away for cash purchases.
I work with a woman whose job grade is two grades higher than mine, so she earns substantially more than I do, although neither of us earns a million a year! We are very much middle income earners. Like me, she is single, lives alone (no second income), and is in her late 50's. A few weeks ago she asked me in a panicked voice on a Friday afternoon "will we be paid on Monday?" I was surprised by the urgency in her voice. I replied that yes, Monday was payday, and without thinking I asked her why she urgently needed to know. Her response was "oh thank goodness, because as soon as the money hits my hand I spend it all." I opened my mouth to reply, then bit my tongue, realizing that I had to work with this person for a few more years. I walked away wondering how on earth she can sleep at night.
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Old 06-02-2015, 02:23 AM   #29
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SIL works with people who make over $1 million a year. Almost every few days before payday, they're bumming $50 from her for lunch.

They always pay her right back, but it does imply that they don't even have $100 at the ATM stashed away for cash purchases.
I feel distinctly uncomfortable if I don't have at least a $1000 buffer in the checking account. Can't imagine not having even $100 on there when nearing payday - specially not at that salary given their expenses are probably a lot higher than mine requiring a bigger buffer.
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Old 06-02-2015, 08:16 AM   #30
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I must admit, I don't know any people like the OP describes. Of course, as I am 60, these folks are considerably younger than I. My peer group of friends and relatives are remarkably similar to myself: debt free, mortgage free, fairly conservative in dress and outward behavior and any luxuries they allow themselves they can well afford. I suppose if I got out more or participated in social media I might broaden my horizons a bit.
My experience parallels yours. We do get out quite a bit but tend to spend time with people who share our values, resources, and interests. Now family, that's a whole different thing.
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Old 06-02-2015, 08:16 AM   #31
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Well sounds like some familiar stories. I guess part of me is surprised at the personal information people will share on FB.
I admit that I almost blocked the one that started the "fund me" page for her dog's vet bills. I was shocked at how many people contributed. And within weeks she was posting pictures of new outfits, hairstyles, husband's toys from Cabellas, etcetera. I would have felt extremely used if I had contributed.
I guess we are all wired a bit differently 😳


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Old 06-02-2015, 09:25 AM   #32
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I feel distinctly uncomfortable if I don't have at least a $1000 buffer in the checking account. Can't imagine not having even $100 on there when nearing payday - specially not at that salary given their expenses are probably a lot higher than mine requiring a bigger buffer.
+1. I can't sleep at night if I do not have at least 50K in my savings account…been through 2000 and 2008 market crash, lost job in 2008 and that surplus was God's grace(did not force me to sell anything until I found an other job three months later).
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Old 06-02-2015, 09:54 AM   #33
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I think that makes her a-typical.

Lots of people live paycheck to paycheck. Some of them complain. Some have actually set up 401k deductions, but then spend the rest of the paycheck and and complain and don't mention that the 401k account is growing.

But, I think looking for donations from friends and strangers for living expenses is a ways out of the norm.
I think it depends on "how" you're living paycheck to paycheck, IMO.

Technically, I live fairly "paycheck to paycheck" as Independent describes it above. But, that is a choice I make, because I plow 15% of my income into my 401K. So, I have maybe $300-400 (if that, probably more like $200) additional cash left over every month, but I am putting >$900 a month in my 401K.

I have an emergency/savings account with about 2-3 months expenses in it that I use to pay for bigger ticket items, like vacations and car insurance. That account balance slowly declines (not fully to $0) every year, and I replenish it with my annual bonus in January, and bank/invest the rest of my annual bonus that I don't need in liquid cash.

So it appears I live paycheck to paycheck, but I really don't.
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Old 06-02-2015, 09:55 AM   #34
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They don't behave like anyone I know. But then nobody I know uses facebook.

My take is that different people have different needs and their money and time flow accordingly. Some crave attention of any sort while others go to great lengths to avoid being seen as irresponsible, so some spend more on drama than security. I think I have an idea which type facebook attracts.
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Old 06-02-2015, 09:58 AM   #35
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They post on FB about being broke and living paycheck to paycheck. Then the following week will post about a trip, or new toy or pet or new tattoo. One posted a couple of weeks ago asking FB friends for ideas how to get out of debt. (Last year she set up a "fund me" account to pay for some vet bills for one of her dogs). Anyway, two weeks later she is posting pictures of her new acrylic nails and spray tan to prep for upcoming trip to CA. One just quit her PT waitress job (too hard) and lamented about the impact to family income. Last week she posted a picture of a new tattoo (probably her fourth one...and they aren't small ones) and today a picture of a lake kayak she bought at a sporting good store.
I have always felt that this kind of behavior (which is very common in our society, as others have said) is due to the "entitlement" culture in which we live. It seems like many people have the attitude that they somehow deserve and should have the best of everything on nearly a daily basis, regardless of their ability to pay for those things. There is a disconnect between the notions of "want", "need", and "deserve" (e.g. the often-heard refrain "I deserve a little pampering"), and there is definitely a disconnect between "I want" and "I can afford". Maybe these people feel like someone with a kind heart will always be there to bail them out if things get really bad financially, so what real risk is there to constantly overspending and living on the edge? Ultimately, the government would step in with unemployment or some other welfare-type assistance, so the (perceived) risks are not that awful, right? And after all, "I deserve a little help" because I paid into the system for all those years, right? Definitely not the sort of mentality I have ever subscribed to, but I really believe that many people go blithely through life with these types of attitudes driving their behaviors.

One of my favorites lines from The Sopranos touched directly on this subject. Tony is in a therapy session with Dr. Melfi, and he says: "You know we’re the only country in the world where the pursuit of happiness is guaranteed in writing? Can you believe that? A bunch of f***ing spoiled brats. Where’s my happiness, then?" Dr. Melfi points out that it's just the pursuit that's guaranteed, not the happiness itself. But I think Tony is just articulating the mindset of all those people who spend every last cent of their income on every indulgence that strikes their fancy.
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Old 06-02-2015, 10:06 AM   #36
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SIL works with people who make over $1 million a year. Almost every few days before payday, they're bumming $50 from her for lunch.

They always pay her right back, but it does imply that they don't even have $100 at the ATM stashed away for cash purchases.
$50 for lunch?... If that's typical - that's a part of the problem. (Presumably these are workday lunches so not a lot of pricey drinks.)
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Old 06-02-2015, 10:56 AM   #37
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I admit I never knew anyone who lived like that (paycheck to paycheck) until I met my ladyfriend 10 years ago. She's still pretty thrifty, she had some bad breaks in the years before she met me and made some bad financial decisions in those years. She undertook a big sacrifice (financial and otherwise) to relocate from her home state to live near me in NY, and she should not bear all of those costs by herself. I have paid down some of her CC debt over the years (some of it in loans she is paying me back) which is really peanuts to me (2% of my NW over the last 10 years pays off 75% of her CC debt).


My best friend (the "snake-bit" one I have written about over the years) has always been a LBYM type but until a few years ago didn't have much money. He, single, no kids, and my age (52) was doing some good things such as contributing to a 457(b) plan and funding a ROTH IRA. But when his remaining parent (mother) tragically died in a car wreck in 2012, he and his sister (who is married with 2 kids) inherited a boatload of money, he could now vastly improve his financial situation. He paid off the mortgage on a co-op apartment he bought less than a year earlier, lowering his monthly expenses. He could now live on half his salary so he upped his 457b contributions to 50% of his salary, lowering his tax bill. When he turned 50 in 2013, he was able to boost his 457b and ROTH IRA contributions to the catch-up limits. This still left him a large portfolio from the inheritance which has since exceeded $1M. I joked to him recently that he will exceed my NW soon because he is still working (he likes working but he has asked me about ERing before he turns 60).


He has boosted his spending a bit on some out-of-town trips but they represent a small part of his growing NW. If he wants to have some fun, let him go for it. Another way he realized the power and usefulness of having a lot of money came when his car got totaled in a wreck last year. He needed $25k so he could buy a new one while he waited for the insurance settlement (it was the other driver's fault). With a few point-and-clocks, the money magically appeared in his local bank account and he had his new car without needing a loan. When the settlement check arrived, he deposited and reinvested the money just as easily. No muss, no fuss. He liked that easy process.


Very few other people have I been friends with long enough to know their finances. My best friend at my old job had some troubled finances but has been digging himself out of a big hole he was before I knew him. My brother owns his own business and makes more money than I ever did. He has a big house and a big mortgage, too. We don't discuss finances but he curious about my ER. My dad has been a widower for nearly 20 years but has been living the same comfortable lifestyle he always has, now with the help of a FA through Ameriprise. She knows I review his monthly statements from time to time so if I see anything suspicious, I will pipe up.


I am not on FB, having no interest in what Betty White once described as a "huge waste of time." This keeps me a little detached from some relatives (who now live out of town) but they are doing okay AFAIK.


So this is why I am still a bit stunned to read all of these stories about those who foolishly spend every dollar they earn even if they make a good salary, then beg others for money in one way or another. It makes for entertaining, if sad, stories about people who live their lives this way. As others have mentioned, a lot depends on how one was raised. My mother (deceased for nearly 20 years) oversaw the family's finances and I helped her keep things organized and learned from that. She kept the family debt under control and as a result they bought a new car with nearly all cash back in the 1970s. Good lessons for this teenager to learn.
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Old 06-02-2015, 11:05 AM   #38
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I have always felt that this kind of behavior (which is very common in our society, as others have said) is due to the "entitlement" culture in which we live. It seems like many people have the attitude that they somehow deserve and should have the best of everything on nearly a daily basis, regardless of their ability to pay for those things. There is a disconnect between the notions of "want", "need", and "deserve" (e.g. the often-heard refrain "I deserve a little pampering"), and there is definitely a disconnect between "I want" and "I can afford".
I think this hits the nail right on the head.

To the OP's question, I don't know if those 2 people were typical, but at minimum they are not-uncommon. I haven't seen them in a while, but feedthepig.org had several commercials touting LBYM in a humorous way. I recall one commercial in particular showing a young couple taking a hot air balloon ride while chowing down lobsters, and complaining how they are just unable to save money.
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Old 06-02-2015, 11:27 AM   #39
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I admit that I almost blocked the one that started the "fund me" page for her dog's vet bills. I was shocked at how many people contributed. And within weeks she was posting pictures of new outfits, hairstyles, husband's toys from Cabellas, etcetera. I would have felt extremely used if I had contributed.
I guess we are all wired a bit differently
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Old 06-02-2015, 05:12 PM   #40
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I think it depends on "how" you're living paycheck to paycheck, IMO.

Technically, I live fairly "paycheck to paycheck" as Independent describes it above.... So it appears I live paycheck to paycheck, but I really don't.
Exactly this. We also live paycheck-to-paycheck... after we take 40% of it and put it into retirement and investment accounts.

Then again, maybe we don't because we also know that if we became truly hard-up for cash on hand, we'd cut some other discretionary expenses (i.e. eating out, satellite TV, maid help, travel budget) before we reduced our savings rate. I would guess that some folks who live similarly paycheck-to-paycheck with respect to making 401K contributions, etc., would rather reduce their savings rate than their discretionary spending.
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