Poll:Living paycheck to paycheck

[nash031]

I checked "never" but in reality, of course I have. In college, I had a small stipend from a ROTC scholarship in addition to my wages and tips as a server/bartender at a local restaurant. I wasn't saving anything then because it was all going to feed me.

Since graduation, I've saved at least 10% per year and usually much more than that.

 

[Mdlerth]

The folks I feel sorry for (yet wonder about their spending habits) are 40 and 50 year olds that go for years paycheck to paycheck.

DW and I just shake our heads in wonder at such people too.

That would have been me. I admit it: I'm a slow learner. Let 20 years slip by before I took control of my own destiny. Two decades in the salt mines and I had essentially nada to show for it.

But maybe my example might be reassuring to other folks who didn't get an early start. The past is past, and even at age 42 it's not too late to get serious.

 

[davismills]

My Dad wrote me a check for $250.00 upon HS graduation and said it's the best I can do toward your dream of a Masters degree. Worked my a%^ off and started a business refurbishing apartments when tenants moved out. Sold the business upon graduation with no college debts.

My poor father sold some land in my thirtieth year and gave me a check for 50K. He said it was my college money. By then I had my Master's degree.

Never forgot that lesson, nor my wise father.

 

[Red Badger]

Wonderful insights here.

Here's mine.

After high school, I wandered aimlessly in one low skill job to the next. Then during a recessionary period, I lost my job. Nothing turned up. Came to my apartment after beating the streets looking for work; lo and behold, my meager possessions were sitting in the snow bank. So I loaded them in my s*&t - box dodge and said dodge was my new home.

In Minnesota.
In December.
Until February.

At least I had a vehicle that kept me out of the wind. But if you want to know if I was "comfy," climb in your freezer and try taking a nap.

Once I got my feet back under me, I still screwed up regularly until I met my DW. She can squeeze and nickle so hard it turns into a dime. While I was almost always the bread winner, she was the bread saver.

We had a tough slog in the early 90's, but survived that and enjoyed upward mobility (but NOT lifestyle inflation) to the point where retirement (very, very soon) looks promising and secure.

 

[CRLLS]

When we started out, there was nothing left after paying bills for savings. I had a handwritten payment schedule and sometimes had to not overspend this paycheck because some of it had to be used for a bill coming in 3 weeks. Later, in one month we upgraded to a bigger house and I changed jobs. There was about a year when there was nothing left after paying our bills and contributing to our 401K. And then there was the time when we were both working and maxing out our retirement contributions. We never didn't meet pay our bills though.

I'm not sure what the definition of "paycheck to paycheck" is. Is it income barely meets expenses? If so then I've been doing that for the last 8 years. My PT job doesn't pay all the expenses. DW retired over a year ago. We didn't reduce our living style, we just tap into the cash saved. It is all part of the "retirement" plan. That will end this year when I finally stop the PT job and we live 100% off the savings until the following year when SS starts for DW and I start the WD process from the 401K's/IRA's

DM and DF had times that were tight as DF got paid once a month. DM had a food allowance. At the end of the month there were sometimes "depression" meals. Spaghetti with a bit of ground beef, or stewed tomatoes on bread.

 

[ikubak]

Almost always had savings but there probably was some time in college or right after college when I either lived paycheck to paycheck or didn't even get a paycheck.

 

[EastWest Gal]

The best thing I did was get engaged to a musician, someone I loved for years, early in med school years. I knew my income potential was our rock. For medical school I took out a loan from a wealthy relative rather than a bank, with a lower interest rate, and as it turned out, a good will gift in my future. Fiancé, now DH of 33 years, agreed to work however he could and try to make it in music until we started a family then would stay at home if needed. So while at school, living far apart, I borrowed what I thought I would need each year for everything, and calculated carefully. My parents helped by giving me a credit card for gas (dad worked for Chevron) and a Mastercard on their account. I honored their trust in me and only used it for clothing at the student store--mostly Speedo swimsuits for my workouts, LOL. I was LBYM to save up for our wedding. I saved 10% of my loan money, and paid for 90% of our wedding. My parents helped a little. 30:20 hindsight, they should have offered more.

We lived paycheck to paycheck for the first couple of years during residency. My rich aunt was so proud of my accomplishments that as a wedding present, she gifted us all of the accrued interest, lowering my loan payment, which did not start until so had enough to survive:

We never asked our parents for money but needed extra so we wouldn't be eating ramen 3x/day that first year, and had a rent check problem the first two months due to me not being paid until 5 weeks after I started residency. We borrowed from our best man in June. We paid him off in November. I also had the benefit of access to free food at work until finishing residency. We did not make "minimum" payments" because AmEx did not allow this and that's all we had. We didn't use credit cards much but early on saw the wisdom of paying in full each month.

My last year in college my sister and I had to get out of our parents' house. Our parents' drinking and arguing hit a peak and interfered with our studies. We both had lived at home up to that point. (My sister was 1 year ahead of me but I fast tracked out of high school in 3 years so we graduated from college the same day--UC Berkeley). Despite the difficulties, the folks understood their imperfections and gave us access to a car and food money and paid our college expenses in full. We assisted a 91 year old woman at night in exchange for a back room in her home, 3 miles from campus. Personally, I kept my food budget under $15-20 per week with copious tuna casserole, PB sandwiches and frozen spinach.

Heck, my parents started stock funds to pay for our college but then never gave us access to them. I never could figure that out. They could have cashed them out for me for medical school but never did. It would have cut my loan by 30%. Eventually they signed them over to us. By the time I had access mine was worth about $15K. I went through 3 years of underemployment in 2004-2007 and cashed the thing out later, which was useful.

BTW my parents partially funded my ER, so I am grateful for all the experience.

I still like tuna and frozen spinach.

 

[Koolau]

I'm not sure what the definition of "paycheck to paycheck" is. Is it income barely meets expenses?

I think the technical definition means that missing one paycheck (aka losing your paycheck through lay-off or j*b loss.) means you can no longer pay bills. You have no emergency fund to tide you over to a new j*b or return to w*rk following a lay off. Or, more to the point, spending virtually all of every pay check every month and not saving anything against that day when the pay check may stop for a while. YMMV

 

[Luck_Club]

- I'm more comfortable being "broke" than having cash stacked up doing nothing.

Tell me about it. I've lived my entire life on a self inflicted sense of scarcity. It is finally paying off, since I now have stacks of cash doing nothing. Just can't find a good place to invest it.

 

[HFWR]

For a while in the late 70s-early 80s, I was too poor to pay attention...

While I was rebelling against the man (i.e. partying) instead of finishing my degree, we had a second oil shock, the rust belt started rusting, inflation took off, and the decent wage industrial jobs dried up. To add insult to injury, I made a suboptimal choice for a spouse. Endured evictions, utility "interruptions", broke down vehicles, collection agencies, etc. Finally finished a degree, and got a real j*b, though, unfortunately, the financial woes continued for several more years. The marriage finally/mercifully ended, though it took me two or three years to clean up the rubble...

 

[Rosie]

Probably when I was in grad school and while I was a postdoc, but after that, no.

 

[cooch96]

I voted never, but I reckon I did for most of my childhood. it wasn't until well into my teens when I realized how relatively poor we were. I had always just assumed DM was a puritanical cheapskate. Well, I suppose I wasn't wrong: Puritanical by breeding; cheapskate by necessity.

 

[rayinpenn]

In my youth, we lived on the edge of disaster always waiting for the next shoe to drop. The cars had bad tires, the heat down low to stretch the oil and the franks and beans for dinner all too often. The stress on my Mom wore her down and affected her health. I always felt at the mercy of the next problem to be paid for with money we didn't have.

A graduate degree, a desire to be the master of my own destiny and picking the right frugal partner changed all that. Paid off all but the mortgage in a couple years. Religiously saved first and LBYM ....

Funny when I hear about bad financial choices or frivolous spending I can't help but wonder. Why haven't they figured it out? Live simple, live debt free, live stress free.

 

[marko]

Now that I think of it, in my very first job there were a bunch of (Bowtied) Boston Brahmins working there who would never cash their paychecks!

It was some sort of badge of honor to get called in by accounting and be told that they had to go into their desk draw, clean out and cash 18 months worth of paychecks because they were messing up the balance sheet.

 

[Koolau]

<SNIP>

Funny when I hear about bad financial choices or frivolous spending I can't help but wonder. Why haven't they figured it out? Live simple, live debt free, live stress free.

Yeah, I've known folks who made as much or more than I did whose worry was NOT how to pay for the toys they already owed on but how could they finagle the CC to get the next new thing. A close friend, now 73 revealed recently he is in debt $400K. He has virtually zero assets (house number 1 is remortgaged to the max and being sold as "rent to own" - not quite covering his payments to the bank). New house has no equity at all. 3 new cars are leased. He's already gone through CC write-down (saved him from actually filing bankruptcy). During his life time he has owned (well, that's debatable. "Had" would be more accurate) over 100 street cars. Additionally, he's had several boats, wave runners, motorcycles, 3-wheelers, 4-wheelers, mini-monster trucks, race cars (mud racers, drag cars, hot rods, etc.) Technically he's been bankrupt for years. But, he and his wife receive good SS plus his pension. He's lived like this his entire adult life. He said recently he's in better shape than he's been in years. Go figure!

 

[ESRwannabe]

I have never had to live paycheck to paycheck because I simply adjust my standard of living so that it is significantly lower than my income. In college I worked three part-time jobs, had no car, no health insurance, I shared a 2-bedroom apt, and went without AC and heat. No cable tv or other luxuries. Life consisted of go to school, work, eat, sleep, sh*t. I graduated in 5 years with a comp sci degree, no debts, and around $50k in cash.

Now, I am 41, rent, no kids, not married. I have worked in IT for about 20 years.

I spend around $2k per month on living expenses (overall around $30k per year). Close to half of that is rent. W2 income around $65k. Take home is around $4k, and municipal bond CEF interest is around $1.5k per month (around $330k principal).

Max out 401k and Roth IRA most of the time. Extra money goes into a brokerage account and is primarily in municipal bond CEFs. I have a great state gov pension, 16+ years and counting vested so far (3% per year COLA). Also usually keep around one year of living expenses in cash (not a big deal when it is only $24k).

Most likely I will retire at 55 when I can start collecting on the pension. Less likely I will ESR at 45+ instead and work part-time.

 

[Starsky]

I found my early paychecks a few weeks ago as I was cleaning out the garage. For the first five years of w**k ('78-"83) I made between $4 and $6 an hour - $140ish after taxes for a 40 hour week [working a union job!] - while going to school. I remember being down to my last $5 many times.

It's hard to imagine not having to live paycheck to paycheck as a young adult.

 

[daylatedollarshort]

DH and I both came from blue collar households and spending habits but had two white collar, tech job incomes as adults, so we have always lived below our means and been good savers.

 

[Lawrence of Suburbia]

I have lived p-2-p all my life. Plus, at my advanced age, I'm working a minimum-wage job. I am not a skilled person, apart from guitar playing (not an income generator at the moment.)

Oh, and most of that time I've been putting 10% or more (it's 20% now) into 401ks, IRAs, Roth, 403b, etc. Enforced poverty, so as to eventually stop. 14 months and 6 days, not that I'm counting.

 

[NW-Bound]

I am living withdrawal-to-withdrawal right now, from after-tax as well as deferred accounts.

 

[Meadbh]

I am living withdrawal-to-withdrawal right now, from after-tax as well as deferred accounts.

I know what you mean. Me too. But at least we get to decide the amount of the withdrawal, within SWR of course.

 

[RetireAge50]

I am living withdrawal-to-withdrawal right now, from after-tax as well as deferred accounts.

Perfect plan.

 

[FIREmenow]

She can squeeze and nickle so hard it turns into a dime.

LOL!

 

[Idnar7]

I had two kids and a STAHW. I new when every CC cleared. Some months we were running short and had to use our gas card to buy bread and milk at the gas station. The low point was going to the store and buying a $3 six-pack only to have my CC declined. Eventually with a relocation to a tax-free state and a raise, things got better.

 

[GalaxyBoy]

Only the first few months out of school. Didn't have a dime in my checking account. The company gave me an allowance for lodging and I could get cash advances for expenses. I recall the Holiday Inn was $41.80 per night and the allowance was $42.00 (this was suburban Maryland outside D.C. so you can see how long ago that was). I ate the free tacos from the happy hour buffet so much I spent my days in the john.

I got a rented house with three others. But being an engineer I quickly saved enough to get the necessities (bed one month, vacuum cleaner the next, etc.) until I quickly started saving in an IRA and the rest is history.