How many Americans are really living Paycheck to Paycheck?

[Teacher Terry]

Senator, you personally could have a ton of medical conditions that are expensive. Like my extremely healthy friend at 56 needed a heart transplant. The last person I ever thought that would happen to. Some on the forum lack a empathy gene.

 

[marko]

+1

My guess is that less than 10% of the paycheck to paycheck crowd has that as a reason for being in that situation. Children are a choice, and by definition the medical bills associated with them.

Giving to a family member is also a choice.

But you make a great point as to why people do not have any leftover money. They view optional expenditures as obligations.

 

[Tiger8693]

Senator, you personally could have a ton of medical conditions that are expensive. Like my extremely healthy friend at 56 needed a heart transplant. The last person I ever thought that would happen to. Some on the forum lack a empathy gene.

I think some on this forum have a hard time accepting that others don't always agree with their views. I see nothing that says Senator doesn't have empathy for someone such as your friend, just that he doesn't think that is the driver for the MAJORITY of people in the PtP situation.

That doesn't make him a bad person, just as your opinion doesn't make you the virtuous person. It just means there are different thoughts from each person.

 

[GrayHare]

"After the payments on two new SUVs, my family phone plan, the home entertainment system, GaryHare jr's private school, plus putting cash into my 401k and IRA, there's almost nothing left. Yes, I'm living paycheck to paycheck!"

 

[Gumby]

I think some on this forum have a hard time accepting that others don't always agree with their views. I see nothing that says Senator doesn't have empathy for someone such as your friend, just that he doesn't think that is the driver for the MAJORITY of people in the PtP situation.

That doesn't make him a bad person, just as your opinion doesn't make you the virtuous person. It just means there are different thoughts from each person.

I accept that there are others who don't agree with me, but they're just wrong.

Seriously, though, I think it is usually better to just address what people actually say rather than speculate about what their hidden intent may be or what may be in their heart. I know it's a difficult thing to do, as the words we write are the only thing the rest of the board has to judge our character, given that most of us have never met in person. I struggle with it all the time, and am not always successful. But I think if we all tried to give each other the benefit of the doubt, we'd all be happier.

 

[Just_Steve]

LOL we live paycheck to paycheck (Dividend to dividend) as we do not draw from our stash or take SS.

Just trying to insert some humour here.

Me too, pension check to pension check. Three more days until payday.

 

[GenXguy]

My guess is that less than 10% of the paycheck to paycheck crowd has that as a reason for being in that situation.

That's good that you can acknowledge your earlier statement, "It is a choice, and is not a requirement" is incorrect as it often is not a choice, even among some members on this forum.

 

[pjigar]

That's good that you can acknowledge your earlier statement, "It is a choice, and is not a requirement" is incorrect as it often is not a choice, even among some members on this forum.

It's mostly a choice, for most people anyway. Number one reason for financial wreck is medical bill and one can always buy medical insurance to protect from such unexpected situation. Most people are just complacent and try to match social norms. Current social norm, unfortunately, is to leave paycheck to paycheck.

 

[NW-Bound]

My wife just made the payment to the credit card company, to cover the airfare and lodging bills for the upcoming Hawaii family trip that I paid for.

The checking account is running low again. Time to cut myself another pay check.

 

[Senator]

It's mostly a choice, for most people anyway. Number one reason for financial wreck is medical bill and one can always buy medical insurance to protect from such unexpected situation. Most people are just complacent and try to match social norms. Current social norm, unfortunately, is to leave paycheck to paycheck.

Isn't there an out of pocket maximum for healthcare these days? Can you buy better insurance that has a smaller out of pocket?

Can your lifestyle be adjusted if you have more medical bills? Give less (or none like me) to charity. Do not have kids (like me), work an extra job (like me), join the military when you are young (like me), do not go crazy at Christmas or birthdays with gifts (like me), learn about investing (like me), etc.

Senator, you personally could have a ton of medical conditions that are expensive. Like my extremely healthy friend at 56 needed a heart transplant. The last person I ever thought that would happen to. Some on the forum lack a empathy gene.

You are 100% correct, however I could be dead too. Statistics show that the odds of a person at age 56 needing a heart transplant are very rare.

I think some on this forum have a hard time accepting that others don't always agree with their views. I see nothing that says Senator doesn't have empathy for someone such as your friend, just that he doesn't think that is the driver for the MAJORITY of people in the PtP situation.

That doesn't make him a bad person, just as your opinion doesn't make you the virtuous person. It just means there are different thoughts from each person.

100% correct.

My wife just made the payment to the credit card company, to cover the airfare and lodging bills for the upcoming Hawaii family trip that I paid for.

The checking account is running low again. Time to cut myself another pay check.

You are one unfortunate soul. I would guess that others who live paycheck to paycheck have similar issues. Except it may involve hair stylists, nails, fancy phones, alcohol or drug related issues, gambling or similar related follies.

 

[ejman]

Last paycheck was 17 years ago at age 52. I guess I haven't lived since then I do appreciate the luck I've had and realize it played a large part but NOT THE ONLY PART. What I did also had something to do with it. I drove my cars for a minimum of 10 years and another one 20 years, my house was adequate but I never went for the most house I could afford. Camping vacations (with tents) were a lot of fun and really worked as family bonding experiences. I packed a lunch to work all the time, paid off my credit cards at the end of the month yada, yada. All good luck am grateful for.

 

[marko]

+1.
We see the local news do this all the time where, no matter what someone says or how well intentioned an action is, the news will go out and find one little old lady whose adversely impacted.

Yes, there will always be someone in a small percentage with an experience different from the 90% but that shouldn't hinder or change a discussion based upon the experience of the 90%.

Personally, I'm more interested in the 90%'s experience than something in the outliers

.

I accept that there are others who don't agree with me, but they're just wrong.

Seriously, though, I think it is usually better to just address what people actually say rather than speculate about what their hidden intent may be or what may be in their heart. I know it's a difficult thing to do, as the words we write are the only thing the rest of the board has to judge our character, given that most of us have never met in person. I struggle with it all the time, and am not always successful. But I think if we all tried to give each other the benefit of the doubt, we'd all be happier.

 

[gauss]

I think both sides of this discussion can be correct simultaneously with no fallacy involved.

It is possibly true that many live P2P due to their choices.

It could also be true that some people fall to misfortune that others do not experience.

This is not a binary choice.

-gauss
"when all else fails, draw a Venn diagram"

 

[RobbieB]

I have never lived PC to PC and I never will. I've never been broke or had a negative net worth. It's always been onward and upward.

I'm a very lucky guy!

 

[Teacher Terry]

My BF’s 18 year old daughter developed a rare liver disease. She needed a transplant within a year. My friend had great insurance. You have to keep up on all medical bills or they decide you can’t afford to have it due to the cost of medications ,etc. The wait on the West coast was 7 years. It was months in Indiana. She had to put her daughter and boyfriend in a apartment to be available for a transplant. They used all their savings and thought they would have to sell their house. While on the West coast every emergency 4 hour trip to the hospital included hotels in San Fran since our local hospital couldn’t handle complications. All associated costs add up. My DIL had a tennis ball sized tumor on her brain stem despite being 40 and healthy. My son had to live in San Fran for 6 weeks. She couldn’t work for a year. It was a million dollar surgery. Without insurance she would have died because they needed proof of insurance before seeing her. Maybe I just know a lot of unlucky people.

 

[NW-Bound]

My wife just made the payment to the credit card company, to cover the airfare and lodging bills for the upcoming Hawaii family trip that I paid for.

The checking account is running low again. Time to cut myself another pay check.

You are one unfortunate soul. I would guess that others who live paycheck to paycheck have similar issues. Except it may involve hair stylists, nails, fancy phones, alcohol or drug related issues, gambling or similar related follies.

Unfortunate soul?

Instead of joking about this here, I guess I should have bragged in the "Blow dough" thread about picking up the tab to take my 2 grown children and my son-in-law to Hawaii for a family trip.

So far this year, I have spent less than the cash I get for the premium from the covered call options that I wrote on a lark. I am not even talking about the stock dividends and the interest income.

Thought about booking a Panama cruise after this Hawaii trip, which makes it about the Thanksgiving time, but the air travel to/from the cruise port deters me.

I am getting old. I may leave a bit of money behind when I croak, but I don't think that is unfortunate.

 

[Calico]

The vast majority I knew, from 18 to 40+ who lived paycheck-to-paycheck, did so because of expensive car payments, paying for children activities or children in general, expensive habits like smoking, eating out constantly, hobbies, etc.

 

[jollystomper]

I suppose when people are living paycheck to paycheck, this does not mean they don't have at least $50,000 - $200,000 in their retirement savings which they just assume they cannot touch? right ? or maybe they are tempted to borrow some of their 401K savings in real emergencies?

According the study mentioned by this article (https://www.synchronybank.com/blog/median-retirement-savings-by-age/), the median retirement savings amount is a lot less:
Americans in their 20s: $16,000

• Americans in their 30s: $45,000
• Americans in their 40s: $63,000
• Americans in their 50s: $117,000
• Americans in their 60s: $172,000

At certain ages it is easy to see how unexpected things might those living paycheck to paycheck to spend some/all of this amount, if the paycheck gets disrupted.


Certainly there are both unexpected and poorly executed reasons for having to live paycheck to paycheck. I cannot paint a broad brush either way. DW and I have been asked several times to assist folks who had financial troubles by living paycheck to paycheck... we just did our best to assist and discern the root causes, and provide the appropriate type of support for the situation.

 

[pb4uski]

Much like any other 'thing' in life, there is a normal curve. The people living paycheck to paycheck are in the 80%.

It is a choice, and is not a requirement.

That is why there are people making 200K+ or under $50K live paycheck to paycheck. Income doesn't matter, it's attitude.

Absolutely. DD & DSIL are in the former category and DS is in the latter category... but neither of them live paycheck to paycheck... they both have substantial savings.

 

[RetiredGypsy]

Number one reason for financial wreck is medical bill

Is that true?

Of course it's beating a dead horse. If the article had been on obesity and the response for 2,000+ years has been eat less and move more, that horse has been beaten into collagen and glue. Doesn't make the people holding the sticks wrong.

 

[Major Tom]

My wife just made the payment to the credit card company, to cover the airfare and lodging bills for the upcoming Hawaii family trip that I paid for.

The checking account is running low again. Time to cut myself another pay check.

You are one unfortunate soul. I would guess that others who live paycheck to paycheck have similar issues. Except it may involve hair stylists, nails, fancy phones, alcohol or drug related issues, gambling or similar related follies.

NW-Bound has been around here for a long time. Even if you weren't aware of his situation, I'd think that the reference he made to cutting himself another check would have clued you in. This has given me quite a chuckle.

We don't need to feel sorry for NW-Bound. He's doing just fine. Besides - he has that wonderful class B motorhome to escape in if everything goes south!

Talking of which, I was just thinking about my camper van the other day. I live in the SF East Bay which, obviously, is something of an earthquake zone. We're expected to have our kits of emergency supplies ready, "just in case". When I lived in Los Angeles, I had a plastic crate in the closet, with bottles of water, a radio, some batteries, and some other emergency supplies. I also had at least one 5 gallon jug of water at all times. Since moving to the Bay Area 10 years ago, I have not kept an emergency kit. Then it occurred to me - my camper van has a 23 gallon fresh water tank, which I keep sanitized and full (or close to) at all times. The propane tank is also close to full, and there are cooking supplies and canned food in there. I guess my little camper van counts as it's own "emergency go-kit"!

I do need to get a Berkey filter though. Not sure I'd want to drink water straight from the freshwater system in the RV. Many do though.

 

[joeea]

Children are a choice, and by definition the medical bills associated with them.

Wow!

 

[karen1972]

My BF’s 18 year old daughter developed a rare liver disease. She needed a transplant within a year. My friend had great insurance. You have to keep up on all medical bills or they decide you can’t afford to have it due to the cost of medications ,etc. The wait on the West coast was 7 years. It was months in Indiana. She had to put her daughter and boyfriend in a apartment to be available for a transplant. They used all their savings and thought they would have to sell their house. While on the West coast every emergency 4 hour trip to the hospital included hotels in San Fran since our local hospital couldn’t handle complications. All associated costs add up. My DIL had a tennis ball sized tumor on her brain stem despite being 40 and healthy. My son had to live in San Fran for 6 weeks. She couldn’t work for a year. It was a million dollar surgery. Without insurance she would have died because they needed proof of insurance before seeing her. Maybe I just know a lot of unlucky people.

I also know lots of unlucky people and that is why I have a lot of empathy for them. Neighbor got hit by drunk driver in the country, air lift was over $25k (rejected by the insurance company). Cousins kid had an accident which damaged his face when he was 2, his medical bills total over $8M at this point and it happened before lifetime limits was eliminated, so at $1M they became uninsurable. Another cousin was told by all of her covered doctors that she had an incurable disease and was going to die, she found a doctor in Colorado that said he could treat her but of course not covered by insurance, (she was 35, 2 young kids, they had over $3M in investment property), by the time they were done she was healed, but they were bankrupt. My friend was hit by an uninsured motorist, she had permanent nerve damage, her company played some games and hosed her out of long term disability so that left her without a job, without insurance, and no way to work .. it took 3 years to get on disability and she was homeless at that point. And I could go on and on and on.

 

[Senator]

NW-Bound has been around here for a long time. Even if you weren't aware of his situation, I'd think that the reference he made to cutting himself another check would have clued you in. This has given me quite a chuckle.

We don't need to feel sorry for NW-Bound. He's doing just fine. Besides - he has that wonderful class B motorhome to escape in if everything goes south!

I understood his humor, and that prompted my tongue in cheek response...

However, just as many would say NWBound would have plenty to cut back on if it came down to it, I would guess that many who live paycheck to paycheck would have a bunch to cut back on if it came to that.

Otherwise, there would be a financial number that everyone that made more than that number would all have extra, and the ones below would all be skimping.

The fact is there are LBYM folks at every income level, and paycheck to paycheck folks at every income level.

Children are a choice, and by definition the medical bills associated with them.

Wow!

Somehow they are not a choice? From my perspective, they are as much of a choice as buying a dog.

 

[MarieIG]

Since I was a child, I always felt the need to save money; and even when paychecks were small squirreled away some money. (It started with envelopes.)

I admit to having those discretionary expenses (my six kiddos). They were told flat out we would pay for State School but do not even think about us paying for one of the Ivys. Would gift them some money here and there, second-hand reliable vehicles, but again, they were told we were not co-signing for any car loans, etc. I tried to teach them all fiscal responsibility. We had a few financial challenges, but I really think squirreling away a cushion really helped. I also have a thing about not running credit card debt - it must be paid off. Certainly, we could have accrued significantly more savings without those discretionary expenses (a/k/a kiddos), (via both the cash layout and via the decease in my earnings) but we took good care of them, and I'm not complaining.

Our family has had some of those very expensive illnesses (my parents/ me), but were fortunate to have the majority of medicals covered by insurance.