How many Americans are really living Paycheck to Paycheck?

[cyber888]

FORBES SAYS 78% - 2019

https://www.forbes.com/sites/zackfr...to-paycheck-government-shutdown/#3dbfaacf4f10

CNBC ALSO SAYS 78% - 2017

https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.html

CNBC EARLIER SAID 49% - 2017

https://www.cnbc.com/2017/06/29/heres-how-many-americans-are-living-paycheck-to-paycheck.html

CNN SAYS 76% - 2013

https://money.cnn.com/2013/06/24/pf/emergency-savings/index.html

Since people here in this forum are mostly not in this category, I suppose they are in the 1% - 15% of the entire population.

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?

 

[Senator]

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.

 

[Dtail]

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.

+1

 

[ShokWaveRider]

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.

 

[jetpack]

78% of workers.. not of all americans. Most americans don't work.

 

[karen1972]

Reality is many Americans in their 20s and early 30s live paycheck to paycheck as they pay for basic necessities and raise a family. Then they start to make money and feel the need to increase their lifestyle thru their 40s and then mid 40s finally start thinking about saving for their future... we all know how compounding works, it leaves very little time for them to save any type of nest egg.

I did a spreadsheet for another SS argument I had. Say you start at age 23 and make $28k, get a 3% pay raise YoY, your company has a 401k and matches 3% and you enrolled right away. And lets say you make a constant 7% return.

At the age of 35, you would make just under $40k and have $42k in a 401k. At 45, you would make about $54k and have $123k and by the time you are 65, you would make $97k and have $662k.

- Now it is very unlikely for most people to continue to get a 3% pay increase YoY as at some level you either have to climb the corporate ladder or you get capped out.
-Most people don't keep their jobs and anytime you leave your job and have less than $5k in your 401k they cash you out.. and if you lost that job that cash is often spent to pay bills so you start over.
- 41% of millenials don't have access to a 401k which means forget that 3% match

etc etc etc.. so you can see it is very easy to understand that most of these people do not have money put away or have so little it really doesn't cover any major emergency.

It is also backed up by the general average cost of a household vs. average income, those numbers don't align and clearly indicate people are living on credit... hoping the next job, the overtime, etc will make up for it someday.

 

[joeea]

I don't get a paycheck.

I'll get back to after I determine if I'm really living or not.

 

[LRDave]

When we were young (early 20s to mid-late 30s), we lived paycheck-to-paycheck, mostly. Thank Allah, in that period I had employers that matched 401(k) savings and I contributed up to the savings match level and we never thought about tapping it or reducing the contribution. Those early 401(k) contributions are the seed for our current nest egg.

 

[LRDave]

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.

So circumstance can't possibly have anything to do with it? Unexpected medical bills? Family member in need?

 

[Dtail]

So circumstance can't possibly have anything to do with it? Unexpected medical bills? Family member in need?

Could be, but more likely a lifestyle choice.
Otherwise everyone would be on this site. lol

 

[GenXguy]

So circumstance can't possibly have anything to do with it? Unexpected medical bills? Family member in need?

Thanks, I was going to say the same thing. Life happens - it's not always a choice.

 

[Teacher Terry]

Exactly Genx.

 

[sengsational]

Thanks, I was going to say the same thing. Life happens - it's not always a choice.

Let's not go there again!


How about explore a good way to go paycheck to paycheck?


My DD who often has strrived to be non-analytical, was looking at apartments for an upcoming move with her long-term boyfriend. He'll be moving to pick up a post college job (she's already out and working). But she mentioned a spreadsheet she did that allocated all income and expense through this job transition, moving, her going back for her MBA. Detailed too, with Medicare and tax withholding, etc. It all balanced to zero. I was worried. Until....until I saw that right up there at the top there was a 15% 401k 'expense' and another 'savings' expense line item.

 

[RetiredGypsy]

So circumstance can't possibly have anything to do with it? Unexpected medical bills? Family member in need?

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.

 

[travelover]

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.

Oh boy, here we go again.

 

[Rianne]

I have a hard time with the statement "paycheck to paycheck." The whole concept is moot. I can live paycheck to paycheck earning $500K and having expenses of $499K. Do I consider myself underprivileged? The bigger question is how much you save or have in savings/portfolio.

It's income to spending, bottom line. If you live in Silicon Valley, make $250K, you're probably living paycheck to paycheck, saving very little. Why don't they term this "Americans with little or no savings" in the area they are living.

 

[Sojourner]

Reality is many Americans in their 20s and early 30s live paycheck to paycheck as they pay for basic necessities and raise a family.

When we were young (early 20s to mid-late 30s), we lived paycheck-to-paycheck, mostly.

This made me think back to my early working years in my 20s, and oddly enough, I don't think I ever lived paycheck-to-paycheck at any point, despite making a below-average salary (around $25,000/year IIRC). Even then, I had a LBYM mentality and would find a way to save at least 10% of every paycheck. Of course, I was fortunate to have had good health, no expensive student loans to repay, and many other "luck" factors working for me, but this was also the case for many of my colleagues and friends. Yet I knew they were spending every dime they earned, at a minimum, and most were overspending via credit cards. From what I've seen, it really does seem to be a mindset that you either have or you don't.

 

[NW-Bound]

It's been a while since we had a paycheck. And my wife's SS deposit started just a few months ago, and it's a fraction of what we spend.

I have been receiving computer-generated emails from my bank. They warn that my expenses far exceed my income. They point me to a free budgeting tool that they provide to help me balance the inflow and outflow.

Paycheck to paycheck? What paycheck? We are toastally doomed.

 

[marko]

DW worked with guys making $750k+.

A few days before payday they'd regularly be bumming $50 from her to go out that night. They didn't have $100 in the ATM down in the lobby.

 

[Mdlerth]

It takes a lifetime to accumulate one's life's savings

+1 to earlier comments. I'll add a few more:

Nearly one in 10 workers making $100,000+ live paycheck to paycheck

So, less than 10%. In other words, "most (>90%) of the highest paid workers do NOT live P2P". It makes sense that if you earn a lot, it's easier to get by on less than All of It.

I think the only surprise there is that the number is above 90%. In the absence of coercion, getting more than 90% of any human population to behave alike is remarkable.

More than 1 in 4 workers do not set aside any savings each month

I suppose this counts as the definition of living P2P. I would have expected it to be higher than just one quarter, if for no other reason than the overall population includes many millions of people still in the first (i.e. lower paid) half of their careers, still providing for children, still paying on mortgages, etc. Survey those same individuals 30 years from now and a lot fewer will still be P2P.

Nearly 3 in 4 workers say they are in debt - and more than half think they always will be

I, too, am in debt, as is everybody else with a mortgage. It doesn't mean their NW is negative, it just means they have some debt. There are folks on this forum who say they expect to have a mortgage after retiring.

More than half of minimum wage workers say they have to work more than one job to make ends meet

Plenty of minimum wage jobs are controlled at less than "full-time", so that laws regarding benefits don't apply. If you are in a minimum wage job, even to get up to 40 hours per week you probably need a second one.

 

[ckelly78z]

Try it all while hitting your out-of-pocket health care maximum every year for the last 30 years, with Cancer/heart failure/surgeries, and a new pace maker, while paying a quarterly co-pay on 4 different specialists, and all the procedures they want to perform, along with 6 daily prescriptions.

Right there is the reason I drive used cars, and HAVE to LBYM paycheck to paycheck, while also saving 20% in my 401K.

 

[Kwirk]

In a sense, DW and I lived paycheck to paycheck for many years. We had large educational loans, children, mortgage,... We did maximize retirement fund contributions when that was offered. We had very secure, relatively well-paying jobs but our credit cards constituted much of our "emergency fund." Paying off the mortgage and educational loans seemed to be the best use of surplus cash. Our debts were paid off just about the time the children started college. We didn't have much of a college fund but we were able to pay for that out of current income with some left over for saving. We saved a considerable amount of after-tax money when the kids finished school, and our retirement funds had been accumulating all along. Looking back I wouldn't change much.

 

[aaronc879]

I'm not surprised the number is so high. Nearly everyone I have ever worked with has commented about living paycheck to paycheck. Despite making the same income as these people for 40 years I have not been paycheck to paycheck since I was around 21. I have never made more than $49,XXX in any one year. I recently got terminated from my union manual labor job because I can't do the work anymore after my hip replacement. My new office job that I start on Oct 7th will only pay $28-30K/yr. I'm sure nearly everyone there will be paycheck to paycheck but I have always lived below my means so i'll be fine.

 

[Senator]

So circumstance can't possibly have anything to do with it? Unexpected medical bills? Family member in need?

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.

 

[foxfirev5]

So circumstance can't possibly have anything to do with it? Unexpected medical bills? Family member in need?

Yeah the arrogance of some on this forum sometimes makes me cringe. While I worked hard, saved and invested I also realize there was a healthy dose of good fortune. Karma.