Poll:Living paycheck to paycheck

[Nightcap]

I lived paycheck to paycheck until January 1, 1990. I had just turned 29 years old - my life had spiraled out of control - and I had absolutely nothing. Thankfully, I didn't have any debt.

I put "the bottle down" and the rest is history. I never needed to live paycheck to paycheck again - and 27 years later I can pick and choose when and where I would like to retire.

Michael

+1 Same story, except that I was 26. The Penultimate Wife left a few months later. Luckily we had no kids or debts. It's amazing how much can be accomplished a day at a time.

 

[Danmar]

Hard to answer this. It's been quite a while but I would say for maybe 20 years until I left wife #1. Always had ready access to debt/CC's so it wasn't exactly paycheck to paycheck. Couldn't pay the CC's off fully every month though. That probably is the more modern definition of P to P? It was probably in my late 40's that I was able to pay all bills when received. Felt very good to get to that position.

 

[Totoro]

Till after my Phd, 26, I hardly saved. Not sure if that qualifies as paycheck-to-paycheck though. I just ran break even and had to be careful with expensive travel.

 

[exnavynuke]

Lived paycheck to paycheck (or close to it) for most of my independent adult life until my late 20's. Had a guaranteed paycheck, retirement check would be coming later (military), so who needs to save money was my attitude on those rare occasions where I gave it any thought. Finding out I wasn't going to get to stay in and collect that retirement was an eye opening experience and I promptly spent a bunch of effort learning about budgeting, saving, and investing. Since then I've slowly ramped up my savings rate every year to where I'm at now (~40%+ of my base pay being saved). While I thoroughly enjoyed most of what I spent my money on when I was living paycheck to paycheck (mostly women and alcohol or associated events), if I had it to do all over again I would have saved at least my bonuses during those years if nothing else.

 

[Mdlerth]

More joy in heaven over a sinner who repents

Most of the respondents so far indicate they always were savers. I would have been one, too, but I got married right out of college, which changed everything. DW brought the twin gifts of college debt and astonishing fertility; any plans I might have had regarding saving/investing went right out the window.

On one income, we didn't live extravagantly. I remember powerful feelings of envy over the slick new cars, killer stereos and exotic vacations that my single and DINK friends enjoyed but were beyond my budget. All our income was spoken for by the needs of our five nestlings. My own wants just had to go on the back burner.

Of course, we didn't go hungry or naked or sick, either. We supported our kids' activities; everybody got housed and fed and dressed and all that. We lived an unremarkable middle class lifestyle, neither rich nor poor.

OTOH, we didn't borrow to keep up with our prosperous friends. Our cars were old and we put in a ton of DIY hours. We did borrow early on for mortgages, and when the kids entered college we borrowed for that, too. I contend it's very much an individual decision to do so, and I don't judge.

For twenty years, any thoughts about providing for retirement got elbowed aside by the daily grind of work, grad school, and tending the needs of my family. The result was that after two decades of wage-slaving, my net worth was zero. It wasn't until about age 42 that I "got religion" savings-wise and took positive action to sock away some dough for my golden years. That was the turning point.

It was painful for about a year, during which we adapted as necessary. It's nearing another twenty years, but now we've managed to build at least some reasonable financial security. If I can eke out another couple of years then I can retire - certainly not early by the standards of this forum, but a bit earlier than most Americans.

My path is clearly a minority one among ER types, but I bet it's a lot more representative of the population at large. People who will be entirely reliant on their SS probably didn't intend for it to be that way. They probably didn't intend anything at all; it's just that living for today sort of crowded out the long term. I'm not any better than those folks, although I am gratified that I was able to act for my own future in time for it to make a difference.

 

[jollystomper]

My first couple of years in college I lived paycheck to paycheck, as part of my scholarship package was a job. between my sophomore-junior and junior-senior years I was able to get well paying internships and build up a little savings.

My first year after college was a little paycheck to paycheck, as I had all of the startup costs of living completely on my own. But after a year, and also receiving my first raise, I did not have to.

Being exposed as a child to many people living paycheck to paycheck, and having parents who pushed us not just to get better educated but also to save, certainly helped.

 

[Music Lover]

I married a person who spent faster than it came in. Thankfully I got out after 3-4 years of marriage. But, I had a low income at the time and kept the too expensive house for another 5 years...I was cheque to cheque for almost 10 years.

I finally sold it and downsized at the same time I got a substantial promotion. From that point forward I was able to save and not worry about money.

 

[Bir48die]

Absolutely had 3 or 4 years that I just barely made it. Early 80's with 20% prime rate devastated the financial industry. Lost my job and had to change industries and start at the bottom. About that time wife became pregnant and we bought our first house. Payment was 45% of my gross salary. Wife did some part time work to supplement.

Took a couple years to show some success and get recognized in salary and bonus increases.

I am grateful to have this period as it gave me a great appreciation for those who struggle and really learning to stay on a budget. I will say these were the funnest times in our life as the simple things as going to a matinee sneaking in food or walking the mall gave us a great pleasure.

 

[kcowan]

Moved to change jobs and bought another house before selling the last one. Had bridge financing of $500k at 20%. Maxed out all CCs and even applied for a couple more. Borrowed against life insurance, retirement plans, any source.

When the old place finally sold, I paid off everything and have never carried debt other than one mortgage since. It was a great lesson! I would not recommend it to anyone! LBYM trust me! Did not even buy a new car for four more year ( for cash). People often asked why we drove 2 old cars and I said they were prairie cars and did not start rusting until we moved them east which was true. But not the reason.

 

[pullmyfinger]

Yes, for the first few years out of college. I graduated into a bad job market in the early 90's and joined the USAF out of desperation to get a stable job. The pay was low for an O-1, and the housing allowance hadn't caught up to the fact that rents had increased dramatically in the area I was stationed. My parents had both died when I was in my early 20's so I knew I had nothing and no one to fall back on. I bought a new Civic and paid off the loan in 9 months so I wouldn't have debt. I was so fearful that I would end up homeless. I literally put any money I could scrape together towards it and often had to live on $20 until the next paycheck came. 24 years later I still drive that car. I lived on cheerios and PBJ's. I did have about $15K in savings so I wasn't technically broke, but I didn't dare touch it.

When I went from O-1 to O-2 the I ended up with an extra $300 in each check and that was wonderful! After I had been in 3 years I bought a house and paid off the loan in 2 years. I used the same strategy, putting every last dime toward the principal but fortunately my salary had significantly increased. While those years were really stressful they did set me up for financial independence. I always like to know what my bottom line is - how much does it cost for a bare bones existence.

 

[Donny68]

Probably about two years for me. For my last semester in college I had to move away for an internship. Getting money from family wasn't an option so I had to get a second job over the summer. After paying my half of the expenses in a new apartment I only had about $40 to my name. When the internship was over I had no job for a few weeks but eventually found some low pay work just to have money. A few months later someone in the office was fired and I started working OT. 5 months after that I found a better paying job with benefits. Things finally turned around when my wife who was my girlfriend at the time finished grad school and started working. We had a Styrofoam couch and ate hot dogs way too often back then.

 

[Koolau]

I feel so blessed to have never lived paycheck to paycheck. I don't take full credit as my parents contributed somewhat to my education (living at home was significant). Also, I grew up in a time when earning state school yearly tuition only required a summer's hard labor (spending money was earned on school weekends and holidays - no spring break fo dis haole!)

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. A friend of mine lived like that and had a very good, responsible job at a Megacorp. I never felt right about pointing out that each of his kids had a car (or near-monster truck). His DW routinely redecorated the house (on which there was a huge mortgage), he had more business suits than I had socks, he had every latest electronic toy, etc. Any of us could (or could have) found ourselves in a struggle at one time or another through out our life times. But to actually become "comfortable" with living paycheck to paycheck is what I can't understand. YMMV

 

[Walt34]

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. At my last job there was a glitch in the payroll system once and instead of the regular Friday deposit, that wasn't going to happen until the following Monday. For most folks here that's worthy of a "meh".

You should have seen the moaning, groaning, gnashing of teeth and near-panic! One or two even took out payday loans. It was sad in a way because some would be working until health issues forced them out.

 

[Jeffman52]

I ended up on that hamster wheel for a couple of years. I was so far underwater and in debt that I would pay my CC bills, then wait for them to post, go get money out of the CC, and use that to pay other CC's.


Credit Cards can be a great tool but unless you are disciplined, they can be your worst enemy.

 

[gerntz]

We got married & I went to grad school for Masters for 1.5 years. We lived p2p for that period.

 

[scrabbler1]

DW and I just shake our heads in wonder at such people too. At my last job there was a glitch in the payroll system once and instead of the regular Friday deposit, that wasn't going to happen until the following Monday. For most folks here that's worthy of a "meh".

You should have seen the moaning, groaning, gnashing of teeth and near-panic! One or two even took out payday loans. It was sad in a way because some would be working until health issues forced them out.

Back in 2001 when I first switched from working FT to PT, my initial PT paycheck was delayed for 2 weeks because the switch from FT to PT meant I would be paid on a lag basis. Nobody told me this beforehand, and I didn't find out until I had no paycheck coming to me on the regular payday.

This happened in the middle of the month, when only a few small bills are due, so it was no big deal. [At worst, had this happened just before the end of a month when bigger bills are due, it would have been a small inconvenience.] The only real surprise when this happened was the way my apologetic boss reacted to my no-big-deal ("meh") response. She seemed rather stunned that it made no real difference.

I remained on a lag pay basis for the next 7 years. I remember once or twice my boss (a different person) forgot to turn in my weekly timesheets so my pay was halved until the next paycheck, again no big deal. When I left the company in 2008, the lag payroll got me an extra paycheck after my last day, plus another week because I left in the middle of a pay period. That, along with getting paid out for a bunch of unused PTO I had no idea I still had made for a nice bonus!

 

[Hyper]

About 2 yrs. Just starting out, married and a child. My parents did most everything wrong so I seen how miserable life was living like that. DW and I didn't have any guidance and we started down that same road and was blessed to make the changes to live a much better life!

 

[brucethebroker]

For a couple of years when the recession hit, and my income plunged 80% in 6 months (self employed, selling real estate at that time). Did not tap retirement savings, but it was touch and go for awhile. Downsized, and sold a property. DW took a new job, and I started a side business. Eventually we bounced back better than ever. No worries for about the last 6 years, thank goodness.

 

[Winenot]

Back in the late 70's, I was in my early 20's and drove a beat up old car. I was definitely living paycheck to paycheck, even though I did have a fairly decent job at the time. One day, my beater was backed into in a parking lot and instead of getting the thing fixed, I pocketed the $500 in damages and opened a savings account. From that moment on, I was hooked on saving money. What a sense of freedom it was to have that little bit of money (actually, a tidy sum back then) set aside...just in case! Fast forward four decades and here I am, retired at 58, $3m in investments and zero debt. I often reflect on that day and how a seemingly inconsequential event ended up having such a profound impact on my life. It's likely I would have figured it out soon enough, but I often say a quiet little "thank you" to that lousy parker, where ever he may be.

 

[Koolau]

I have a friend who decided in the early 70's to take a sales j*b in Hawaii. He was 23 and had just graduated university. He sold everything he owned, hitched a ride to the airport and took a one-way to Honolulu with $60 in his pocket plus the clothes he had on or tucked in his suitcase. His first paycheck would begin one month later. He had planned to live on the beach until he got paid. Fortunately, his boss picked him up at the airport and found a place for him to live on an advance. For him, it was just that one month as he blew away his fellow sales people and quickly rose to sales manager before starting his own business. I think there are just some folks who would "make it" (including making whatever sacrifices are needed) no mater what the circumstances. YMMV

 

[Gumby]

Yes, for the first few years out of college. I graduated into a bad job market in the early 90's and joined the USAF out of desperation to get a stable job. The pay was low for an O-1, and the housing allowance hadn't caught up to the fact that rents had increased dramatically in the area I was stationed.

When I was a young naval officer back in the early 80's, it was my great good fortune to be a submariner. When we were underway, which was most of the time, there was simply no way to spend even a penny. So the fact that O-1/O-2 pay was comically low did not really affect me. It just built up in the bank.

 

[calmloki]

The Navy was not only feeding, clothing, and housing me but gave me a whole $128/month to blow. Unfortunately my Mom had told me about a tax sale of some Oregon coast property - she paid the purchase price and I paid her + interest till it was paid off. Didn't leave much play money. After the navy was college - thanks GI bill! - and tiny amounts of cash from no-account jobs. My career working for others was random and brought in minuscule money. No problem - I just pointed any pay at bills first, then could play with the remaining $20 or so. Started working for myself and did a bit better, but still operated on a "get any money out of my hands soonest" basis. In the 80's interest was so high it just made great sense to pay off debt very aggressively. Started buying property and there was lots of debt to address, so my wallet stayed flat.

For decades I/we lived on a barely enough basis as we pushed our debt load down. Played tricks with myself - $100 bills couldn't be spent on day-to-day expenses; they were for debt pay-down or investment, so even if I had hundreds in my pocket I might be broke for a week. Relaxing a bit now, but still want to believe money has a purpose and want it to be earmarked - I'm more comfortable being "broke" than having cash stacked up doing nothing.

 

[marko]

I've mentioned a few times here how in DW's old job, guys making $500K+ would come around on Thursday bumming $50 from her. Of course, they always paid her back but it was obvious they didn't even have $100 in the ATM in the lobby to draw from.

 

[Dog]

Never really lived PC-to-PC, but DH and I sort of set up our living budget that way. We saved and invested first, paid bills and lived off an allowance each payday (also have always kept some slush in our checking for "just in case"). Not sure why, but I would even take some of my allowance and stick in the a sock in my sock drawer for a "rainy day". This "sock fund" would get large and I would end up adding that to our savings account and start over. It had grown to be a joke for DH and I over the many years.

Like others have commented, I worked in megacorp for many years in a sales capacity. When comp/bonus/pay checks were delayed for any reason, most folks had to get a draw or have the check over-nighted to them with many of them in a panic mode. Different strokes for different folks and I remind myself daily that "there but by the grace of God go I".

 

[Nightcap]

When I saw the writing on the wall at my penultimate employer (now bankrupt), I got a new job that started the second of January, 2000. Due to HR, um, issues, I didn't actually get on the payroll until March. Prior to then, I was to be paid as a consultant. I regularly put in for my pay, and was regularly told that HR had, um, issues. I finally received my first check in mid-March.

My workmates were shocked that I could live without a paycheck for so long. I explained as best I could that that's what savings were for. It was a novel concept, apparently.