Survey: 64% of Americans Now Living Paycheck to Paycheck

[street]

LOL I forgot to mention I arrived without any furniture! Just some clothes, personal items, and pots and pans. Because my funds didn't go as far as I expected, I had to do without for a long time.

I had a cheap mattress delivered to the apartment, and slept on the mattress on the floor for several months before I could afford a used bed. I bought a couple of chairs at a thrift store and used a box for a table for a while.

I had made friends with a young couple in the apartment above mine. When they abruptly separated, she decided to move back to Texas where her family lived, and gave me some of her furniture. Suddenly, I had what I needed.

This stuff can all be managed when you are young and healthy. It serves as an impetus to work hard, be frugal, move up.

That is so true and if one of those things you mentioned isn't done, things could have turned out different in one's life.

 

[scrabbler1]

I was getting a bit nervous at end of last year. My 3 checking acct. balances (total) were getting down to near $20K. Told DW "I can't live like this!" Had there been one more month in the year, I would have hit up the 401(k) - again. I like to know I can write virtually any sized check I might need to and not worry about the funds being there. I realize I miss out on some investment performance this way, but it's just how I like to live. Of course, soon as 2022 rolled around, I hit the 401(k) for my RMD (+) for the year. Very much YMMV.

This is why I have my second-tier emergency fund in a national muni bond fund which has checkwriting privileges (something not as available as in previous years). I don't like the idea of having a lot of money tied up in something which generates nearly zilch. At least in the bond fund I get around 2% mostly tax-free. I haven't had to tap into this fund often in the nearly 30 years I have been in it. But when I need a big blob of money (max is nearly $50k) right away, it is good to know it is always there.

 

[jazz4cash]

This is why I have my second-tier emergency fund in a national muni bond fund which has checkwriting privileges (something not as available as in previous years). I don't like the idea of having a lot of money tied up in something which generates nearly zilch. At least in the bond fund I get around 2% mostly tax-free. I haven't had to tap into this fund often in the nearly 30 years I have been in it. But when I need a big blob of money (max is nearly $50k) right away, it is good to know it is always there.

I’m doing the same. I couldn’t bear to have extra money in a checking or regular savings account.

 

[Koolau]

I’m doing the same. I couldn’t bear to have extra money in a checking or regular savings account.

I completely understand this viewpoint. It makes all kinds of sense. But for me, just thinking about the "travail" I went through at the end of last year - needing money from my sweep account, moving money from one (spare) checking act. to the main checking act., etc. to be able to write a pretty decent sized, unexpected, end-of-year check made me uncomfortable. I'm too old and too FIRE'd to feel that way in my golden years. I'll gladly take the 2% hit (or whatever) to always have "enough" where I can get my hands on it. Very much a YMMV situation.

 

[TheWizard]

I’m doing the same. I couldn’t bear to have extra money in a checking or regular savings account.

Ok, I sort of agree with that but the trick is to define what is meant by Extra Money. Typically it's a few thousand dollars or so.

I, for instance, have no interest in cutting things so lean that I have to move money back into checking every month when a CC bill is due...

 

[scrabbler1]

Ok, I sort of agree with that but the trick is to define what is meant by Extra Money. Typically it's a few thousand dollars or so.

I, for instance, have no interest in cutting things so lean that I have to move money back into checking every month when a CC bill is due...

Right. My first-tier emergency fund is a relatively small cushion in my regular checking account, between $700 and $2,500 (depending on the time of the month) above the pretty small minimum balance needed to avoid monthly account fees. This small blob of money I often tap into to pay for a small spending spree or get some extra cash or anything else on the small side.

The bigger blob of money I mentioned a few posts up is for larger, unforeseen (and rare) expenses the local bank account's cushion can't cover.

 

[yakers]

$100k in checking is high to me, a few months back I had $30K in checking and reflected that was more than my net worth at age 30 (except for future pension eventually if I worked 25 more years). It all wrked out well, not sure how much work/planning/management and how much luck/good timing.
But, yes, more in checking than former net worth. I must not be the only one.

 

[Magus]

$100k is super, so neither of us are in the paycheck to paycheck rut.
For me, excess beyond $10k goes into my settlement fund at Vanguard.

Next month, for example, I have a $3k payment for a dive trip to Indonesia due, so that sort of scales my approach to money management.
Nine years in to retirement, it seems to be working...

Yeah $100k in cash is a lot although I've had that much in cash for much of the last year until recently due to some windfalls and looking for rentals to invest in. I like to keep a minimum $30k or more in cash but I have nearly $10k in mortgages every month from main property + rentals and another $2k in HOA fees. Add in my living expenses and that's basically 2 months worth of expenses assuming none of my 9 tenants paid rent (extremely unlikely scenario).

Dive trip to Indonesia sounds great!

 

[street]

To the people that just have the bare minimum in checking what do you do when you need a 5-digit number to buy something?

 

[jazz4cash]

To the people that just have the bare minimum in checking what do you do when you need a 5-digit number to buy something?

I transfer whatever I need from a high yield savings or other account. Easy to do anytime with my phone. If possible I use a rewards credit card that is set to autopay the full balance from a high yield savings account. Checking is only for high frequency payees and the ones that won't take a credit card.

 

[jazz4cash]

Ok, I sort of agree with that but the trick is to define what is meant by Extra Money. Typically it's a few thousand dollars or so.

I, for instance, have no interest in cutting things so lean that I have to move money back into checking every month when a CC bill is due...

I basically agree. A few thousand is not an issue, especially at today's rates. My expenses are very regular and no surprises. My main CC bills are set to autopay statement balance from a high yield savings. I am also benefitting from a lumpy CD ladder to fund the high yield savings.

 

[jollystomper]

I transfer whatever I need from a high yield savings or other account. Easy to do anytime with my phone. If possible I use a rewards credit card that is set to autopay the full balance from a high yield savings account. Checking is only for high frequency payees and the ones that won't take a credit card.

+1

My checking account has enough to pay our regular bills. It is replenished by my pension. If those bills will exceed the balance, I just transfer the amount from a better yield savings account.

If I need to write a large (4 figure or more) check, I will know that well in advance. But as jazz4cash mentioned, any large payments I will first use my credit card if possible, which has a large credit line and generates rewards.

 

[street]

I transfer whatever I need from a high yield savings or other account. Easy to do anytime with my phone. If possible I use a rewards credit card that is set to autopay the full balance from a high yield savings account. Checking is only for high frequency payees and the ones that won't take a credit card.

Thanks.
I was interpreting this incorrectly from what I do, and others have said. We also have a savings account with earning interest which is a checking/savings account that we can write checks from. We also just have a checking account with a mid 5 digit number in it.

So, we operate mostly like you do. But that number in there is a larger amount.

 

[scrabbler1]

To the people that just have the bare minimum in checking what do you do when you need a 5-digit number to buy something?

For a purchase that large, I will know at least a few days in advance, so I can transfer the funds from elsewhere into my local bank's checking account. Or, I can write a check from my national muni bond fund account if I can't wait those few days. If I had to use my CC, I'd have to split it between my 2 cards because neither one has a $10k limit but together they exceed $10k.

 

[Amethyst]

Transfer from money market or bond fund to checking account. I could sell some index funds, too, as long as I remembered to send a chunk to the IRS.

Have had to do this a lot lately, having spent a ton of money on the house.

To the people that just have the bare minimum in checking what do you do when you need a 5-digit number to buy something?

 

[street]

For a purchase that large, I will know at least a few days in advance, so I can transfer the funds from elsewhere into my local bank's checking account. Or, I can write a check from my national muni bond fund account if I can't wait those few days. If I had to use my CC, I'd have to split it between my 2 cards because neither one has a $10k limit but together they exceed $10k.

Yes, I believe we operate basically the same way. I was thinking that when a large purchase occurred it would mean selling off investments. That maybe the case in some situations but for the most part people are doing your method of large purchases.

 

[Walt34]

To the people that just have the bare minimum in checking what do you do when you need a 5-digit number to buy something?

Like most we just transfer it from somewhere else, like a savings or money market account.

On checking account balances, at the other extreme there was one time in my life when my checking account balance showed as 2¢, although it never actually got that low because an outstanding check didn't clear before the next direct-deposited paycheck. But it was close!

My DW-to-be was horrified. I tried to explain that it didn't matter - the check either cleared or it did not, there was no middle ground and a positive balance, even if only by one cent, was all that was required. She was not convinced.

 

[Bullwinkle]

I have a story like many of the ones here, in college I had a part time job, and I think paychecks came out biweekly. I would go by the office to collect them, and the lady there would say "oh looks like you have 4 of them", because I would often forget. That pretty much carried over to adult life, except it was direct deposit. But money accumulated and I paid no mind, until a family member said "have you ever thought of investing? Try Vanguard" so I dumped it all into a market index and that was that.

However, I can say in college since the folks took care of tuition it was basically just rent and utilities and food, and most of the time rent was yearly for the dorms and food was 6 months worth on a cafe card, so I'd get that over with at the beginning of the year and forget about it. Beyond that there was just nothing to spend on. So definitely I was fortunate that my parents could help out with tuition, and I had enough slack to do the rent and food all at once. The rest of it is the "nothing to spend on."

I see lots of back-patting and in-group congratulations and of course I enjoy that too but I feel like I can't really take credit because it's not like I scrimp and save and budget and manage to be frugal, it's just that for whatever reason it's the natural state for me. Even when I feel like I should be spending, e.g. for travel... trip planning is a hassle even if I know I'll regret not doing the trip.

Same goes for ads... even without a TV of course I can't totally avoid seeing them but I like to think I'm mostly immune simply because I never want stuff. Alcohol? Don't drink. Electronics... I got a phone for free from my job, and it's nice to have but if I had to pay for it I probably wouldn't have bothered. I do upgrade a few computer parts every 5-10 years for $300 to $400. No interest in cars, though they are useful for getting places. Status symbols? No friends to impress, but also just no idea what impresses people. It was only after getting married and talking with my wife I came to understand that cars come in different levels which many people care about, previously I hadn't thought about them much but I guess I assumed they had different colors and that was about it. I do like travel but the ads all seem to be for some completely different kind of travel than I like. I'm just not in anyone's target demographic.

So maybe I'm not so much frugal as just lazy, but I prefer to think of it as, I know what I like, and it's not that. I think I can understand the "other side" better if I move it over to something I'm not good at, which is exercise. Some people actually enjoy it, and it's actually hard for them to not exercise, they feel cooped up. Meanwhile I know it's good for me but I really have to force myself out the door and come up with a way to distract myself the whole time. I have to "budget" and even then I miss my budgets and I don't feel like I'm "saving" as I should be.

So I wonder how much of the ability to save is built-in personality, how much is programmed from childhood surroundings, how much is economic surroundings, and how much really is grit and determination? Built-in can't be changed, determination is famously slippery, culture can be changed but slowly and with much randomness, while economic circumstances can change very rapidly... but also seemingly with much randomness. Surely this has been studied because at a large scale it determines the economies and standards of living for entire countries and the world.

 

[youbet]

Google CEO compensation for failed companies and many articles over the years say otherwise.

It is very analogous to highly paid professional athletes on losing teams.

 

[scrabbler1]

Like most we just transfer it from somewhere else, like a savings or money market account.

On checking account balances, at the other extreme there was one time in my life when my checking account balance showed as 2¢, although it never actually got that low because an outstanding check didn't clear before the next direct-deposited paycheck. But it was close!

My DW-to-be was horrified. I tried to explain that it didn't matter - the check either cleared or it did not, there was no middle ground and a positive balance, even if only by one cent, was all that was required. She was not convinced.

For most of the 1980s and 1990s, I had a bounce-free checking account protection feature in case I overdrew my checking account. I had a linked, interest-bearing savings account (hence, no desire to keep any large cushion in the checking account) which I could just transfer money into the checking account from any ATM (and maybe by phone, I forget). At that time, there was no minimum finance charge, so overdrawing by a few dollars for a few days would incur a finance charge of less than $1. It beat risking a much larger bounce charge which did happen once or twice before I added this valuable feature in the mid-1980s.

In the late 1990s, the banks greatly increased the minimum balance for one of those linked savings accounts, and that made it not worthwhile to keep it around any longer. So I merged the savings account into the checking account, forgoing its low but not miniscule interest while eliminating the need for any bounce-free checking.

 

[disneysteve]

I know what I like, and it's not that.

One reason why advertising just doesn't influence me much is because once I find a product I like, I stick with it indefinitely, only changing if they discontinue it and force me to find a replacement. I very rarely try new products just for the heck of it. I've been using the same brand of toothpaste, deodorant, shampoo, soap, underwear, pants, laundry detergent, and pretty much every other product I buy regularly for years and years. I've owned Toyota Camrys since 1991. When it's time for a "new" car, I just go buy another Camry (and I've only had 4 in that 31-year period). When my everyday sneakers get worn, I order a new identical pair. Same for my running shoes. I'll shop around for the best price, but I buy the same style or the closest version they currently sell.


Advertising just isn't of interest to me because I have no intention of changing what I buy. If it works and I like it, I'm satisfied. I don't go looking for the newest thing every time.

 

[MC Rider]

One reason why advertising just doesn't influence me much is because once I find a product I like, I stick with it indefinitely, only changing if they discontinue it and force me to find a replacement. I very rarely try new products just for the heck of it. I've been using the same brand of toothpaste, deodorant, shampoo, soap, underwear, pants, laundry detergent, and pretty much every other product I buy regularly for years and years. I've owned Toyota Camrys since 1991. When it's time for a "new" car, I just go buy another Camry (and I've only had 4 in that 31-year period). When my everyday sneakers get worn, I order a new identical pair. Same for my running shoes. I'll shop around for the best price, but I buy the same style or the closest version they currently sell.


Advertising just isn't of interest to me because I have no intention of changing what I buy. If it works and I like it, I'm satisfied. I don't go looking for the newest thing every time.

I guess I mostly do the same. Except I want to try different cars, different motorcycles. But for Levis and Skechers and every day things,


The name of the game is I like it like that.

 

[scrabbler1]

One reason why advertising just doesn't influence me much is because once I find a product I like, I stick with it indefinitely, only changing if they discontinue it and force me to find a replacement. I very rarely try new products just for the heck of it. I've been using the same brand of toothpaste, deodorant, shampoo, soap, underwear, pants, laundry detergent, and pretty much every other product I buy regularly for years and years. I've owned Toyota Camrys since 1991. When it's time for a "new" car, I just go buy another Camry (and I've only had 4 in that 31-year period). When my everyday sneakers get worn, I order a new identical pair. Same for my running shoes. I'll shop around for the best price, but I buy the same style or the closest version they currently sell.


Advertising just isn't of interest to me because I have no intention of changing what I buy. If it works and I like it, I'm satisfied. I don't go looking for the newest thing every time.

I agree. I use many of the same brands I have been using since the 1970s and 1980s. With cars, I am like you, having bought a Geo Prism in 1992 and a Toyota Corolla (the same car) in 2007.

As for advertising, I spend considerable time avoiding the ads on TV. I use the remote's toggle button to switch between a channel in its ad break and another one which hopefully is not in its ad break. (Often, both channels are in ad breaks, so I rotate between 3, even 4 channels!)

 

[aja8888]

I agree. I use many of the same brands I have been using since the 1970s and 1980s. With cars, I am like you, having bought a Geo Prism in 1992 and a Toyota Corolla (the same car) in 2007.

As for advertising, I spend considerable time avoiding the ads on TV. I use the remote's toggle button to switch between a channel in its ad break and another one which hopefully is not in its ad break. (Often, both channels are in ad breaks, so I rotate between 3, even 4 channels!)

I just mute the voice when the commercial comes on and then I make a post here on my Chromebook!

 

[pjigar]

Interesting how these modest starts in life turned out so well. Lol I can vouch for some lean times also.

I slept on the floor of an apartment room a guy was renting where I started working. I couldn't afford a place and there wasn't much for places to stay anyway.
....
I came from a home where we didn't have much, but we had it all.

Similar story. We didn't have much growing up but we had a roof over head, cloths and good enough food. My first job after an engineering degree from a reputable university in a developing country would only afford me food, cloth and gas. So I illegally overstayed in the dorm. This prompted me leave everything behind and come to this land of opportunity. I lived with roommates until I got married. LBYM forever and controlled lifestyle creep. Fast forward 25 years and we have more money then I have ever imagined possible.