4 in 10 Americans live paycheck to paycheck

[NW-Bound]

Maybe because 4 out of 10 adults are overspending.

Uh Oh! Maybe that's the truth.

When those 4 out of 10 go bankrupt and cannot continue iPhone upgrade, say hello to recession?



I recall that the Great Recession caused people to buy smaller homes and save more. Has that effect worn out?

Here's a chart of the savings rate from the Federal Reserve, for both the government and private citizens.

Notes: DPI is disposable personal income, and GNI is gross national income.

 

[FreeBear]

best advice gave my nephew and to anyone who asked...eliminate debt, live beneath your means and save and invest in good growth mutual funds. we learned the hard way but thank goodness we learned early. this stuff should really be taught in middle or high school.

+1 Amen!


We try to tell this to young 20-something folks whenever they can. We also urge them to save and invest at least 15% every year and max out their 401K/IRA's. It's a tough sell. They see shiny stuff. They don't see themselves unemployed or under employed in their 50's and 60's with several months to feed.


It greatly helped that my parents were very open about their financial successes (get an education and w*rk hard) and failures (don't assume you'll always make good money). I also learned from my downsized friends and colleagues throughout my career. I saw that this could or would be my likely fate at some point. I knew I wouldn't be more "special" than them...

 

[NW-Bound]

... (don't assume you'll always make good money). I also learned from my downsized friends and colleagues throughout my career. I saw that this could or would be my likely fate at some point. I knew I wouldn't be more "special" than them...

In the 90s, my megacorp was in financial trouble. Sensing that many engineers were looking for greener grass, my manager called me in to tell me personally that I would be the last one they let go before turning off the light.

I thanked him, and did not say that what I feared was that the light would get turned off, at least at the division where we were. Now, perhaps I could have found another job elsewhere, but it would require moving, my wife looking for job herself, my children getting uprooted. And I would be picky about the job I took and the location, so the job search would not be that quick.

It has always been the thinking about the "worst case scenario" like the above that makes me financially conservative. I can't help being a gloomy kind of guy. It's in my blood.

 

[Nick12]

+1 Amen!


We try to tell this to young 20-something folks whenever they can. We also urge them to save and invest at least 15% every year and max out their 401K/IRA's. It's a tough sell. They see shiny stuff. They don't see themselves unemployed or under employed in their 50's and 60's with several months to feed.


It greatly helped that my parents were very open about their financial successes (get an education and w*rk hard) and failures (don't assume you'll always make good money). I also learned from my downsized friends and colleagues throughout my career. I saw that this could or would be my likely fate at some point. I knew I wouldn't be more "special" than them...

Amen to that. I retired early from monthly investing regardless of share price and state of economy and living below my means since I took finance classes in college thru age 51 when financially I could walk away from my job. Too many people educated or non educated get sucked into living above their means, keeping up with the Joneses, continually being in debt, etc etc. If you ask the 4 out of 10 families that live paycheck to paycheck to take a long hard look into their “ current “ life and see what changes need to happen to get them out of that situation , that’s the real question. When I paid off my house after 12 years ( was on a 30 year fixed mortgage ) I worked 2 jobs to make it happen. For the next 13 years until I reached age 51, I poured what would have been my monthly mortgage payment into the stock market including my monthly investments into 401k and never looked back. When I saw what my net pay was after all this then I bugeted this to my lifestyle. It can be done! But how many sacrifices will others take to make it happen?

 

[FreeBear]

In the 90s, my megacorp was in financial trouble. Sensing that many engineers were looking for greener grass, my manager called me in to tell me personally that I would be the last one they let go before turning off the light.

I thanked him, and did not say that what I feared was that the light would get turned off, at least at the division where we were. Now, perhaps I could have found another job elsewhere, but it would require moving, my wife looking for job herself, my children getting uprooted. And I would be picky about the job I took and the location, so the job search would not be that quick.

It has always been the thinking about the "worst case scenario" like the above that makes me financially conservative. I can't help being a gloomy kind of guy. It's in my blood.

Yep, that's the rub. Once you put down roots and have family, and even a j*b that's substantially decent, you just won't jump for anything. DW and I decided to stay with the "Devil we know" and instead of search for greener pasture, in large part because we were paid well to deal with the daily BS. We were good and efficient at w*rk, leaving time for the rest of our lives. It would have been a different story if I were young and single...

 

[Music Lover]

I'd say "That's unbelievable," except that some people do things you wouldn't believe.

Actually, I empathize with people who want to live above their means. As with skydiving, it's the thought of actually going out and doing it that has always stopped me.

I honestly believed that being that deep in debt and then getting out would be a wake up call. It made me realize that some people, intelligent in every other way, will never do what's in their best interest, even when they're thrown a life line.

 

[Amethyst]

I guess for some people, spending is like eating. We wouldn't decide never to eat again, or to eat less, just because we couldn't get food for a while.

I honestly believed that being that deep in debt and then getting out would be a wake up call. It made me realize that some people, intelligent in every other way, will never do what's in their best interest, even when they're thrown a life line.

 

[youbet]

There are no guarantees. I wouldn't bank on what "traditionally" happened.

Oh, and while they were out, their promised 2019 pay raise was canceled. Some vacation.

I'll bet my money that the furloughed employees are paid in full after the shutdown is settled. You can assume otherwise as you wish.

Yep, it will turn into a vacation-like situation for most. Anyone who has emergency funds adequate to see them over the lapse in regular paychecks is free to enjoy their time off. Some are even pissed that they can be called back to work on short notice making it difficult to plan travel, etc.

I'm not for the shutdown, make no mistake about that. Among other things, it irks me to pay people I hired to accomplish work for me to stay home instead. And I hate the way it is putting the bad habits/manners of the American public on display as they, left unsupervised, trash public places. But, the portrayal the media is giving of furloughed public employees as now having starving children, missing meals and doing without many necessities of life is a bit overblown IMHO.

For the few public employees who, due to poor life skills/habits, extenuating personal circumstances, etc., actually are in harm's way, some sort of emergency funding in the form of low interest loans should be set up.

In any case....... let's hope this all comes to an end and soon.

Edit: Just as a point of info for anyone that might be affected, DW just got off the phone with The Army Corps campground we'll be using for a couple of weeks in Florida in the near future. They'll be open. Hooray! It turns out they're funded out of the military budget which is already in place as opposed to National Park campgrounds funding, which isn't.

 

[haha]

Ray, among "many other things," I was a professional editor. Trust me, unless I'm paid for it, I do not make a practice of going after people's grammar and spelling errors

I just like playing around with it when the errors are funny or ironic (including when other people make fun of my errors). Sort of like the way others point out when a decimal point is out of place, thus changing the entire meaning of a statement.

I wish you had the authority to clean up all examples of poor grammar on the board. Spending too much time here could ruin a formerly adequate command of English.

Ha

 

[Amethyst]

Thanks, I guess, but it's not something I'd ever do for fun. And I am mostly here for fun

I wish you had the authority to clean up all examples of poor grammar on the board.

Ha

 

[harllee]

My sister works for the federal court system, she has a high level administrative job. The federal courts have funds to operate another week or so. After that the federal courts will close. My sister's job is considered essential so she will have to continue to work but will not be paid. My sister will be OK financially, she has savings, but it seems very unfair to me that a federal employee can be required to work without pay (it is likely that person will eventually get paid but there is no guarantees and who knows how long it will take). What if you worked for a private company and was told that you would have to work but not get paid for an undetermined time because the company had not gotten their budget together?

 

[Gumby]

Only the federal government could get away with this. In Connecticut, failure of an employer to pay wages is a felony, and the officers of the company are personally liable. I suspect other states have similar laws.

 

[Redbugdave]

About paycheck to paycheck...When I was much younger the outfit I was in went through a massive reorganization. Back then I was one of those living on the edge. When you don't make much that's how you live. I can understand it. But, I wiggled into better paying positions through Life, never forgetting the past. One important thing to being successful in Life is to try and not make the same mistakes twice. I always remembered the helplessness and trapped feeling that I felt during those past days. That is what changed my thinking and lifestyle towards saving, investing, and being independent enough to survive a work downfall. Having a wife that has been there as well and understands about financial independence is important as well. Making more money helps, but you have to have a mindset and lifestyle to follow through. We all have a brain and should learn from our past and not make the same mistakes twice. But I guess some don't learn.

 

[Walt34]

Only the federal government could get away with this. In Connecticut, failure of a employer to pay wages is a felony, and the officers of the company are personally liable. I suspect other states have similar laws.

The same in West Virginia. In especially egregious cases (not just bookkeeping errors resulting in delays) people have done jail time.

 

[ERD50]

Only the federal government could get away with this. In Connecticut, failure of an employer to pay wages is a felony, and the officers of the company are personally liable. I suspect other states have similar laws.

The same in West Virginia. In especially egregious cases (not just bookkeeping errors resulting in delays) people have done jail time.

Yes! Someone should change the laws! Oh, wait....

-ERD50

 

[Tiger8693]

The same in West Virginia. In especially egregious cases (not just bookkeeping errors resulting in delays) people have done jail time.

Well, al congress has to do is..... their job. This can all be over.

 

[jollystomper]

...but it seems very unfair to me that a federal employee can be required to work without pay (it is likely that person will eventually get paid but there is no guarantees and who knows how long it will take). What if you worked for a private company and was told that you would have to work but not get paid for an undetermined time because the company had not gotten their budget together?

My question - I am sympathetic towards those on furlough, but are not they told these things when they take the job? Or, remembered what happened from that last government shutdown?

I have a friend who took a federal job last year, moving from the private sector, as he wanted a job with more stability and less travel. He was told about what would happen to his job in case of shutdown, so this situation is not a surprise to him.

In the private sector, commission only jobs might end up with you working without pay for a while. You make that choice when you take the job.

 

[brucethebroker]

It's both. Some move out: others rotate. One of my former co-workers who literally asked for money to buy food due to the payroll glitch, was in that situation due to a nightmare scenario with her ex. Time has passed, she since received a well-earned significant promotion and that is no longer an issue.


I have another former co-worker who, while she won't starve (due to SS from an ex), can't keep money. In her case, her family repeatedly came to her with one sob story or another, and drained her finances. She is over 70 and still working. Sad.

So, did she ever figure that out? Hard to feel sorry for someone who squandered a lifetime of earnings on "enabling" family members who squandered her money....the same way as the stats on SS recipients who owe a ton of loans for education....whose education? Adult children....?

To me, this is a totally different situation than someone who is downsized in their 50's and can't find decent employment. Or someone disabled earlier in life and having extreme expenses.

 

[brucethebroker]

My sister works for the federal court system, she has a high level administrative job. The federal courts have funds to operate another week or so. After that the federal courts will close. My sister's job is considered essential so she will have to continue to work but will not be paid. My sister will be OK financially, she has savings, but it seems very unfair to me that a federal employee can be required to work without pay (it is likely that person will eventually get paid but there is no guarantees and who knows how long it will take). What if you worked for a private company and was told that you would have to work but not get paid for an undetermined time because the company had not gotten their budget together?

Nope, not fair. But...how many shutdowns has your sister ridden out? Two, three, a dozen? Most likely knows the score by now. Should have saved enough to ride out a few weeks (ave. shutdown??). Or, looked for better employment conditions, right?

 

[joeea]

But, the portrayal the media is giving of furloughed public employees as now having starving children, missing meals and doing without many necessities of life is a bit overblown IMHO.

Yeah all those media shots of the starving children are way overblown.

 

[joeea]

Well, al congress has to do is..... their job. This can all be over.

Of course it takes more than just congress here. Unless congress is willing to override a veto (seems unlikely).

 

[MarieIG]

So, did she ever figure that out? Hard to feel sorry for someone who squandered a lifetime of earnings on "enabling" family members who squandered her money....the same way as the stats on SS recipients who owe a ton of loans for education....whose education? Adult children....?

To me, this is a totally different situation than someone who is downsized in their 50's and can't find decent employment. Or someone disabled earlier in life and having extreme expenses.

No.

Here, adult granddaughter's high priced college (as well as funding son's legal bills for criminal defense lawyer, buying vehicles for son and granddaughter, granddaughter's fancy sweet 16 party, even funding daughter's and granddaughter's vacations).

Yes, but still sad. I was (very) fleetingly tempted to give her money when she was crying in my office one day about coming up short when qualifying for a loan for a little second hand mobile home, but realized that I would indirectly be funding the relatives; and it would not be fair to my husband.

 

[Gumby]

This survey suggests that the true percentage of those who live paycheck to paycheck is 78%, not 40%

Living Paycheck to Paycheck is a Way of Life for Majority of U.S. Workers, According to New CareerBuilder Survey - Aug 24, 2017

 

[Amethyst]

The survey write-up also comments "Further, 71 percent of all workers say they're in debt — up from 68 percent last year. While 46 percent say their debt is manageable, more than half of those in debt (56 percent) say they feel they will always be in debt.

If home mortgages are included in "debt" (the write-up doesn't specify), that's not too surprising.

This survey suggests that the true percentage of those who live paycheck to paycheck is 78%, not 40%

Living Paycheck to Paycheck is a Way of Life for Majority of U.S. Workers, According to New CareerBuilder Survey - Aug 24, 2017

 

[Amethyst]

I've known several people who, despite having not enough for themselves, cannot resist the "high" of temporary popularity and love from recipients.

Even when the recipients only appreciate the bounty about as long as a critter appreciates a treat. Well, actually, the critter probably has more loyalty.

"And when you've got money/You've got lots of friends/
Crowding round your door....
But when the money's gone/and all your spending ends/
They won't be round any more."
(Blood, Sweat, and Tears: God Bless the Child)

No.

Here, adult granddaughter's high priced college (as well as funding son's legal bills for criminal defense lawyer, buying vehicles for son and granddaughter, granddaughter's fancy sweet 16 party, even funding daughter's and granddaughter's vacations).

Yes, but still sad. I was (very) fleetingly tempted to give her money when she was crying in my office one day about coming up short when qualifying for a loan for a little second hand mobile home, but realized that I would indirectly be funding the relatives; and it would not be fair to my husband.