Survey: 64% of Americans Now Living Paycheck to Paycheck

[aaronc879]

It really is hard to believe how much money people spend. I make less than $20K/yr and always spend less than I make. My Brother lives in the same low cost of living area, makes around $60K/yr and spends every penny. He even had to hold off on buying groceries a few weeks ago until payday. I am the odd one, he is the norm. I don't get it but that's the way it is.

 

[pdxgal]

To me people living paycheck to paycheck often make due because its a sliding scale in their lifestyle. Lots of people I know are bank poor but junk rich.
Many of them go out and buy the 4 wheeler, fishing boat, trailer, new compound bow, etc when they have money so it never sits in the bank and when they need money.. well they always seem to have something they can sell to make ends meet.

Go to any auction, garage sale, etc and see just how much "stuff" some people really have

Reminds me of a stat I read somewhere ("The Millionaire Next Door"?) that many auctioneers are quite wealthy, supposedly because seeing so much stuff sold for pennies on the dollar reinforces LBYM and not buying a lot of stuff in the first place (at least not new, at full price).

 

[Gumby]

Reminds me of a stat I read somewhere ("The Millionaire Next Door"?) that many auctioneers are quite wealthy, supposedly because seeing so much stuff sold for pennies on the dollar reinforces LBYM and not buying a lot of stuff in the first place (at least not new, at full price).

That was definitely in TMND.

 

[street]

I don't know. I'm still working and make about $100K wages income, no debt, paid off home, in what is considered a lower cost of living area (except for taxes), and I feel like I'm poor because the costs are going up so much - far more than the 7.5% figure that gets thrown around. I even cut down my retirement withholding to $27K this year to increase my paycheck. Most people earn less than me and waste more money.

Thanks, and you are a good candidate from experience. I guess I have always thought most everyone that works for 30 to 40 years are very well off. I guess I'm pretty naive thinking most are wealthy and could retire anytime but than why don't they.

 

[Freedom56]

Would it surprise people to learn that most financial advisors live paycheck to paycheck? I know five of them that do. They spend money to keep up an image such as drive a 7 series BMW, pay for country club memberships, spend money entertaining and meeting others to find their next mark. These days they are funding their spending binges through mortgage refinancing with cash out and sinking deeper into debt.

 

[Teacher Terry]

I ate a turkey sandwich for lunch 4 days a week for 20 years. On Friday I would go out with people from work. When I cook I eat the same thing 3 days in a row.

 

[Amethyst]

Making large, three-day batches of really good stew, chili, etc. saves so much time on days I don't have time to cook!

As for eating the same thing 3 days in a row: I usually put 2 days' worth in freezer containers, and make something else (omelets, spaghetti) on the days in between.

I ate a turkey sandwich for lunch 4 days a week for 20 years. On Friday I would go out with people from work. When I cook I eat the same thing 3 days in a row.

 

[Amethyst]

I don't know any FA's personally, but used to be close to someone who was very knowledgeable about money and investing. He even did some kind of one-month internship on Wall Street. So, he understood all those arcane investing concepts that somehow escape me, and was full of advice.

Unfortunately he was always using that knowledge to chase the big win; last I heard of him, he'd lost his shirt, then his home, and was living in his girlfriend's house.

Would it surprise people to learn that most financial advisors live paycheck to paycheck? I know five of them that do. They spend money to keep up an image such as drive a 7 series BMW, pay for country club memberships, spend money entertaining and meeting others to find their next mark. These days they are funding their spending binges through mortgage refinancing with cash out and sinking deeper into debt.

 

[NW-Bound]

People living paycheck to paycheck?

How fortunate! ERs don't even get any paycheck.

 

[old medic]

We have spent a lifetime living check to check, and still do. We both get paid at the end of the month. We pay our regular bills, then half the balance gets split between savings and outstanding CC Debt. Keep in mind the 3 CC balances are 0% purchases for building supplies, and have nearly 10X in savings and growing.

 

[Dtail]

It really is hard to believe how much money people spend. I make less than $20K/yr and always spend less than I make. My Brother lives in the same low cost of living area, makes around $60K/yr and spends every penny. He even had to hold off on buying groceries a few weeks ago until payday. I am the odd one, he is the norm. I don't get it but that's the way it is.

You will have interesting conversations with him when you both retire.

 

[punkinhead]

I don't know. I'm still working and make about $100K wages income, no debt, paid off home, in what is considered a lower cost of living area (except for taxes), and I feel like I'm poor because the costs are going up so much - far more than the 7.5% figure that gets thrown around. I even cut down my retirement withholding to $27K this year to increase my paycheck. Most people earn less than me and waste more money.

That's the key and also why they are able to muddle through even during inflationary times - they cut down on the waste a bit. I live in a good neighborhood and my neighbors are all professionals making good but not obscene salaries. I don't know their detailed financial situations, but to hear them talk they have very little savings and are living paycheck to paycheck. They and their kids have the latest iPhones, drive less than 3 year old leased cars, and take expensive vacations. There's a lot of fat to trim when times get tough.

 

[Amethyst]

And then they go back to ignoring them, because savers are so boring.

lol...the ones I know "get by" by hitting up the savers in the family for money

 

[scrabbler1]

Back in my working years, I did short-term, back-of-the-envelope budgeting to identify surpluses I could save/invest elsewhere, whether it was a linked savings account or an investment with a brokerage firm. Unless I had a lumpy expense coming up, such as a car insurance or income tax bill, I usually had something every month I could move elsewhere. Even back in my early days of working, I still had some surpluses most months, so I rarely lived from paycheck to paycheck. After I paid off my mortgage in 1998, I was basically covering my remaining bills with one biweekly paycheck and able to save/invest the other.

Once I ERed, and biweekly paychecks became monthly dividend payments, I turned this into a spreadsheet so I could plan this out for the entire year. Most months I had surpluses although the rising cost of HI (before I got back on the ACA premium subsidy train in 2020) was making some of them disappear.

I can't imagine going through life rarely or never having these investible surpluses and barely or not able to pay my bills every month.

 

[Badger]

https://read.gov/aesop/052.html

What's new?




Cheers!

 

[Time2]

If we got what we really deserve, we'd all be burning in Hell right now.

Thank God there is no such place!

 

[ShokWaveRider]

Thank God there is no such place!

+1

 

[athena53]

Would it surprise people to learn that most financial advisors live paycheck to paycheck? I know five of them that do. They spend money to keep up an image such as drive a 7 series BMW, pay for country club memberships, spend money entertaining and meeting others to find their next mark. These days they are funding their spending binges through mortgage refinancing with cash out and sinking deeper into debt.

DS is a claims adjuster and one of his early stories was a financial planner who'd brought his Cadillac Escalade in to be detailed. The place went up in smoke and so did the Escalade. DS was working for the company that insured the detailing place. The claimant repeatedly reminded DS, "I am a Certified Financial Planner". He wanted $75K because that's what he paid for it and it was less than a year old. It wasn't worth that, of course. DS made him a fair offer but he complained that that would leave him upside-down on his loan.

DS told me, "I'd never have someone upside down on a loan on an Escalade manage my finances".

 

[TheWizard]

We have spent a lifetime living check to check, and still do. We both get paid at the end of the month. We pay our regular bills, then half the balance gets split between savings and outstanding CC Debt. Keep in mind the 3 CC balances are 0% purchases for building supplies, and have nearly 10X in savings and growing.

I did/do similarly, but I don't think that counts.
If you have many thousands in taxable savings/investments, then you/I have an oversized emergency fund that allows you/me great financial flexibility.

Back in my 30s, I had not yet maxed out my 403(b) annual contributions and was increasing them by 2% of salary each time my annual raise came in. With minimal savings, that was the closest I came to living check to check. But I never carried over a CC balance.

The real problem is folks who spend too much relative to income and carry CC balances that they are "unable" to pay off this month or next...

 

[HawkOwl]

I believe that this number, while shooting up in 2022, is still lower than it was in 2020. Of course that headline doesn’t sell newspapers.

 

[Amethyst]

When I moved from Florida to Maryland to take the job that became my career, I barely made enough after taxes to pay my bills and buy groceries, and make long-distance calls, which were rather expensive back then.

I couldn't stand the idea of not saving anything, so I cut back on groceries and didn't go out to office lunches (which caused criticism). I managed to put away about $20 per paycheck, until the day I snagged a time-and-a-half overtime gig one night a week.

I saved most of that overtime, and bought muni bonds with it, that paid 10% tax-free! Also, All Saver Certificates - anyone old enough to remember those? I maxed out mine.

Five and a half years later, with no financial help from anybody, I bought a new car and a small house.

Back in my working years, I did short-term, back-of-the-envelope budgeting to identify surpluses I could save/invest elsewhere, whether it was a linked savings account or an investment with a brokerage firm. Unless I had a lumpy expense coming up, such as a car insurance or income tax bill, I usually had something every month I could move elsewhere. Even back in my early days of working, I still had some surpluses most months, so I rarely lived from paycheck to paycheck. After I paid off my mortgage in 1998, I was basically covering my remaining bills with one biweekly paycheck and able to save/invest the other.

Once I ERed, and biweekly paychecks became monthly dividend payments, I turned this into a spreadsheet so I could plan this out for the entire year. Most months I had surpluses although the rising cost of HI (before I got back on the ACA premium subsidy train in 2020) was making some of them disappear.

I can't imagine going through life rarely or never having these investible surpluses and barely or not able to pay my bills every month.

 

[jkern]

It really is hard to believe how much money people spend. I make less than $20K/yr and always spend less than I make. My Brother lives in the same low cost of living area, makes around $60K/yr and spends every penny. He even had to hold off on buying groceries a few weeks ago until payday. I am the odd one, he is the norm. I don't get it but that's the way it is.

My sister-in-law in the big spender of all big spenders. Just a sampling of spending over the last year or two:

New pool and back yard landscaping: $120K
New Audi SUV: $95K
Fly to Paris to buy Birkin Handbag: $15K
New Diamond ring: $40K
New Porche 911: $160K
New Rolex watch: $20K
Vacation to Dubai: $25K
Multiple other vacations: ?
Replace 5 year old granite counter with new granite counter: $7K

This is just what I know about.

 

[Gumby]

None of that is a problem provided she has sufficient yearly income. IMO, you can spend as much as you like on anything you like, so long as you don't complain to me about having no money or expect me to help pay for it.

 

[Music Lover]

None of that is a problem provided she has sufficient yearly income. IMO, you can spend as much as you like on anything you like, so long as you don't complain to me about having no money or expect me to help pay for it.

If everyone was frugal the economy would collapse.

I get to enjoy the convenience of a credit card and even collect $800 a year in reward money because there are enough people that carry a balance.

 

[tmm99]

With high gas prices, I hope those people can make it... Many of them will have to come up with extra few hundred dollars a month...