I think it's more the first
A $500 surprise expense would put most Americans into debt
Basically means no savings whatsoever so one missed paycheck would put a person into debt
New Survey: 78% of US workers live paycheck to paycheck
- Thread starter El_Tiguere
- Start date
I think it's more the first
A $500 surprise expense would put most Americans into debt
Basically means no savings whatsoever so one missed paycheck would put a person into debt
I don't think this number is particularly meaningful. Even higher wage workers can live paycheck-to-paycheck if they constantly spend money. It's not hard to find things to spend your money on.
Looking at income is far more meaningful imo.
Looking at income is far more meaningful imo.
LegendofJoe
Member
Is anyone else seeing a Geico ad on this page? Save money today for more avocados tomorrow.
Lmao, touche Geico
Lmao, touche Geico
Netherscourge
Banned
Stop buying iPhones and you'll all be fine.
Obliterator
Member
The current wealth distribution is sickening. Nothing will change though because you have tons of people like my father is who is by no means rich always yelling how the top 1% should be taxed even less than they are now so they can "create jobs"
El_Tiguere
Member
Unfortunately, the CPI falls short in reflecting the true inflation in basic necessities being felt by Americans. There are many charts out there, but this is a good one for reflecting the inflation in things that hurt Americans the most.
The big inflation party truly began in the 1980's, because Wall Street figured out how to issue debt, and how to package it into nice buckets that could be sold to investors. Investors are always hungry for returns, so the demand was there to issue more mortgages, auto loans, student loans, etc. etc. etc. Despite a few booms and busts (investors always get bailed out by the government) the binge has kept growing and growing.
We are theoretically at a point where it is harder and harder for financiers and corporations to squeeze more disposable income from workers. Our entire economy once again is staring at the precipice of credit defaults leading to an all-out financial crisis (across the world this time).
Netherscourge
Banned
Child Care has become INSANELY expensive.
It's more expensive than monthly mortgages in many cases.
It's more expensive than monthly mortgages in many cases.
CreepingFear
Member
I live in fucking Southern California. Pay me more and I could definitely save/invest.
AdventureRacing
Member
My partner and I have a good combined income (over 200K combined pre tax though this is in Australia). The credit union we're with offered us a loan of 1.5 million. That's just a ludicrous amount for us. I also find it interesting that they ask if we have any dependents but don't ask if we intend to have any. We don't have kids now but likely will I'm the next couple of years. That seems pretty important when giving out loans which will be payed off over 20-30 years.
You really have to be careful. Banks will lend you massive sums that could easily see you in bad debt trouble if your situation changes at all.
Narpas Sword0
Member
Congrats on hitting working age before the crash, great job
Yes! It is crazy how expensive child care is. People who live near their family and get free child care or who can arrange their schedules in a way that they avoid child care expenses have an enormous advantage.
America has basically priced children out of a range that many people can afford. Reproduction has become a luxury. It's disgusting and wrong.
There's a lot wrong with this post, but understand something- people who started when you did had a great advantage. I have coworkers who have no college degree or an AA. They are older and started 10-25 years before I did. I had to take on 35k in school debt to get to the same position that they are in. Personal responsibility/accountability? In a country where having a bachelor's degree is, in some areas, like having a driver's license? We are forced into mandatory debt.
Clockwork
Member
But all my gains were made post recession...
Narpas Sword0
Member
But all my gains were made post recession...
Yes, the people who already had a stable foundation got richer after the recession. That's what this topic is about.
Edit - I should add I'm in a similar (better) position than you. But I'm not patting myself on the back for it. I got lucky and many many others got fucked.
Angelus Errare
Banned
Yes, yes you are. Your entire tale is about bootstraps dude lol. "If I made it, anyone can make it" is like THEE bootstrap story people tell folks.
Yep, depending on your circumstances it is cheaper and more convenient to hire a nanny or au pair.
superdeluxe
Member
Saw an article about 2 lawyers making a combined 500k in New York and they claim they were living pay check to pay check
Jesus fuck, that's insane. I don't know how student loans (and subsequently its debt) work in the US, but in the UK if I was earning, say, £80K I'd have about £470/mo taken off for student debt repayments.
You two are either killing it professionally, or the system is shit.
Ziltoidia 9
Member
Maybe someone will tell wall street to cut it out.
I know my fair share of such attorneys. They are living paycheck to paycheck due to life choices aka living way beyond their means and refusing to live outside of NYC.
This is true, our 5 month old starts daycare next month. Costs about $50/month more then my mortgage
That is the biggest factor. What many people consider essential really isn't. The latest smartphone. A nicer car than is necessary. A bigger home (rent or own). Entertainment and eating out.
How many people really try to save? I mean REALLY try? Living for the moment and spending everything they've got is much more popular. They will even go into considerable debt just to live more comfortably.
It is a bit of a shame. Just a reasonable amount of regular saving and investing can make a big difference when it comes time for retirement. Especially in the last decade when the stock market has been a bull market. Investors made money.
But saving and investing? Bah! Gotta have that avocado toast.
I think there are two perspectives here because I've heard the same from some very good corporate finance professionals. I've gotten advice to absolutely stretch as far as you can and buy just up to what you can afford. Your income should theoretically continue to increase and in a few years what you could once only barely afford will be affordable, and in 15-30 years, your return on equity is going to be off the charts. With interest rates as low as they are, you are basically running your own private equity shop.
On the other hand, you better not lose your job or move in 5 years or you ruin your own IRR. Some people don't like flying by the seat of their pants for a few years either.
Clockwork
Member
The problem with this (and I am sure it's all relative) is that I really haven't made it.
I don't make a ton of money but do consider myself fiscally responsible. I am no stranger to being poor (after my parents got divorced there were times where my family was on welfare/foodstamps, lived in a mobile home, wore second hand clothes, etc).
I am saying you don't need bootstraps for at least a somewhat financially healthy existence. I save now making a mediocre salary and I saved when I made a whole hell of a lot less.
superdeluxe
Member
superdeluxe
Member
This is true. They Had in their budget private schools/sportshobbies, multiple vacations and vehicles
AdventureRacing
Member
This isn't just an American thing. Here in Australia child care has also reached insane levels when it comes to how much it costs. Also depending on where you live it can be hard to actually get access to child care and you may end up on a waiting list.
Having a supportive family can end up saving you 10s of thousands of dollars on child care.
Raylan Targaryen
Member
You said you're in Wisconsin I believe, the cost of living is cheaper than some of the places a lot of these GAFers are talking about. You said you're paying ~$1300 for your house, that wouldn't even get you a shack here in New York.
Clockwork
Member
Why do people always want to make it seem like CA and NY housing (insert other major metropolitan city) markets are the rule and not the exception?
Plenty of places in the US that are just like here.
Narpas Sword0
Member
*78% of the population cuts up their credit card and decides to only buy what they absolutely need
*every movie company goes out of business
*every ice cream and snack company goes out of business
*every car company goes out of business
*every restaurant goes out of business
*every college goes out of business
*everyone gets laid off
*everyone moves to live in a shack in rural Nebraska
Shit everything is perfect now, what were they waiting for
*every movie company goes out of business
*every ice cream and snack company goes out of business
*every car company goes out of business
*every restaurant goes out of business
*every college goes out of business
*everyone gets laid off
*everyone moves to live in a shack in rural Nebraska
Shit everything is perfect now, what were they waiting for
Or don't have any or multiple kids until you can support them without financial difficulty.
Having kids is a choice. A very big financial choice.
Vicetrailia
Banned
The problem with most Americans is spending. You'll find that most savers are only saving because they are making good money now, but when they weren't they were paycheck to paycheck. Such great savers right. Brute strength rather than discipline is the norm.
It's personal responsibility, but also more as well including declining classes, increasing expenses and etc. We can do something about all of this.
It's personal responsibility, but also more as well including declining classes, increasing expenses and etc. We can do something about all of this.
Raylan Targaryen
Member
I'm not trying to make it seem like anything, just speaking from personal experience and I know a lot of users also live in NY and CA, which is why although you may live comfortably, many of us cannot.
Narpas Sword0
Member
A lot of people won't have any kids at all. Ask Japan about that.
Say it with me now: CAPITALISM IS FAILING
Edit - also in vast swaths of this country ending pregnancy is barely a choice and information on avoiding it is not shared
Inferno313
Banned
I've got about 2k in savings, and I realize that's a lot more than most have. It's pretty fucking tough out there right now.
Granted, I'm only 24, still in my first post-college job. Hoping to move up into something else within the next year.
Granted, I'm only 24, still in my first post-college job. Hoping to move up into something else within the next year.
Good Guy Gone Bad
Member
Very true for me. Saving has become the norm for me once my wages outpaced my expenses and I didn't stupidly incur more expenses.
Muppet of a Man
Member
People on this very forum don't seem to grasp that these 3 things are vastly more important and will always be more important than their precious electronic gadgets and other disposable garbage.
We are being sold that addictive shit en masse to distract us while the rug is being swept out from under our collective feet. Wake up before it's too late.
We are becoming a rentier economy where a tiny uber rich minority tightly controls our entire existence at a blazingly fast rate and we (formerly) middle and working class people are going to be indefinitely fucked due to it.
Part of this is that affordable places to live are not very nice either. If you have a family, you aren't gonna move to places stricken by poverty if you can help it. So you will stretch to go to better areas, and real estate owners know his, so they will jack up the prices. And since there is no regulation for this, people will go beyond their means and get blamed if they fail.
Capitalism is bitch of you are on the wrong side of the fence. If you want to improve people's lives without handouts, then you have to regulate to prevent things from getting out of hand
Capitalism is bitch of you are on the wrong side of the fence. If you want to improve people's lives without handouts, then you have to regulate to prevent things from getting out of hand
Narpas Sword0
Member
1. Those three things already absorb 90%+ of many people's budgets, before they can think of having fun
2. Having fun is part of life and shouldn't be limited to 22% of the population
3. 78% of the population shouldn't have to live without the benefits of the advancements of the 21st century, either
Wages need to be higher, and they won't be if we create a circular firing squad of victim blaming
butzopower
proud of his butz
But do you have a house or do you rent? If you got a mortgage, you ain't living paycheck to paycheck, you're investing.
I think 78% is too high a number for personal responsibility or personal finance to be the problem. I just don't like looking at problems affecting that big a chunk of people and blaming them on personal failings. If it's that widespread, then I think it indicates systemic problems.
As terrible as this is short-term, long-term it'd be a good thing. The economy can't continue to be based primarily on consumer spending, especially as everyone who is contributing can't afford it and because of the massive negative externalities related to the environment. I don't see any way to pivot everything without people collectively deciding to stop buy the shit they don't need.
Why not both? The high number can be the result of a lack of personal responsibility, tipping into greater problems because of the more precarious financial circumstances at large. It certainly doesn't excuse the latter, but it also doesn't address the former.
AdventureRacing
Member
The avocado toast reference makes me unsure if this is a serious post but I'll respond anyway. Posts like yours have been made throughout this thread and many people have explained the problems with it.
The first problem is that the whole economy is built around people spending their disposable income. If everyone suddenly became super frugal and saving every last penny the economy would take a huge hit.
The other problem is that your argument ignores all the significant factors leading to this problem only to focus on a less important issue to attempt to pin everyone's problems on personal self control. When a problem like this applies to the vast majority of the population that suggests that it's a systemic or social problem rather than an individual one.
Wages are stagnant. You now need to go into more debt via student loans to get those same low wages. The cost of living also continues to rise. This makes it harder for the average person to get by regardless of how well they save.
Sure if every single person became incredibly financially savvy and saved every penny they'd be better off. If you ate only the cheapest possible foods, spent nothing on any for of entertainment or things to enhance or your life and saved/invested every single spare cent you had you'd be better off financially. The reality is though that we're not all perfect and we can't all adhere to strict guidelines like that. Also it's unfair to expect poor people to make all these massive sacrifices just so they don't have to risk going bankrupt due to literally any negative unforeseen event.
Why shouldn't people be able to spend a little bit of their money doing things or buying things that make their life enjoyable? Should that be a privilege that's withheld only for the richest few percent of the population.
I'm not saying that financial education has no place in the solution to this problem. We absolutely should be teaching kids growing up far more about how to handle money and be inancially responsible. Compared to the other issues causing this problem it's simply another drop in the bucket. Also as things continue to get worse and the gap widens further no amount of financial prudence will allow the people at the bottom to avoid living pay check to pay check.
AdventureRacing
Member
So now we're getting to the point where a huge portion of the population is essentially priced out of having children? That or basically accepting that they will end up barely scraping by as a result. You're really ok with that?
For a lot of people if not the majority of people your suggestion would lead to them either never having kids or having them at an age where the health risks involved have went up substantially.
Im well aware of the financial responsibility of having a child. It's why my partner and I are waiting till after we're both 30 to have children despite being quite well off and having lots of family support.
Again though you're missing all the massive significant structural barriers making it difficult for people with children to get by and instead are trying to bring it down to a single minor issue, personal responsibility.
It probably means you spend as you earn, with zero potential to save up. Probably struggling with your grocery tabs on the last week of the month. Paycheck to paycheck.