Living Paycheck to Paycheck?

[JanH]

Re: Living Paycheck to Paycheck?

thank you for posting this... interesting comments... i learned a few new ideas....
i think some ppl. are just not educated enough to manage their financial picture....they do not know what to do...

It seems that a lot of us have to use trial and error to learn. I wish finances were something taught in school. A lot seem to learn from watching their parents. Unfortunately, we still won't learn from their mistakes unless we discuss it. Finances and politics weren't discussed by family members in my parents' generation nor ours. So I think you are right when you say we aren't educated in our finances. That's why I am here!

[Ima saver]

Re: Living Paycheck to Paycheck?

It is hard for me to believe that anyone can earn 6 figures a year and still live paycheck to paycheck. For years, my dh and I working together, earned less than $20,000 per year and we got by ok.

[vsjhoc]

Re: Living Paycheck to Paycheck?

It is hard for me to believe that anyone can earn 6 figures a year and still live paycheck to paycheck. For years, my dh and I working together, earned less than $20,000 per year and we got by ok.

Every situation is different.

They might be living in a major city where the cost of living is so high that they can't buy a decent house for less than $500,000.

A couple might be paying back $200,000 of debt from their graduate student loans.

They might have, hmmmm, let's imagine ... a lot of credit card debt?

[Elgin526]

Re: Living Paycheck to Paycheck?

It is hard for me to believe that anyone can earn 6 figures a year and still live paycheck to paycheck. For years, my dh and I working together, earned less than $20,000 per year and we got by ok.

You couldn't do that here, even if you rented. If that is after taxes and if you had no children and if you had no debt AT all, even for a car, you might barely squeek by, but you wouldn't have any savings and an emergency could wipe you out. That's so low I think you'd qualify for food stamps or some kind of other aid.

DH and I grossed $100,000 last year including DH's overtime. We live in a modest house ($180,000 and that is CHEAP for this area, unless you want to live next door to a crack house) and have only one car payment and no kids. While we did not live paycheck to paycheck (we are paying down debt and I put money in my 401k), we did not have a lot of money left over, either. Now we ARE paying down debt, so once that's paid off we'll have a lot more money every month, but a lot of that money will have to be invested for long term savings goals and by then we'll have at least one child (I hope) and our monthly expenses will be higher due to that. It's sad to say, but $100,000 just doesn't go as far as it used to.

[MonkeyMama]

Re: Living Paycheck to Paycheck?

Every situation is different.

They might be living in a major city where the cost of living is so high that they can't buy a decent house for less than $500,000.

A couple might be paying back $200,000 of debt from their graduate student loans.

They might have, hmmmm, let's imagine ... a lot of credit card debt?

Um yeah. Not so much debt but expensive housing.

Excessive lifestyles for sure though.

Throw in income taxes, daycare, and insane health care costs, $100k doesn't get you far in the big city.

[Ima saver]

Re: Living Paycheck to Paycheck?

Guess that is why I have always been a country bumpkin! You have to remember I was brought up in the era when you just bought what you could afford.

[vsjhoc]

Re: Living Paycheck to Paycheck?

I was brought up in the era when you just bought what you could afford.

Too bad it's such a foreign concept to so many people today!

Did anyone see the Saturday Night Live skit last year with Steve Martin? It was an infomercial for staying out of debt or something like that. He and his wife were presented with this small book that just said "Don't Buy Stuff You Can't Afford!" It was tragically funny how he couldn't understand the concept of saving up money to buy something.

[kealina]

Re: Living Paycheck to Paycheck?

Too bad it's such a foreign concept to so many people today!

Did anyone see the Saturday Night Live skit last year with Steve Martin? It was an infomercial for staying out of debt or something like that. He and his wife were presented with this small book that just said "Don't Buy Stuff You Can't Afford!" It was tragically funny how he couldn't understand the concept of saving up money to buy something.

I saw that skit... DH and i thought it was amusing and tragic too... it was an information for how to stay/get out of debt and i think they were selling a leaflet but all it said when you opened it was "don't buy stuff you can't afford" and i think they maybe had another leaflet that had a variation on the phrase... something like "if you don't have money, don't buy stuff"...

[disneysteve]

Re: Living Paycheck to Paycheck?

You have to remember I was brought up in the era when you just bought what you could afford.

The problem today is people have changed their concept of "afford" to include something purchased on a credit card as long as they can handle the minimum monthly payment.

I use credit cards constantly, but my idea of afford is if I can pay the bill in full when it comes at the end of the month.

[abowers]

Re: Living Paycheck to Paycheck?

I take it to mean:
2. If you didn't get the next paycheck, you would have nothing left in the world -- no money in savings -- and would have to incur (more) debt.

I kind of see myself as in this position -- As a grad student, with my paycheck alone right now I am not making enough money to pay all my bills. Which is one reason why I babysit an extra 10-16 hours a week. Which gives me extra money, enough to save, and enough to not have to tap into unsubsidized loans for Grad school to cover living expenses.

I'm taking out just the subsidized loans to cover the tuition my assistantship doesn't, and that leaves me with a couple hundred extra each semester -- which goes for buying textbooks. Whatever's left goes into the emergency fund, which is where the money comes from when I need to pay for my eye exam and contacts that are not covered on my grad-student-insurance plan.

I've managed to put together about $2000 in an emergency fund though since the summer, while also cutting my credit card debt in half.

[lillyb]

Re: Living Paycheck to Paycheck?

Most everyone I know live paycheck to paycheck. I didn't know any different growing up, or when grown until I finally woke up last year. Everyone I know spends everything they bring in, and can't think of anyone with any kind of savings. Most people in this area would have major financial difficulties if they missed just one paycheck, that, to me, is living paycheck to paycheck. Friends, tons of family.. no thought to the future at all.

Am in the process right now of saving up what will be about 5 months living expenses in an emergency fund. Finally getting off that paycheck to paycheck train and never wanna be that person that shoves their head in the sand again.

[Elgin526]

Re: Living Paycheck to Paycheck?

Guess that is why I have always been a country bumpkin! You have to remember I was brought up in the era when you just bought what you could afford.

But at the same time it's getting harder to afford things! We make six figures and can barely afford a fixer-upper in a so-so neighborhood in a town with horible schools. It's not just overspending on stuff a person doesn't really need, the basics of a middle class lifestyle are getting harder to pay for. Overspending IS part of it, no doubt about it, but the cost of living in many areas is getting out of hand too.

[ren]

Re: Living Paycheck to Paycheck?

I believe, no, I know a lot of people live check to check. Now, there's the random stories from friends and coworkers, but the big thing is my claimants. See, the account I work on, the employees are paid biweekly. CA workers' compensation is also paid biweekly, so there should be no problem, right? They know how to budget for a check every other week already. Well, not quite -- we don't match the account's payroll schedule, we start counting from the first day off work, plus 2-3 days for the check to get there.

There have been so many times when I have had claimants call and say things like "But I only got $X in my paycheck and you aren't paying me until next week, how am I supposed to pay my bills?" It's amazing to me, because these are often people making twice or even three times what I make (according to their wage statements) and apparently they don't have a dime put away.

Damned good incentive to save money for a rainy day though. I would be ashamed to call someone who knew how much money I make and admit that I couldn't make this month's rent because my disability check wouldn't be issued for another week.

[abowers]

Re: Living Paycheck to Paycheck?

But at the same time it's getting harder to afford things! We make six figures and can barely afford a fixer-upper in a so-so neighborhood in a town with horible schools. It's not just overspending on stuff a person doesn't really need, the basics of a middle class lifestyle are getting harder to pay for. Overspending IS part of it, no doubt about it, but the cost of living in many areas is getting out of hand too.

We are making ~$40k/year, combined, as 2 graduate students with a dog, living in an apartment in a very expensive area, saving for a wedding, and paying for a new car, and we are getting by.
I can't wait til we have real income in a couple years. Sometimes I think we won't know what to do with the money, then again, I'm sure we'll adjust our spending... not to mention we'll be at a point where we can buy a house once grad school is over.

[BCHGRL]

Re: Living Paycheck to Paycheck?

I think "living paycheck to paycheck" is a lifestyle that can be defined in different ways. The bottom line is that your whole livelihood is dependent upon the next paycheck. I have lived paycheck to paycheck in the past for two different reasons.

I lived paycheck to paycheck when I was in college. I would say that I lived paycheck-to-paycheck more out of necessity than stupidity.

I lived payday to payday for a few years of my early twenties. I called myself the payday princess. I treated myself like a princess the weekend after I was paid, but I was a pauper by the following week.

I still live paycheck to paycheck. Our budget is based on our bi-weekly paychecks. However, if there were no paycheck, our bills would still be paid and we wouldn't be hungry.