Paycheck to paycheck

[disneysteve]

Twice in the past few days I've overheard conversations in my office amongst co-workers that really make me wonder how these people function in life.

1. The women all agreed to support some "adopt a family" holiday gift thing. I don't know the details but basically you get a list of what the people have asked for and you pick something to donate. Apparently, they were all under the impression that they had to turn in the gifts next Friday. They found out yesterday that it's actually this Friday. The response of one woman: "This isn't a pay week. There's no way I can buy a gift this week."

2. The other day, a different woman wanted to give another co-worker money for something they were doing. The other woman said she didn't need the money yet and to wait. The first woman said: "Take it now because I may not have any money next week."

I just don't get it. How do you spend every penny you have week after week? If you can afford something this week, why wouldn't you be able to afford the very same thing next week? If you have extra money during a pay week, why don't you have extra money in the non-pay weeks? Why can't you just put that money aside and hold it until you need it?

This also reminds me of something my mother-in-law told us years ago. Where she worked, they were paid weekly. The owners wanted to shift to paying every other week, which is a pretty normal thing, as it would cut down on payroll costs. So many employees complained that they wouldn't be able to live with no money for a week during the one week transition to the new schedule that they were forced to not do it. I can't imagine going through life without even one week's worth of money set aside.

[97guns]

Unfortunately this is how America lives in this credit based economy, when I get my monthly rents I like to cash the check ASAP before they decide to buy some food for the kid or something they actually need

[Butterscotch]

This is super judgmental. If you want to know about their circumstances then ask them. You might be surprised by people's personal struggles.

[autoxer]

Why can't you just put that money aside and hold it until you need it?

You mean they should plan for the future!?!

[Nika]

Are they office admins getting paid somewhere near $12 an hour? In which case, being judged by someone with Dr. salary is a bit insensitive.

They also could have an elderly mother they are supporting, college they are cash flowing, or if there is a special need child or a medical issue with anyone in the family... I don't know if you know them well enough to know what their issues are. There are certainly enough people out there that make bad choices, but not all of them. But yes, I also find those kind of conversations fascinating.
(especially if coming from those who make same or more than me).

[tripods68]

We follow a strict monthly budget and so when I spent my allowance before an the office party or events (unless I pay it in advance) I say "No" to a lot of them. I take this as a badge of honor--sticking to my budget and being weird. Sometimes, I get comments like "Man...glad you didn't go, cuz that party suck!!". I just smile

Unless people are following a regular budget, most people are just living a normal life working, living paycheck to paycheck. Its okay to say "No" to events when you don't have the money but most people have pride often say yes to a lot when they can't afford. But I don't over-analyzed this situation. The reality is their just living a normal life.

[phantom]

I have a co-worker who is a Dave Ramsey follower and generally pretty good with money. But, he'll occasionally tell people he can't afford to go out to eat or buy a game or something till next pay day. Knowing him, I take that to mean that he's spent all of the money fun money in his budget and needs to wait for the budget to reset. I think "I can't afford that" is just an easier phrase than "that doesn't fit in my budget right now" sometimes. I assume that "I can't afford it" is short for "I can't afford it and do all the other things I was planning on doing with my money without making some changes that I'd rather not make."

Also, I could totally imagine myself in the place of woman #2. I don't carry much cash and I seldom get to the ATM to replenish my cash supply. If I owe you money, and I actually have the cash on me, you should take it, because there's a reasonable chance I won't have the cash on me the next time you see me.

[disneysteve]

I have a co-worker who is a Dave Ramsey follower and generally pretty good with money. But, he'll occasionally tell people he can't afford to go out to eat or buy a game or something till next pay day. Knowing him, I take that to mean that he's spent all of the money fun money in his budget and needs to wait for the budget to reset.

That makes sense. If someone is on a strict budget, especially a cash-based one, that would explain this.

[/quote]Also, I could totally imagine myself in the place of woman #2. I don't carry much cash and I seldom get to the ATM to replenish my cash supply. If I owe you money, and I actually have the cash on me, you should take it, because there's a reasonable chance I won't have the cash on me the next time you see me.[/QUOTE]
This also makes sense. There's a big difference between "I don't have any cash on me right now" and "I don't have any money". That said, we've discussed before that I don't really "get" not carrying cash even in our electronic digital world. Sometimes you just need cash. This is something we've always drilled into our daughter's head. Just because you have a debit card and a credit card, you still should never walk out the door without cash in your wallet.

To those who felt I was being judgmental, that wasn't the point at all. I was trying to understand the mindset here. phantom has given two perfectly good reasons why situations like this could happen.

[97guns]

Could be nothing more than urban legend too

[Joan.of.the.Arch]

This reminds me of a couple I knew. One was a petroleum chemist, the other a professor. They told me they had made a deliberate effort to stop saying to their 10 year old, "We can't afford that."

They had been teaching her that her family's income was well above average (They wanted her to mature into understanding her privileged position.) and that they had a responsibility to use their money wisely regardless of how much it was. "We can't afford that" was not exactly the truth, but had become a shorthand way to quickly dismiss the request. So instead, they would have longer conversations about weighing the choices and goals when the child suggested they buy something.

[creditcardfree]

This reminds me of a couple I knew. One was a petroleum chemist, the other a professor. They told me they had made a deliberate effort to stop saying to their 10 year old, "We can't afford that."

They had been teaching her that her family's income was well above average (They wanted her to mature into understanding her privileged position.) and that they had a responsibility to use their money wisely regardless of how much it was. "We can't afford that" was not exactly the truth, but had become a shorthand way to quickly dismiss the request. So instead, they would have longer conversations about weighing the choices and goals when the child suggested they buy something.

I've tried really hard to stop from saying this as well. I say we have the money, but that isn't what the money is for. It's for college, emergencies, car repairs, retirement and explain that only so much is left each paycheck for extras or wants.

[LivingAlmostLarge]

I think many people follow weekly budget here I've seen a lot. They budget X for eating out or groceries for the week, whether it be cash or credit card. That's it. I think a lot of people on tight budget don't have weekly flexibility and you aren't necessarily living paycheck to paycheck.

Before we used to be like that when we made very little and had basically pennies at the end of the month. Weekly that was it after our spending was done. Sometimes we were those people waiting for the CC to close or waiting to fill up gas. The budget was very tight so we didn't overspend a penny. Did we live paycheck to paycheck? Yes and no.

We had a tight budget because we had a small safety net. We didn't make much $45k combined at the time in Southern California. We didn't want debt. So money was really tight.

[Petunia 100]

When my son was little, I realized one day that he thought we did not have any money. Like, none at all. That was not the message I wanted to send. I learned to tell my children "we don't have money to spend for that".

[ua_guy]

It's probably a status quo that develops over a long period of earning low wages. I've seen it happen before. Things happen, and to recover takes a long time when you don't earn much, and sometimes those things take out your credit so you either don't have credit, or the remaining credit you have is financing the last family emergency at an extremely high rate.

A lot of people chalk this up to "poor money management" but it's a situation nobody talks about but that a majority of Americans are in. Low wages support meager lifestyles, but that's not enough when bad things happen. It takes too long to save and too long to replenish savings when bad things happen. If these income earners are unable to find or qualify for higher paying jobs, then they are stuck in low income situations, can't get credit, etc.

We live in a small town. The restaurants get busy on pay day. The grocery store gets busy on payday too, especially for the people who are paid weekly.

[pflyers85]

Are they office admins getting paid somewhere near $12 an hour? In which case, being judged by someone with Dr. salary is a bit insensitive.

They also could have an elderly mother they are supporting, college they are cash flowing, or if there is a special need child or a medical issue with anyone in the family... I don't know if you know them well enough to know what their issues are. There are certainly enough people out there that make bad choices, but not all of them. But yes, I also find those kind of conversations fascinating.
(especially if coming from those who make same or more than me).

The sad thing is its not just low income people that are living paycheck-to-paycheck. 76% of Americans live paycheck-to-paycheck. 62% don't have $1000 saved in a savings account and even more troubling 21% don't even have a savings account. Stagnant income doesn't help matters but the truth is most Americans spend too much money. The economic and monetary policy of our Federal government and the Federal Reserve bank encourages over consumption so not all blame falls on individuals. However, as an individual you don't have to live like everyone else. There are plenty of people that do earn a modest income that could easily change their spending habits and cut back and not have to live paycheck-to-paycheck.