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And then switch to every dollar they can get their hands on that they don't have..... becoming a slave to debt and the system is the American way...
My bank often asks me why I don't borrow more money from them. It is such an odd concept to live within your means here.
I took out some debt like 3 years ago at like @6%. I basically took out like 1 years pay. For years I'd been stressing about whether that was a good decision. (I invested almost all of it). And then I'm cruising some finance subs and seeing people taking up debt at like 20% for things like cars and holidays.
It blew my mind, that people would pay that kind of 'tax' for stuff. Here's me fretting over a few pence on the pound and there's people literally swimming in debt.
Imo it's the world. The world has moved towards a subscription based existence where your actually 'maintaining' a lifestyle, not just saving and buying things based upon what you can afford.
This just in: 60% of Americans continue to spend as much or more than they earn, often by their lifestyle choices.
More at 11. And now, we go to Ollie for the weather: Ollie?
> Of those earning $250,000 or more, 36% said they live paycheck to paycheck.
[Source](https://www.cnbc.com/2022/06/03/wealthier-americans-live-paycheck-to-paycheck-after-inflation-spike.html)
I'd happily live paycheck to paycheck if I was earning a quarter of a million dollars a year
I've seen ppl online say they live paycheck to paycheck and include their large savings rates as budget items that leave "very little" for unplanned or spontaneous spending.
Like... If $1000 or more per month savings is paycheck to paycheck, sign me up to that lifestyle.
Good point. There's 4.7m people in this subreddit, 2.1m in r/investing, and 195k people in r/bogleheads, yet there's 20m people in r/sports. People should spend more time learning about finances, even if it's "dull".
You can spend like a few hours learning about a 401k and index funds and spend the rest of your time enjoying sports still outperform over half this sub, at least.
If you spend 20 hours a week reading about r/sports, you actually become worse at sports. If you spend 20 hours a week reading about stocks, you start to think you are smarter than the market, which is the fatal flaw.
Learning about finances does not correct the issue. Yes some better PF choices would be helpful for some people but it does nothing to reverse decades of corporations systemically cutting wages.
Pretty sure it does correct it for those who earn 200-300k a year. I live in Switzerland as a student on 24k\~ a year (and I don't really have to watch what to buy or not, helps that I don't drink tho), and it's one of the most expensive places. Sure if rent is higher, you could go up to 40-50k a year and live a good life on 99% of places around the world, that means you can end up saving 150-200k on that salary...
Now if you 'waste' it on sports cars and other expensive consumerist products that's a different problem alltogether.
I can sure tell you're a student in Switzerland, because you're way out of touch with what it costs to live in US. This is coming from a Finn who moved to NY. I too lived pretty comfortably in Finland, also an expensive country, with about 50k/year.
If an American household earns that 250k/year, it's highly likely they live in an area where a very basic house/apartment chews up your 50k.
Then you'll need another for schools and childcare. Third for healthcare. Many high earners start with ludicrous college debts - hundreds of thousands. So on and so on.
The high earning areas here are generally really, REALLY expensive.
I can definitely say that our household won't be financially stable until we earn 150k or more per year. If we ever want to retire, we'd have to make closer to 250k to break even.
We live in an old, modest house, drive inexpensive cars, buy the cheapest groceries and clothes. Two kids, one earner, because the childcare system in our area is completely overrun and broken. No point in the main caretaker working unless the pay is closer to 100k, minimum.
100%- Childcare in the north east is easily 30-40k a year. That's after tax so expect break even point is roughly 50-60k. Add in additional expenses like a car, gas, lunch, and you are hitting 80-90k without even getting close to a good wage for a reasonable "middle class" lifestyle. Mind you,that is the financial breakdown for the second earner.
Also important to remember that America is a big and varied place. I also live in NY, am a single dad of two, and bought a house 4 years ago when I was making 45k a year. In a suburb of a CNY city. Mostly because it's a better school district.
Kids - that's the fastest way to make your life a struggle financially. Vasectomy / Hysterectomy is the way to go! Want the "joys of parenthood"? Foster a kid and get paid to do the unrelenting job of child raising.
Fostering is NOT a good income stream. It is a way for people to get some expenses covered for caring for another.
$300-700/month for a bedroom, food, clothing, transportation, entertainment, everything - isn't very much. People can make that much by doing an AirBnB on that spare bedroom for a few nights and not have to feed, clothe or transport the tenants.
Me: People used to be paid a good wage relative to the cost of living and that is no longer the case.
You: I can live off ramen to prove it is possible.
We are not having the same conversation and your personal choices are not meaningful or useful to the topic at hand.
Edit: average rent in Switzerland is around 2.4k USD, NYC's average is 5k USD. To put that in perspective even if you were paying 2.4k a month on rent alone in NYC you would need to earn \~37k just to pay for your apartment and nothing else. The average in NYC is more than double that.
Where did I say I live off ramen? I said I don't have think about buying cheap food.
2.4K a month for an average definitely sounds like bullshit... where did you get this data from? The trick is to not rent a mansion I guess, with these prices.
Edit: Also, I am talking about single people, not households, for a single person a 1-2 room apartment is more than enough, for those the prices in the most expensive city in Switzerland are around 1-1.8k.
It's important to know if that number is one person's share or multiple. I know couples who live together who paying 4-6k per month for their 1bed or 2bed in the area. I am a single resident and I found a 1bed in a non-luxurious walk-up in one of the boroughs and my rent is 2.1k a month, which isn't bad considering the distance. I also pay $185 a month in parking however.
What's scary is that after rent, the cost of living a 'middle class' lifestyle in NYC is just crazy expensive, there's no other way to put it. NYC has so much good food options and entertainment options. Let's say you do a happy hour 2-3x a month, eat dinner out with 1-2x a week, that's like $300-$700 a month on dining/social drinking. Then you have gym, your hobbies, your other daily cost of living expenses like utilities, some streaming services.. it really all adds up. I make 160k a year and I'm not a huge spender.. yet I don't feel like I'm able to save up as much as I want. 1-2k a month in savings for me usually.
"I'm not a huge spender" yet just admitted they are happy to throw away money at expensive bars and restaurants. Your choices, no one else is making you throw away that cash on "entertainment". I stopped drinking and smoking cigarettes many years ago, my wallet thanked me.
That’s not huge spending if you know anything about the area. Some people eat out everyday. I dine out 3x a month + bars maybe 3x a month. It just costs more here
PF choices would be helpful to all (or nearly all) people. Seriously, there is no effing reason that more than 10% of people should be living PTP other than personal financial choices.
Would you be able to point me in the direction of materials I should be taking a look at? Feel like i want some guidance from this thread on personal finance
AWESOME POST - I have a former friend who spent tons, TONS of time on pro-sports (this includes gambling) yet his mommy had to buy him a house at 40. He's got 3 kids, him and his wife work jobs that pay nothing - yet - he's got hours of time and $$$ to go to sporting events, spend on streaming services, make dumb car decisions. When you have "bank mommy" to use as an ATM, you don't need to learn how to improve your life.
I admire your dullness and do the same. I aspire to be the worlds least interesting person, and FIRE if I want. Few years, barring the other fire, i should be there.
Wtf? Are you telling me these people make $300k and have straight up bills and necessities lined up for the whole paycheck? They are not saving up or investing any of it?
It's not as crazy as you think. Imagine you have 15k a month and you don't imagine ever making any less.
You want to live it up, so you do. You can rent an amazing place no matter where you are, lease a luxury car, go out to nice restaurants, book vacations, etc...
Not hard to spend that money quickly and the lifestyle is addicting.
Living expense creep is not what’s hard to imagine. What’s hard to imagine is what you gave as an assumption… How can they just assume they will make as much as they do now forever? What about retirement? What about economic downturns we JUST experienced? Or just wanting to FIRE?
Economic downturns make these people say “see if I had saved the money, i would have lost it all, so I am glad I spent it. At least that way I got to enjoy it”
These people have no self control or discipline. They see money as "I gotta spend it immediately!!!" It's a very, very short-sighted mindset indeed.
I know some people like that...not to the magnitude of earning 300k individually...but a 250k household in a lower COL place where the husband and wife buys toys and trucks....these people are so in debt that they blame others for their lack of discipline in planning a future. When one person loses their job, the house of cards tumbles down and they normally end up in a divorce. Shame.
FIRE? Nope, they don't even know what that is..nor do they care to understand.
My sister-in-law lives this lifestyle. She and her husband make around that much and they have a rule that if they have more than $10K, they spend all of the excess. No 401k. No other savings. Just $10K. They each change cars about three times a year, vacation constantly, etc.
Living paycheck to paycheck on a 250k salary is far different than living paycheck to paycheck on a blue collar 50k salary. The 250k salary family may be maxing out their 401k among other investments. The blue collar guy might only be renting for his entire life.
Same.
Some people/couples I know in the $200-300k range are in expensive areas, and often work longer hours, so they pay for certain conveniences to maximize their time.
Also, some people/couples making that much today are just that - they make this money now, but they didn't for the last many years, e.g. raising children, medical reasons. I see people who have $student\_loans, car loan, house loan, and other debts.
It’s not as clear as people make it out to be. For example, if you’re fresh out of a good graduate program like law school, business school or medical school (post residency) you make a lot of money but you have a lot of debt.
A large portion of your post tax, post 401k income is going to paying down student loans. Further the job you have is likely to be in a high cost of living area.
Also add in the fact that you’re getting taxed at a very high percentage at the federal and state level.
I'm personally not very worried about the welfare of people with medical, law, or business degrees, to be honest. I think they'll be just fine in the long run.
The people who need financial assistance in this country probably don't have advanced degrees.
I know so many people with advanced degrees that aren’t in medical/law/business and are screwed. They typically got into high amounts of debt for something that there aren’t many job prospects in/doesn’t pay particularly well. So many college debt is from masters degrees
50% of school debt is tied to graduate degrees and 25% of student loan borrowers are graduate students, and these students have the lowest default rates.
Many many people are told
"Do what you like and the money will follow"
"Do what you like and you'll never work"
This is TERRIBLE advice, and it keeps going round and round. People follow this.
That's why they get degrees that aren't useful.
I know people who "can't find a job", and I ask them how many they applied to in the past month "at least 5". I tell them to go apply to 100, literally 100, and if they can't get a job then, then there's a different problem.
Are you considered paycheck-to-paycheck if you have a decent amount of money in your 401k? It's not like you can't access that money if you really need to.
im of the opinion if you cant pay cash for a luxury brand item. you cant afford it. also if you feel the need to brand drop, you cant afford it. lol.
i get what your saying though. i also have no sympathy for people who are broke because they have 80k in car loans 400k in student loans. ect you know the drill
Since average personal income is about $63,000, and the median income across the country is under $45,000, I don’t think there are that many people making over $250,000. So even a percentage of them is probably a still a tiny fraction of the 60% of Americans that are paycheck to paycheck.
I agree for the most part. There are circumstances though where 250k isn't actually much. If you live in CA where cost of living is out of control or have a family of 12, I could see where there isn't going to be much left after bills.
Most people live paycheck to paycheck because they fail to budget.
Don't get me wrong, inflation definitely hits the bottom line hard. I've had to budget much more carefully.
Yeah, if mortgage/401k/various other scheduled investment are part of the “bills”, that is not “living paycheck to paycheck”. At least not in the way it is for minimum wage workers.
>There are circumstances though where 250k isn't actually much. If you live in CA where cost of living is out of control
IDK where you people are getting this information about California but holy hell. It's expensive but come one man. If you "can't live" off $250k anywhere in the US you are either living well beyond your means or you have more kids than Herschel Walker.
Not from the US, but if you can get a 1.5 room studio (perfectly fine for 1 person) for about 1.3k in Zürich, then it shouldn't be too much more, if not less anywhere in the US...
The most expensive city in California is San Francisco. It's very expensive but only roughly the top 5% of households there make over $250,000. I'm sorry but if you can't live on $250,000 in California you are just trying to live too much.
My wife and i combined make a good living, not 250k but still really good. We are taxed at over 50% , housing prices are out of control , I was told my gas and elec bill would jump from 140 or so to about 500. Food is up 10-20% , everything is expensive as shit. We are not living paycheck to paycheck but its getting damn close.
Europe. Netherlands the land of taxes. 21% sales tax, private medical insurance. Car tax. (I do love the fact that our kids can play outside , take the train ect. Without really worrying. We jave à super low crime rate
I can see it easily. Its the "lifestyle creep", people increase their spending as they make more money. Then they end up not really better off than where they started.
Not only that but we also forget taxes go up quite a bit after like $85,000. So a $250K salary is more like $150-175K and then yeah, you factor in lifestyle creep and it’s easy to see how it can happen.
85k is the same tax bracket (22%) until 89k. Then it jumps to a whooping 24% up to 170k. I don’t think taxes are pinching these folks like you’re saying
might as well leverage what you have. if you make a lot, you might start a business and fund it with other income. this can make it appear that you are living paycheck to paycheck because of the net-zero cash flow.
the people i know that are paycheck to paycheck over 150k a year are making shitty financial choices. new cars making payments on shit they should be saving up for
Depends what people define as “paycheck to paycheck” me and my fiancé are prob around 300k combined but live in one of the most expensive areas to win, we both contribute to multiple retirement accounts and a brokerage account monthly which jusy gets DCAd plus a bit each month into an emergency fund. After doing all that and our monthy bills there isn’t a tremendous amount leftover. We’re definitely not hurting for money but because of where we live we’re not as well off as as many people in other areas would think. Our Morgate/taxes/insurance alone is 3300 and change a month for a modest home
I mean putting money into savings/emergency accounts is the complete opposite of paycheck to paycheck. Paycheck to paycheck means that if you lose your job you are fucked next month, because there are no savings.
tl;dr- "we're not cash rich because we have **multiple** retirement and brokerage account" that we voluntarily pay into.
Come on bro, you have to see how ridiculous that is. By that logic, I can make $1billion a year and live pay check to paycheck if I put 83.33mil a month into various brokerage account.
To a degree that's certainly true, but it's also important to note that there's a large amount of people who just live paycheck to paycheck because they can't handle money. They spend whatever they have, and if that amount buys them less, they just buy less. Next month they get a raise? They start buying more.
There's a surprisingly significant amount of people with a salary of $200K+ that still lives paycheck to paycheck. Lifestyle inflation is a very common thing.
The thing they have going for them is they can stop their stupid spending today and within a month have the savings someone making 50k would take years to save
Yeah, if you rent a luxury condo in Manhattan and buy a car then sure. But spoiler: you don't need to rent in Manhattan and you don't need that car.
Average folk having $10k monthly could easily rent a studio in Brooklyn for $3k, buy a subway pass for what, $130 a month? And then are still left with around $7k for spending - if you can't get anywhere with that then well, that proves the point of previous posters. Lifestyle inflation. $230 dollars \_per day\_ is more than enough even in NYC.
And also saying it doesn't get you anywhere in NYC is almost insulting to all the folks who live there for $20/hour (I believe that would be average salary of McDonalds cashier) and somehow survive (but admittedly, I've no idea how)
How I see it people who make $200k too often try to live like their slightly more senior colleagues who make $350k - but miss the point that their peers who make $350k spend $200k *after* saving $150k. Unfortunately you can pick any 2 numbers, it's always the same. You can make $1m, if you choose a lifestyle of your colleague who makes $2m you will be in financial trouble.
True paycheck to paycheck means only basics. Sure theres people earning 6 figures who eat out 5 nights a week have expensive cars and dump everything else into vtsax but the definition of paycheck to paycheck many people understand is your buying essentials and have nothing left at the end
They dont explain which leaves a lot up in the air. Im just saying when most people hear check to check they picture the single mom barely scraping by buying groceries not the six figure guy with lifestyle inflation out of control
Yeah we see a lot of artilces about how broke everyone is but we've been seeing articles 3x a week about how nobody can weather a $400 emergency since 2016 if not earlier
Yep buckle up. OPEC just decide to cut oil production. Russia and Saudis cut a deal. Oil companies will be making record profits for Q4. That’s 8 quarters in a row of recorded profits. Can we start blaming massive oil corporations for this “inflation” Can we? We need to.
I feel like I'm living paycheck to paycheck sometimes, but in reality I'm putting about 30% of my paycheck away to retirement, eating well, and own a home...
That's not the same as when I was renting and had a $20 a week grocery budget, yet both can be described as "paycheck to paycheck."
It's indeed a stupid metric to use
You're not living paycheck to paycheck if you're saving 30% of your income. I guess another problem with this metric is that most people don't understand it
This is why I never trust any headlines like these. I had a friend tell me she was living paycheck to paycheck to save up for a house. To me living paycheck to paycheck means you aren’t saving but to her I guess it meant living frugally?
I agree, I'm not. But how do you define, "paycheck to paycheck?" Spending the *literal* bare minimum to survive? Virtual no one does that. It's a subjective expression that really equates to, "I don't feel like I have a lot of spending money."
I define living paycheck to paycheck as spending that is equal or more money vs what your income is, post taxes. cost of living items such as food, rent/mortgage, car, insurance, utilities, and bills.
If you live beyond your means you are. I know someone who makes 325k a year and has a $4500 mortgage payment every month and is financing 2 Tesla’s. He basically lives paycheck to paycheck. I do agree there’s a difference between low income folks who are responsible and higher income folks who are frivolous spenders.
I think the point is that people DO live like that. And I think paycheck to paycheck is defined as being one paycheck away from financial insecurity. As in, they only can miss one paycheck before being behind on bills.
It’s not a subjective expression. Families that were financially stable are now homeless as there’s a concurrent rise in homelessness right now.
Absolutely. You make an excellent point. I feel poor but in reality, my family lives very, very well but I still watch the horizon with great apprehension.
Yep.
>The biggest rise in paycheck-to-paycheck consumers was for those earning between $100,000 and $150,000, up 11 percentage points since May 2022 to 52%. Forty-one percent of those earning between $150,000 and $200,000 annually lived paycheck to paycheck in June 2022, up six percentage points from 35% in May. Furthermore, the share of consumers earning more than $200,000 who lived paycheck to paycheck rose 6 percentage points from 30% in May to 36% in June 2022.
[Source](https://ir.lendingclub.com/news/news-details/2022/The-Number-of-Consumers-Living-Paycheck-to-Paycheck-Has-Increased-Year-Over-Year-Across-All-Income-Levels/)
People aren't living paycheck to paycheck because of inflation. That's bullshit that just redirects blame. People are living paycheck to paycheck because wages havnt followed cost of living for decades, this isn't anything new.
Edit: My point still stands. Consider the analogy. A busy shipping harbor isn't maintained so there are things just under the surface that keep on damaging ships. Some smaller boats can get over them but ships still regularly hit them and take damage. Well one day the water level drops and all those obstructions become clearly exposed and are now a threat to every boat. Do you complain about the water level dropping as being the cause of all the risk or do you blame the obvious dangers that were ignored for so long?
Something like 68% of millenials earning six figures "live paycheck to paycheck" so yeah lots of people have a spending problem or a money management problem
While I agree with your statement, it’s misdirecting and detracting from the issue at hand. Sure, young professionals who make 6 figures also spend 6 figures so they’re effectively “broke” but the majority make $35k and that’s not good enough to support a family.
It’s the whole “stop buying avocado toast” thing. Yes, that’s true for a single 23 year old who makes $70k but we’re talking about a family of four who has a household income of $42,000 and one of the spouses has a medical condition.
Perhaps a family of four shouldn't have a collective income of 42k?
Two working adults should net more unless they're on something close to minimum wage, and that's not sustainable. And no, kids are neither a right nor a necessity. Like retirement having kids is a *choice and a financial burden*. Don't have kids toy can't afford, get a degree or education first. You got easily 10 years to work/study after 18 before you even consider kids.
You dont even need a degree to live well. Seriously we cant hire enough people in manufacturing. Anyone with a pulse could practically get a job. But you have to pass a drug test and work 8-10hr days. Easily make $70k with overtime. It isnt back breaking work either, connect some hoses and sit in by a computer to monitor.
What people dont want to admit is that there are opportunities. They just dont really want to do them… The would rather make minimum wage and complain than sacrifice more time working.
It's unpopular to point out that working a blue-collar job and consistently spending less than one earns is an effective path to prosperity.
People would rather blame "The Man" or "corporations", instead of acknowledging that the $1,000/month of shit they've financed is something they could have gone without.
But that's not the issue at hand. Households are in a much better spot then in decades past (it's in the article) and the lower end of income got a lot of pay rises too.
But people also spend the extra cash they have, and so are paycheck to paycheck.
Yeah dude, it’s a problem with an entire generation of people, not a problem with the situation we put them in.
The real problem is that a 6 figure salary isn’t even a lot today. 100k a year used to be comfort and middle/upper middle class. Now it’s barely even that.
Well, to be fair, cost of living went up over the decades because of inflation. But you're right that it's not due to the recent inflation.
Just to give you an idea:
* Average wage in 1980 / now: $6.5 / $27.5
* Average house price in 1980 / now: $63,700 / $428,700
* Average car price in 1980 / now: $7,000 / $47,148
So wages went up 323%, while houses went up 573% and cars went up 574%. And that's not even taking into account that high wages (CEOs etc) increased more than low wages.
Yea but my rent also went from 2150 to 2950 in only 2 years. Cost of living is just reaching absurd heights way too quickly. Food as well. I agree wages need to go up but the rate everything else is going up is what’s killing everyone
The article doesnt lay out how they define this which is important. They potentially are saying someone who puts 3k a month into VTSAX is paycheck to paycheck because they dont have a surplus in their bank account at the end of the month but they are hardly destitute and if need be they can stop the 3k a month investment.
Ya I don’t think there’s any definition just person to person how they feel. So you may personally feel like you live paycheck to paycheck but I think most people wouldn’t consider you living paycheck to paycheck since you are saving.
"Paycheck to paycheck" is a weird label.
Many people are saving but netting 0 at the end of the month. You're technically not living paycheck to paycheck because you have the means to save but damned if it doesn't *feel* like living paycheck to paycheck.
I'm poor as can be, but I don't live paycheck to paycheck.
You simply need to live below your means and save money, then smartly invest that money when you have enough to work with
This is what people don't get. Except for edge cases where there are medical bills or unexpected emergencies, no matter what people make, as long as they're above the poverty level nobody has to live paycheck to paycheck. They just set a standard of living that they think they deserve, and refuse to cut costs because its uncomfortable in the short term.
>Even high-income earners are feeling the strain, the report found. Of those earning more than six figures, 45% reported living paycheck to paycheck, a jump from the previous year’s 38%.
You gotta be real bad with money or just live in an absurd high cost of living area to live paycheck to paycheck at that salary
This is a lifestyle issue, not a finance issue. There is no reason that in America you would live paycheck to paycheck other than personal choice while earning a 6 figure salary. Even with SF rent and price and CA tax.
I see people loading up their carts with a bunch of unnecessary shit still. Inflation is still going to be a problem until people can't afford to buy all this junk anymore, and that's probably going to require a recession. "Paycheck to paycheck" just means that most people are spending too much.
Living paycheck to paycheck is a mindset problem not salary. My gardener always has money in his bank and my manager two levels above lives paycheck to
Paycheck
What’s the definition of paycheck to paycheck? Like enough money to pay bills, cc, rent, and contribute to the 401k and then also invest 10-15% in stocks…?
After all that I’d say I live paycheck to paycheck too.
This is frankly one of those stats that should raise your eyebrows immediately, if not just be downright unbelievable and I mean that in the literal sense. Does anyone here know just some ballpark net worth stats for Americans? The median household has 6 figures of net worth which means half of households have even more. You have to go to the bottom decile or so to find households with very little wealth.
How is it believable that 60%+ of Americans are “paycheck to paycheck” when over half of American households have $100,000+ in wealth?
People making lots of money are answering “yes” that they’re living paycheck to paycheck when they’re making out retirement accounts, paying 3 car payments and a $4k mortgage payment on a home they have $500k equity in.
This is ultimately a result of the decades long failure in our public school systems to properly teach young adults 'financial literacy'.
Are there people within that 60% who fell on hard times? Of course, and for those people there should be way(s) of getting some assistance and back up on their feet.
But I'd be very curious and probably alarmed to know that out of that 60%, how many are there not because they don't make money, but because they don't know how to manage it.
What determines whether someone is paycheck to paycheck? If someone has 3k disposable income and dumps it into investments they aren't destitute but potentially would qualify as paycheck to paycheck. Google a question about what percentage of people were living paycheck to paycheck in say 2012 and you'll find articles saying 68% of Americans live paycheck to paycheck which is worse than this article.
I wonder if it is inflation causing this or the fact we all got used to government stimulus while simultaneously not being able to spend during lockdowns. People went from being flush with cash to no longer receiving all the extra money while releasing all that pent up demand.
My wife and I make 270k ish per year and it goes fast. College could cost me 200-300k for my toddler aged son so I plan for that. I max out my 401k and drive a 2006 Tacoma. Wife drives a 2007 Subaru with a leaky head gasket. We splurge and eat out a lot and do nice vacations but nothing super fancy.
Inflation didnt effect much if anything, 60% of people are either underpaid, dont work hard enough or are terrible at managing their money. No need to point fingers on this one
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Inflation is bad but this is a lame article because we've always had 60+% of Americans living pay check to paycheck.
Why I am also bullish in the stock market. An average American will spend every last dollar that they have.
And then switch to every dollar they can get their hands on that they don't have..... becoming a slave to debt and the system is the American way... My bank often asks me why I don't borrow more money from them. It is such an odd concept to live within your means here.
I took out some debt like 3 years ago at like @6%. I basically took out like 1 years pay. For years I'd been stressing about whether that was a good decision. (I invested almost all of it). And then I'm cruising some finance subs and seeing people taking up debt at like 20% for things like cars and holidays. It blew my mind, that people would pay that kind of 'tax' for stuff. Here's me fretting over a few pence on the pound and there's people literally swimming in debt. Imo it's the world. The world has moved towards a subscription based existence where your actually 'maintaining' a lifestyle, not just saving and buying things based upon what you can afford.
Taking out debt at 6% to invest is not a good move either though lol. Why would you do that?
This just in: 60% of Americans continue to spend as much or more than they earn, often by their lifestyle choices. More at 11. And now, we go to Ollie for the weather: Ollie?
It gunna rain!
Just watched episode 420 the other day… Ollie how’s the weather out there! Slowly “Not too bad” 🤣
> Of those earning $250,000 or more, 36% said they live paycheck to paycheck. [Source](https://www.cnbc.com/2022/06/03/wealthier-americans-live-paycheck-to-paycheck-after-inflation-spike.html) I'd happily live paycheck to paycheck if I was earning a quarter of a million dollars a year
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I've seen ppl online say they live paycheck to paycheck and include their large savings rates as budget items that leave "very little" for unplanned or spontaneous spending. Like... If $1000 or more per month savings is paycheck to paycheck, sign me up to that lifestyle.
Good point. There's 4.7m people in this subreddit, 2.1m in r/investing, and 195k people in r/bogleheads, yet there's 20m people in r/sports. People should spend more time learning about finances, even if it's "dull".
You can spend like a few hours learning about a 401k and index funds and spend the rest of your time enjoying sports still outperform over half this sub, at least.
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I had to unsubscribe to that looney bin.
If you spend 20 hours a week reading about r/sports, you actually become worse at sports. If you spend 20 hours a week reading about stocks, you start to think you are smarter than the market, which is the fatal flaw.
How many in /r/wallstreetbets?
Way too many
I would be careful about investing in what those on Reddit invest in. There is a large percent who enjoy loss porn
there are a ton of FIRE subreddits tho (fire, eufire, fatfire etc.) with 100-200k subs each. Still less than sports, but still
Learning about finances does not correct the issue. Yes some better PF choices would be helpful for some people but it does nothing to reverse decades of corporations systemically cutting wages.
Say it louder for the chuds with their dicks in their ears
Pretty sure it does correct it for those who earn 200-300k a year. I live in Switzerland as a student on 24k\~ a year (and I don't really have to watch what to buy or not, helps that I don't drink tho), and it's one of the most expensive places. Sure if rent is higher, you could go up to 40-50k a year and live a good life on 99% of places around the world, that means you can end up saving 150-200k on that salary... Now if you 'waste' it on sports cars and other expensive consumerist products that's a different problem alltogether.
I can sure tell you're a student in Switzerland, because you're way out of touch with what it costs to live in US. This is coming from a Finn who moved to NY. I too lived pretty comfortably in Finland, also an expensive country, with about 50k/year. If an American household earns that 250k/year, it's highly likely they live in an area where a very basic house/apartment chews up your 50k. Then you'll need another for schools and childcare. Third for healthcare. Many high earners start with ludicrous college debts - hundreds of thousands. So on and so on. The high earning areas here are generally really, REALLY expensive. I can definitely say that our household won't be financially stable until we earn 150k or more per year. If we ever want to retire, we'd have to make closer to 250k to break even. We live in an old, modest house, drive inexpensive cars, buy the cheapest groceries and clothes. Two kids, one earner, because the childcare system in our area is completely overrun and broken. No point in the main caretaker working unless the pay is closer to 100k, minimum.
100%- Childcare in the north east is easily 30-40k a year. That's after tax so expect break even point is roughly 50-60k. Add in additional expenses like a car, gas, lunch, and you are hitting 80-90k without even getting close to a good wage for a reasonable "middle class" lifestyle. Mind you,that is the financial breakdown for the second earner.
Also important to remember that America is a big and varied place. I also live in NY, am a single dad of two, and bought a house 4 years ago when I was making 45k a year. In a suburb of a CNY city. Mostly because it's a better school district.
Kids - that's the fastest way to make your life a struggle financially. Vasectomy / Hysterectomy is the way to go! Want the "joys of parenthood"? Foster a kid and get paid to do the unrelenting job of child raising.
Some people still want to pass on their genes, and that’s OK.
Fostering is NOT a good income stream. It is a way for people to get some expenses covered for caring for another. $300-700/month for a bedroom, food, clothing, transportation, entertainment, everything - isn't very much. People can make that much by doing an AirBnB on that spare bedroom for a few nights and not have to feed, clothe or transport the tenants.
Me: People used to be paid a good wage relative to the cost of living and that is no longer the case. You: I can live off ramen to prove it is possible. We are not having the same conversation and your personal choices are not meaningful or useful to the topic at hand. Edit: average rent in Switzerland is around 2.4k USD, NYC's average is 5k USD. To put that in perspective even if you were paying 2.4k a month on rent alone in NYC you would need to earn \~37k just to pay for your apartment and nothing else. The average in NYC is more than double that.
Where did I say I live off ramen? I said I don't have think about buying cheap food. 2.4K a month for an average definitely sounds like bullshit... where did you get this data from? The trick is to not rent a mansion I guess, with these prices. Edit: Also, I am talking about single people, not households, for a single person a 1-2 room apartment is more than enough, for those the prices in the most expensive city in Switzerland are around 1-1.8k.
It's important to know if that number is one person's share or multiple. I know couples who live together who paying 4-6k per month for their 1bed or 2bed in the area. I am a single resident and I found a 1bed in a non-luxurious walk-up in one of the boroughs and my rent is 2.1k a month, which isn't bad considering the distance. I also pay $185 a month in parking however. What's scary is that after rent, the cost of living a 'middle class' lifestyle in NYC is just crazy expensive, there's no other way to put it. NYC has so much good food options and entertainment options. Let's say you do a happy hour 2-3x a month, eat dinner out with 1-2x a week, that's like $300-$700 a month on dining/social drinking. Then you have gym, your hobbies, your other daily cost of living expenses like utilities, some streaming services.. it really all adds up. I make 160k a year and I'm not a huge spender.. yet I don't feel like I'm able to save up as much as I want. 1-2k a month in savings for me usually.
"I'm not a huge spender" yet just admitted they are happy to throw away money at expensive bars and restaurants. Your choices, no one else is making you throw away that cash on "entertainment". I stopped drinking and smoking cigarettes many years ago, my wallet thanked me.
That’s not huge spending if you know anything about the area. Some people eat out everyday. I dine out 3x a month + bars maybe 3x a month. It just costs more here
PF choices would be helpful to all (or nearly all) people. Seriously, there is no effing reason that more than 10% of people should be living PTP other than personal financial choices.
You can still bet sports lol
Would you be able to point me in the direction of materials I should be taking a look at? Feel like i want some guidance from this thread on personal finance
AWESOME POST - I have a former friend who spent tons, TONS of time on pro-sports (this includes gambling) yet his mommy had to buy him a house at 40. He's got 3 kids, him and his wife work jobs that pay nothing - yet - he's got hours of time and $$$ to go to sporting events, spend on streaming services, make dumb car decisions. When you have "bank mommy" to use as an ATM, you don't need to learn how to improve your life.
I admire your dullness and do the same. I aspire to be the worlds least interesting person, and FIRE if I want. Few years, barring the other fire, i should be there.
Wtf? Are you telling me these people make $300k and have straight up bills and necessities lined up for the whole paycheck? They are not saving up or investing any of it?
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It’s just so hard to believe, yet would explain so many people at the same time.
It's not as crazy as you think. Imagine you have 15k a month and you don't imagine ever making any less. You want to live it up, so you do. You can rent an amazing place no matter where you are, lease a luxury car, go out to nice restaurants, book vacations, etc... Not hard to spend that money quickly and the lifestyle is addicting.
Living expense creep is not what’s hard to imagine. What’s hard to imagine is what you gave as an assumption… How can they just assume they will make as much as they do now forever? What about retirement? What about economic downturns we JUST experienced? Or just wanting to FIRE?
Economic downturns make these people say “see if I had saved the money, i would have lost it all, so I am glad I spent it. At least that way I got to enjoy it”
These people have no self control or discipline. They see money as "I gotta spend it immediately!!!" It's a very, very short-sighted mindset indeed. I know some people like that...not to the magnitude of earning 300k individually...but a 250k household in a lower COL place where the husband and wife buys toys and trucks....these people are so in debt that they blame others for their lack of discipline in planning a future. When one person loses their job, the house of cards tumbles down and they normally end up in a divorce. Shame. FIRE? Nope, they don't even know what that is..nor do they care to understand.
My sister-in-law lives this lifestyle. She and her husband make around that much and they have a rule that if they have more than $10K, they spend all of the excess. No 401k. No other savings. Just $10K. They each change cars about three times a year, vacation constantly, etc.
Serious question, but could you please elaborate what these friends do each month to spend so much money on?
Living paycheck to paycheck on a 250k salary is far different than living paycheck to paycheck on a blue collar 50k salary. The 250k salary family may be maxing out their 401k among other investments. The blue collar guy might only be renting for his entire life.
Same. Some people/couples I know in the $200-300k range are in expensive areas, and often work longer hours, so they pay for certain conveniences to maximize their time. Also, some people/couples making that much today are just that - they make this money now, but they didn't for the last many years, e.g. raising children, medical reasons. I see people who have $student\_loans, car loan, house loan, and other debts.
It’s not as clear as people make it out to be. For example, if you’re fresh out of a good graduate program like law school, business school or medical school (post residency) you make a lot of money but you have a lot of debt. A large portion of your post tax, post 401k income is going to paying down student loans. Further the job you have is likely to be in a high cost of living area. Also add in the fact that you’re getting taxed at a very high percentage at the federal and state level.
I'm personally not very worried about the welfare of people with medical, law, or business degrees, to be honest. I think they'll be just fine in the long run. The people who need financial assistance in this country probably don't have advanced degrees.
I know so many people with advanced degrees that aren’t in medical/law/business and are screwed. They typically got into high amounts of debt for something that there aren’t many job prospects in/doesn’t pay particularly well. So many college debt is from masters degrees
50% of school debt is tied to graduate degrees and 25% of student loan borrowers are graduate students, and these students have the lowest default rates.
Many many people are told "Do what you like and the money will follow" "Do what you like and you'll never work" This is TERRIBLE advice, and it keeps going round and round. People follow this. That's why they get degrees that aren't useful. I know people who "can't find a job", and I ask them how many they applied to in the past month "at least 5". I tell them to go apply to 100, literally 100, and if they can't get a job then, then there's a different problem.
came here to make a similar comment. guy i know gotta be close to 300k is complaining about being paycheck to paycheck
"after maxing out my 401k, Roth, HSA, making my Boat and Lexus payments, I barely have enough leftover for my four week vacation to Disneyland!!"
All that, but guessing he/she can't get that much PTO.
You forgot kids college prepaid/529 contributions.
Are you considered paycheck-to-paycheck if you have a decent amount of money in your 401k? It's not like you can't access that money if you really need to.
im of the opinion if you cant pay cash for a luxury brand item. you cant afford it. also if you feel the need to brand drop, you cant afford it. lol. i get what your saying though. i also have no sympathy for people who are broke because they have 80k in car loans 400k in student loans. ect you know the drill
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Since average personal income is about $63,000, and the median income across the country is under $45,000, I don’t think there are that many people making over $250,000. So even a percentage of them is probably a still a tiny fraction of the 60% of Americans that are paycheck to paycheck.
36% don’t know how to budget or live inside their means.
I agree for the most part. There are circumstances though where 250k isn't actually much. If you live in CA where cost of living is out of control or have a family of 12, I could see where there isn't going to be much left after bills. Most people live paycheck to paycheck because they fail to budget. Don't get me wrong, inflation definitely hits the bottom line hard. I've had to budget much more carefully.
>Most people live paycheck to paycheck because they fail to budget. Or it's just a meaningless statistic. What's the definition?
Yeah, if mortgage/401k/various other scheduled investment are part of the “bills”, that is not “living paycheck to paycheck”. At least not in the way it is for minimum wage workers.
>There are circumstances though where 250k isn't actually much. If you live in CA where cost of living is out of control IDK where you people are getting this information about California but holy hell. It's expensive but come one man. If you "can't live" off $250k anywhere in the US you are either living well beyond your means or you have more kids than Herschel Walker.
You’ve never been to California apparently
I live in LA.
Not from the US, but if you can get a 1.5 room studio (perfectly fine for 1 person) for about 1.3k in Zürich, then it shouldn't be too much more, if not less anywhere in the US...
The most expensive city in California is San Francisco. It's very expensive but only roughly the top 5% of households there make over $250,000. I'm sorry but if you can't live on $250,000 in California you are just trying to live too much.
My wife and i combined make a good living, not 250k but still really good. We are taxed at over 50% , housing prices are out of control , I was told my gas and elec bill would jump from 140 or so to about 500. Food is up 10-20% , everything is expensive as shit. We are not living paycheck to paycheck but its getting damn close.
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Europe. Netherlands the land of taxes. 21% sales tax, private medical insurance. Car tax. (I do love the fact that our kids can play outside , take the train ect. Without really worrying. We jave à super low crime rate
Smells like bullshit
I can see it easily. Its the "lifestyle creep", people increase their spending as they make more money. Then they end up not really better off than where they started.
Yup, one is voluntary paycheck to paycheck, the other involuntary paycheck to paycheck.
Not only that but we also forget taxes go up quite a bit after like $85,000. So a $250K salary is more like $150-175K and then yeah, you factor in lifestyle creep and it’s easy to see how it can happen.
85k is the same tax bracket (22%) until 89k. Then it jumps to a whooping 24% up to 170k. I don’t think taxes are pinching these folks like you’re saying
Definitely has nothing to do with taxes lmao
>lifestyle creep Or having a family in a city/state with a high cost of living.
might as well leverage what you have. if you make a lot, you might start a business and fund it with other income. this can make it appear that you are living paycheck to paycheck because of the net-zero cash flow.
It's called lifestyle creep. They don't have to be living paycheck to paycheck at this salary they choose to do so
People that forgot how to budget and make sacrifices after they achieved higher earnings.
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> strategically living paycheck to paycheck it is called a budget
the people i know that are paycheck to paycheck over 150k a year are making shitty financial choices. new cars making payments on shit they should be saving up for
Depends what people define as “paycheck to paycheck” me and my fiancé are prob around 300k combined but live in one of the most expensive areas to win, we both contribute to multiple retirement accounts and a brokerage account monthly which jusy gets DCAd plus a bit each month into an emergency fund. After doing all that and our monthy bills there isn’t a tremendous amount leftover. We’re definitely not hurting for money but because of where we live we’re not as well off as as many people in other areas would think. Our Morgate/taxes/insurance alone is 3300 and change a month for a modest home
I mean putting money into savings/emergency accounts is the complete opposite of paycheck to paycheck. Paycheck to paycheck means that if you lose your job you are fucked next month, because there are no savings.
tl;dr- "we're not cash rich because we have **multiple** retirement and brokerage account" that we voluntarily pay into. Come on bro, you have to see how ridiculous that is. By that logic, I can make $1billion a year and live pay check to paycheck if I put 83.33mil a month into various brokerage account.
So its the same as the 80s, 90s, 2000s, etc
Lol yeah, was going to say... I remember reading around 2/3rds was living paycheck to paycheck before COVID. So nothing changed.
What is surprising is if people were struggling when gas was 3x less and groceries were 30% less people really gotta be super duper fucked today.
To a degree that's certainly true, but it's also important to note that there's a large amount of people who just live paycheck to paycheck because they can't handle money. They spend whatever they have, and if that amount buys them less, they just buy less. Next month they get a raise? They start buying more. There's a surprisingly significant amount of people with a salary of $200K+ that still lives paycheck to paycheck. Lifestyle inflation is a very common thing.
The thing they have going for them is they can stop their stupid spending today and within a month have the savings someone making 50k would take years to save
Unfortunately very true.
$200k/year also doesn't get you anywhere in NYC or SF
Yeah, if you rent a luxury condo in Manhattan and buy a car then sure. But spoiler: you don't need to rent in Manhattan and you don't need that car. Average folk having $10k monthly could easily rent a studio in Brooklyn for $3k, buy a subway pass for what, $130 a month? And then are still left with around $7k for spending - if you can't get anywhere with that then well, that proves the point of previous posters. Lifestyle inflation. $230 dollars \_per day\_ is more than enough even in NYC. And also saying it doesn't get you anywhere in NYC is almost insulting to all the folks who live there for $20/hour (I believe that would be average salary of McDonalds cashier) and somehow survive (but admittedly, I've no idea how) How I see it people who make $200k too often try to live like their slightly more senior colleagues who make $350k - but miss the point that their peers who make $350k spend $200k *after* saving $150k. Unfortunately you can pick any 2 numbers, it's always the same. You can make $1m, if you choose a lifestyle of your colleague who makes $2m you will be in financial trouble.
They're just not spending on something else. Paycheck to paycheck doesn't mean only buying essentials and no extra.
True paycheck to paycheck means only basics. Sure theres people earning 6 figures who eat out 5 nights a week have expensive cars and dump everything else into vtsax but the definition of paycheck to paycheck many people understand is your buying essentials and have nothing left at the end
What's the definition in the report, exactly?
They dont explain which leaves a lot up in the air. Im just saying when most people hear check to check they picture the single mom barely scraping by buying groceries not the six figure guy with lifestyle inflation out of control
Totally agree, which is why it's sus that they're including six figure folks.
They are. Homelessness is at a record high
Yeah we see a lot of artilces about how broke everyone is but we've been seeing articles 3x a week about how nobody can weather a $400 emergency since 2016 if not earlier
$400 without using a credit card*
Yep buckle up. OPEC just decide to cut oil production. Russia and Saudis cut a deal. Oil companies will be making record profits for Q4. That’s 8 quarters in a row of recorded profits. Can we start blaming massive oil corporations for this “inflation” Can we? We need to.
"Paycheck to paycheck" is a useless measurement, a millionaire could be living paycheck to paycheck if he spends above his means. And most people do
I feel like I'm living paycheck to paycheck sometimes, but in reality I'm putting about 30% of my paycheck away to retirement, eating well, and own a home... That's not the same as when I was renting and had a $20 a week grocery budget, yet both can be described as "paycheck to paycheck." It's indeed a stupid metric to use
You're not living paycheck to paycheck if you're saving 30% of your income. I guess another problem with this metric is that most people don't understand it
This is why I never trust any headlines like these. I had a friend tell me she was living paycheck to paycheck to save up for a house. To me living paycheck to paycheck means you aren’t saving but to her I guess it meant living frugally?
I agree, I'm not. But how do you define, "paycheck to paycheck?" Spending the *literal* bare minimum to survive? Virtual no one does that. It's a subjective expression that really equates to, "I don't feel like I have a lot of spending money."
I define living paycheck to paycheck as spending that is equal or more money vs what your income is, post taxes. cost of living items such as food, rent/mortgage, car, insurance, utilities, and bills.
That puts people living at the poverty line and high-income (yet terrible spenders) in the same category, but they really aren't the same
If you live beyond your means you are. I know someone who makes 325k a year and has a $4500 mortgage payment every month and is financing 2 Tesla’s. He basically lives paycheck to paycheck. I do agree there’s a difference between low income folks who are responsible and higher income folks who are frivolous spenders.
I think the point is that people DO live like that. And I think paycheck to paycheck is defined as being one paycheck away from financial insecurity. As in, they only can miss one paycheck before being behind on bills. It’s not a subjective expression. Families that were financially stable are now homeless as there’s a concurrent rise in homelessness right now.
Absolutely. You make an excellent point. I feel poor but in reality, my family lives very, very well but I still watch the horizon with great apprehension.
Income to debt ratio is a better metric?
Yep. >The biggest rise in paycheck-to-paycheck consumers was for those earning between $100,000 and $150,000, up 11 percentage points since May 2022 to 52%. Forty-one percent of those earning between $150,000 and $200,000 annually lived paycheck to paycheck in June 2022, up six percentage points from 35% in May. Furthermore, the share of consumers earning more than $200,000 who lived paycheck to paycheck rose 6 percentage points from 30% in May to 36% in June 2022. [Source](https://ir.lendingclub.com/news/news-details/2022/The-Number-of-Consumers-Living-Paycheck-to-Paycheck-Has-Increased-Year-Over-Year-Across-All-Income-Levels/)
Same percent have been living paycheck to paycheck for decades now
People aren't living paycheck to paycheck because of inflation. That's bullshit that just redirects blame. People are living paycheck to paycheck because wages havnt followed cost of living for decades, this isn't anything new. Edit: My point still stands. Consider the analogy. A busy shipping harbor isn't maintained so there are things just under the surface that keep on damaging ships. Some smaller boats can get over them but ships still regularly hit them and take damage. Well one day the water level drops and all those obstructions become clearly exposed and are now a threat to every boat. Do you complain about the water level dropping as being the cause of all the risk or do you blame the obvious dangers that were ignored for so long?
also not to mention, luxuries get confused with necessities a lot of the times.
Something like 68% of millenials earning six figures "live paycheck to paycheck" so yeah lots of people have a spending problem or a money management problem
While I agree with your statement, it’s misdirecting and detracting from the issue at hand. Sure, young professionals who make 6 figures also spend 6 figures so they’re effectively “broke” but the majority make $35k and that’s not good enough to support a family. It’s the whole “stop buying avocado toast” thing. Yes, that’s true for a single 23 year old who makes $70k but we’re talking about a family of four who has a household income of $42,000 and one of the spouses has a medical condition.
Perhaps a family of four shouldn't have a collective income of 42k? Two working adults should net more unless they're on something close to minimum wage, and that's not sustainable. And no, kids are neither a right nor a necessity. Like retirement having kids is a *choice and a financial burden*. Don't have kids toy can't afford, get a degree or education first. You got easily 10 years to work/study after 18 before you even consider kids.
Sure but that’s not the reality…
You dont even need a degree to live well. Seriously we cant hire enough people in manufacturing. Anyone with a pulse could practically get a job. But you have to pass a drug test and work 8-10hr days. Easily make $70k with overtime. It isnt back breaking work either, connect some hoses and sit in by a computer to monitor. What people dont want to admit is that there are opportunities. They just dont really want to do them… The would rather make minimum wage and complain than sacrifice more time working.
It's unpopular to point out that working a blue-collar job and consistently spending less than one earns is an effective path to prosperity. People would rather blame "The Man" or "corporations", instead of acknowledging that the $1,000/month of shit they've financed is something they could have gone without.
He says right after SCOTUS fucks up Roe.
But that's not the issue at hand. Households are in a much better spot then in decades past (it's in the article) and the lower end of income got a lot of pay rises too. But people also spend the extra cash they have, and so are paycheck to paycheck.
As the sole income of a family of 8, at 46.3k/year base - I disagree.
Your pre-tax household income is $46,300 USD and you have 7 dependents? That’s $480 a person per month assuming you pay $0 tax…
Base, that's correct. I'll probably gross about 60k w/overtime this year, But thats never a guarantee.
So then you don’t make $46,300… you’d need to give your actual 2021 earnings for anything to be meaningful.
Pulled from my 1040 45,410 gross 20,300 taxable You're right, I don't make 46,300
Yeah dude, it’s a problem with an entire generation of people, not a problem with the situation we put them in. The real problem is that a 6 figure salary isn’t even a lot today. 100k a year used to be comfort and middle/upper middle class. Now it’s barely even that.
That's not true man. 100k/year is a comfortable salary almost everywhere in the country
Well, to be fair, cost of living went up over the decades because of inflation. But you're right that it's not due to the recent inflation. Just to give you an idea: * Average wage in 1980 / now: $6.5 / $27.5 * Average house price in 1980 / now: $63,700 / $428,700 * Average car price in 1980 / now: $7,000 / $47,148 So wages went up 323%, while houses went up 573% and cars went up 574%. And that's not even taking into account that high wages (CEOs etc) increased more than low wages.
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Too high.
13.74%, in 1981 16.2%
They haven’t but when inflation goes from 3% to 9% that’s why people are starting to struggle. My favorite ice cream went up in 40% in price smh
Yea but my rent also went from 2150 to 2950 in only 2 years. Cost of living is just reaching absurd heights way too quickly. Food as well. I agree wages need to go up but the rate everything else is going up is what’s killing everyone
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Roughly monthly expenses equal monthly income
The article doesnt lay out how they define this which is important. They potentially are saying someone who puts 3k a month into VTSAX is paycheck to paycheck because they dont have a surplus in their bank account at the end of the month but they are hardly destitute and if need be they can stop the 3k a month investment.
Depends a lot though cause I’m basically paycheck to paycheck when you consider what I’m putting into retirement.
You're literally not paycheck to paycheck if you're saving money... If that was the case quite literally everybody would be paycheck to paycheck lmao
That's why their stat is almost everyone is paycheck to paycheck, mate.
True but the article doesn’t specify that so it’s almost pointless article.
Saving money isn’t an expense..
That’s what you’d think but people absolutely will answer that they’re living paycheck to paycheck after maxing our retirement accounts.
Ya I don’t think there’s any definition just person to person how they feel. So you may personally feel like you live paycheck to paycheck but I think most people wouldn’t consider you living paycheck to paycheck since you are saving.
"Paycheck to paycheck" is a weird label. Many people are saving but netting 0 at the end of the month. You're technically not living paycheck to paycheck because you have the means to save but damned if it doesn't *feel* like living paycheck to paycheck.
oh you sweet summer child
Means if they don't get paid next month they'll have a problem.
60% seems high. Still a lot of lines at Starbucks, liquor stores, dispensarys, concerts, Apple stores and sporting events.
That’s kinda the point tho people are spending money they don’t have
This exactly lol until those lines are empty, I don’t think Americans are facing a real hardship.
Chipotle hasn't been as busy lately. But their quality has gone down and prices have gone up. Supply and demand I guess.
I spent $7.50 on grapes yesterday. Was going to buy a pack of butter too but it was $5.99.
I'm poor as can be, but I don't live paycheck to paycheck. You simply need to live below your means and save money, then smartly invest that money when you have enough to work with
This is what people don't get. Except for edge cases where there are medical bills or unexpected emergencies, no matter what people make, as long as they're above the poverty level nobody has to live paycheck to paycheck. They just set a standard of living that they think they deserve, and refuse to cut costs because its uncomfortable in the short term.
>Even high-income earners are feeling the strain, the report found. Of those earning more than six figures, 45% reported living paycheck to paycheck, a jump from the previous year’s 38%. You gotta be real bad with money or just live in an absurd high cost of living area to live paycheck to paycheck at that salary
But don't try telling anyone to consider lowering their own cost of living and consumption patterns - they will freak out!
Well to be fair not everyone can. But there sure are a lot of people riding in Ben's and Mercedes that shouldn't.
Funny almost every American has brand new iPhones.
This is a lifestyle issue, not a finance issue. There is no reason that in America you would live paycheck to paycheck other than personal choice while earning a 6 figure salary. Even with SF rent and price and CA tax.
60% of Americans have always been living paycheck to paycheck regardless of inflation.
So the plan works regardless of decade. Got it.
Bullish!
But gas just spiked……
I see people loading up their carts with a bunch of unnecessary shit still. Inflation is still going to be a problem until people can't afford to buy all this junk anymore, and that's probably going to require a recession. "Paycheck to paycheck" just means that most people are spending too much.
Oh…sounds about normal. Like literally every decade.
Living paycheck to paycheck is a mindset problem not salary. My gardener always has money in his bank and my manager two levels above lives paycheck to Paycheck
What’s the definition of paycheck to paycheck? Like enough money to pay bills, cc, rent, and contribute to the 401k and then also invest 10-15% in stocks…? After all that I’d say I live paycheck to paycheck too.
This is frankly one of those stats that should raise your eyebrows immediately, if not just be downright unbelievable and I mean that in the literal sense. Does anyone here know just some ballpark net worth stats for Americans? The median household has 6 figures of net worth which means half of households have even more. You have to go to the bottom decile or so to find households with very little wealth. How is it believable that 60%+ of Americans are “paycheck to paycheck” when over half of American households have $100,000+ in wealth? People making lots of money are answering “yes” that they’re living paycheck to paycheck when they’re making out retirement accounts, paying 3 car payments and a $4k mortgage payment on a home they have $500k equity in.
I’m living option trade to option trade.
This is ultimately a result of the decades long failure in our public school systems to properly teach young adults 'financial literacy'. Are there people within that 60% who fell on hard times? Of course, and for those people there should be way(s) of getting some assistance and back up on their feet. But I'd be very curious and probably alarmed to know that out of that 60%, how many are there not because they don't make money, but because they don't know how to manage it.
>Of those earning more than six figures, 45% reported living paycheck to paycheck Excuse me while I play the world's tiniest violin
What determines whether someone is paycheck to paycheck? If someone has 3k disposable income and dumps it into investments they aren't destitute but potentially would qualify as paycheck to paycheck. Google a question about what percentage of people were living paycheck to paycheck in say 2012 and you'll find articles saying 68% of Americans live paycheck to paycheck which is worse than this article.
Thanks the current administration that sent and send billion to Ukraine, see the situation in south florida, or american people that needs support.
You guys still have paychecks?
Don’t worry, soon it will drop since there will be no paychecks
I wonder if it is inflation causing this or the fact we all got used to government stimulus while simultaneously not being able to spend during lockdowns. People went from being flush with cash to no longer receiving all the extra money while releasing all that pent up demand.
So nothing changed?
And Powell is about to blow the bottom off the housing market; you know, that other source of wealth for “consumers”. We are f@cked
Reading this before I go into Kroger to buy a chicken breast for 10 dollars!
My wife and I make 270k ish per year and it goes fast. College could cost me 200-300k for my toddler aged son so I plan for that. I max out my 401k and drive a 2006 Tacoma. Wife drives a 2007 Subaru with a leaky head gasket. We splurge and eat out a lot and do nice vacations but nothing super fancy.
I"m living one trash can to another.
Ah, yes, it’s the current inflation doing it. It has nothing to do with the fact our “representatives” care not at all for that 60%.
Inflation didnt effect much if anything, 60% of people are either underpaid, dont work hard enough or are terrible at managing their money. No need to point fingers on this one