I work for a defense contractor -
In staff meeting yesterday we were talking about the government furloughs, which amount to 11 days in total, at least for the people we work with. So that's roughly one paycheck missed.
More or less a quote - The older guys who have savings will probably do okay, but for the young guy who has just bought a house and is living paycheck to paycheck, this could be a real problem.
The thing is, the lowest pay grade we work with I believe is GS-9, which makes roughly $50K at the lowest step. I don't understand how anyone could be living paycheck to paycheck on that!
I think you probably can imagine how somebody could be living paycheck to paycheck to what amounts to around $2470 per month take home, assuming only 5% TSP contributions. All you need is a mortgage, 1 car payment and student loans and you're easily paycheck to paycheck. And we're not talking a $300,000 house -- a $150,000 mortgage, with taxes and insurance will cost around $900 to $1200 per month (depending on how property taxes are in the area). That's nearly half your take-home pay right there. One car payment could run $200 to $350 per month. Student loans (say, around $25,000 or so) would put monthly payments around $200 to $300. Assuming the lowest end of those payments -- $1300 per month is for just your house, car and student loans. You have around $1100 left for everything else including electricity, gas, water, sewer, fuel, groceries, etc.
Now imagine this was a 4 person family and the grocery bill was around $400 per month (which is thrify for a 4 person family who isn't completely mustachian). You then have $700 left. Fuel for just one car will cost around $100 per month. There's $600 left now. Let's say they're pretty good about using less water, so a water/sewer bill of around $50 (this assumes it isn't hot right now and they have no lawn). $550 is left. If it's too cold, or if it's too hot, electricity/gas can run around $80 to $150 per month, reasonably. Using the $80 amount, there's $470 left. A four person house may have school activities. Let's say those run at around $50 per month, so there's $420 left. Oops... cell phone bills. Let's say they have a fairly thrifty family plan at $80 per month. $390 is left. And because these aren't really mustachian people, they have a $100 cable bill and a $40 internet bill. Now there's $250 leftover. The typical family of 4 will want to eat out sometimes. Let's say they spend $100 total on restaurants/fast food. Now there's $150 leftover. Kids need clothes.... now there's $75 left.
So on a fairly reasonable (although not quite mustachian) lifestyle, a family of 4 is left with $75 at the end of the month. If any of those categories wind up towards the high end, they're left with nothing. You actually don't have to spend money on outrageous things, or drive a gas-guzzling SUV to get into financial trouble, which is why, I think, MMM preaches about reducing or dropping the everyday bills most people think of as necessary. Of course, most people on this forum could find ways to slash the above budget so that it's easy for a family of 4 to live off of $2470 take-home pay per month. No cable, $10 cell phone plan, cut out the restaurants, sell the car and buy a bike, cut the grocery bill, reduce energy consumption. These kind of changes aren't in the vocabulary of most households, although I wouldn't exactly call the above budget "anti-mustachian."