Operating Without Savings

[totoro]

While I recognize the employer is in the wrong here perhaps through no fault of their own, I'm not able to empathize fully on the paycheque to paycheque lifestyle.

https://ca.news.yahoo.com/phoenix-federal-payroll-system-plagued-with-211443434.html

[Syonyk]

Over the next three and half months, between $500 and nearly $900 was missing from the federal public service employee’s monthly earnings.

I've been there.  Fresh out of college, I was operating on about $2200/mo and zero savings, because, well, college.

I assumed I'd be able to find roommates, so I was paying $900/mo rent.  It was a very nice place, and my assumption that finding roommates would be easy was entirely wrong - so rent was nearly a whole paycheck (twice a month, just under $1100/paycheck).  Utilities were all on my dime, and even though I kept the place damned cold in the winter (45F on the thermostat), I was still spending over 50% of takehome on rent and utilities.

Things were pretty damned tight.  I ate a lot of ramen, and I had vehicles, but they weren't the most reliable things on the planet.  I was frequently working on a car late into the evening so I'd be able to get to work the next day.  When you've got a serious coolant leak in the dead of winter and it's too cold for the motorcycle to start, you fix the problem.  Even if you can't feel your fingers.

If I were missing $500/mo, I probably could have stretched things for a month or two.  If I were missing $900/mo, there would have been no way for me to come anywhere close to paying for everything I needed.  I literally wouldn't have anything after rent and utilities.

I don't know the guy's situation.  But depending on where one is in life, one may not have savings to fall back on.

[totoro]

I know there are exceptions, but an emergency fund is something you can plan for most of the time and it can be prioritized.  Coming out of college with zero savings isn't a foregone conclusion.  Renting a whole place you can't afford on your own while assuming you'll find room-mates is maybe not a great choice with zero savings.  There is a pretty big element of control over spending/saving choices most of the time.

I have a lot of sympathy for people with medical issues who can't work, and maybe he has gone through a difficult divorce leaving him with little to fall back on.  I just find it a bit stressful to read about someone with kids who has a good job, but has so many things fall apart because of paycheque delay.  And this is actually really common in Canada even though we have national medical care and a social safety net.  In a national poll almost half of Canadians said they are living paycheque to paycheque and would find it difficult to meet their financial obligations if their pay was delayed by just a week. 

[BTDretire]

What will be interesting is after all this belt tightening and living on less,
how long will it take after he gets the lump sum payment to be totally broke again.

[slugline]

Interesting that the new payroll system is called Phoenix. Did the old one go up in flames?

[Moostache]

In this case it sounds like naming it Phoenix was just self-fulfilling prophecy.

Interesting that the new payroll system is called Phoenix. Did the old one go up in flames?

[MMM98]

Over the past few years US Federal employees have had periods of no pay and reduced pay.  The news is full of employees with dire personal emergencies because of one lost pay check.  While I am empathetic of public servants bearing the brunt of our do nothing Congress (am a Fed myself) I am not empathetic about no savings and the lack of personal responsibility of grown adults.

[Inaya]

Over the past few years US Federal employees have had periods of no pay and reduced pay.  The news is full of employees with dire personal emergencies because of one lost pay check.  While I am empathetic of public servants bearing the brunt of our do nothing Congress (am a Fed myself) I am not empathetic about no savings and the lack of personal responsibility of grown adults.

I was a non-Fed contractor who worked with a bunch of Feds during the 2013 shutdown. During the shutdown, there was a lot of stress from the Feds who had trouble meeting their financial obligations--and there were some pretty hard feelings toward us contractors who continued to work and get paid. The resentment flipped the other way when all of the Feds got full back pay (basically resulting in a 2 week paid vacation) and then treated their back pay like some kind of windfall and buying TVs and whatnot. I was very sympathetic that they couldn't pay their bills--I didn't have much of an emergency fund at the time myself, and until the first day of the shutdown, nobody could even tell the contractors whether we'd keep working--but it's hard to be sympathetic when they spend what amounts to a 2-week paid vacation complaining about not paying their bills, and then wasting it all on TVs and other luxuries anyway.