Author Topic: Paycheck to Paycheck Nation - NPR - Dec. 16th  (Read 10187 times)


Master of None

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #1 on: December 16, 2020, 09:30:21 AM »
Can't believe that 2nd couple doubled their earnings by losing their jobs...good thing they got a dog to help spend all that money. Crazy.

KathrinS

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #2 on: December 16, 2020, 09:37:13 AM »
Not sure why they call his amplifier a ‚bill‘ or compare it to unexpected emergencies. The whole thing was quite astounding, I am also amazed that one of the couples decided to get a new dog when they are clearly struggling to pay for the two of them without added responsibility.

jps

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #3 on: December 16, 2020, 09:43:30 AM »
Reading through this, I found it really hard to be sympathetic with these folks. So much of it came down to their individual choices, and not external circumstances.

maizefolk

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #4 on: December 16, 2020, 09:46:50 AM »
Moderators, perhaps it makes sense to merge this thread with https://forum.mrmoneymustache.com/welcome-to-the-forum/paycheck-to-paycheck-nation/

PDXTabs

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #5 on: December 16, 2020, 09:47:16 AM »
The graph clearly shows that the people struggling the most are the ones grossing less than $25K/yr, which makes perfect sense, but they don't show single one.

But I do have plenty of sympathy for a single mom with two kids grossing $45k/yr.

Kris

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #6 on: December 16, 2020, 10:56:39 AM »
God, reading articles like this, I always vacillate between extreme anxiety, sympathy, and anger. My stomach churns at the very thought of living like that, and I feel so sorry for them... and then I look at their budgets and their FLOCK of dogs and I'm like...

Yeah, okay, what the fuck???

UpNAtom

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #7 on: December 16, 2020, 12:13:31 PM »
For me the line was: "While people with the lowest incomes face the biggest challenges, even some households making above $200,000 are straining to pay basic expenses."

Basic, struggling, and 200k do not generally go together.  The definition of basic included a generally statement about "mortgage" which means that any house is included in basic...

And then there was the budget that lumped food and eating out as one item (total deficit was ~400$) pre-pandemic which dropped ~500$ mid-pandemic.  Keeping everything else the same except food, would have put the person in the black.
« Last Edit: December 17, 2020, 01:02:17 PM by UpNAtom »

fat-johnny

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #8 on: December 17, 2020, 01:32:35 PM »
Can't believe that 2nd couple doubled their earnings by losing their jobs...good thing they got a dog to help spend all that money. Crazy.
Correction:  they got a dog AND he financed a bicycle  <facepalm>

fat-johnny

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #9 on: December 17, 2020, 01:35:37 PM »
My favorite paragraph of the whole thing:

"I didn't know what to do with myself," she says. "When you start making more money, you can upgrade your bills just a little bit. I got a new phone. I was like, 'This is a whole new world for me.' Still living — more comfortably — paycheck to paycheck."


"upgrade your bills"......did she just say that?!??  Is that even a thing?!??

It's not a whole new world for you.  You're still living paycheck to paycheck.....because you upgraded your bills!

Warlord1986

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #10 on: December 19, 2020, 07:45:18 PM »
Oh, thank God. I just read through the other post on this article in the 'Welcome to the Forum' section and was flabbergasted. People over there are talking about minimum wage and poor people neither one of which has nothing to do with the article.

The only person I have any twinge of sympathy for is the single mom earning $45,000. Raising two teens alone can't be easy, and I bet there are days she's just too tired to cook. I'll try to reign in my judgey-mcjudgerson self for her.

The rest of those people? With their purebred dogs, splurges on video games, and $600 amplifiers? Pfft. Zero sympathy. None. None whatsoever. They can sell some of the trash they've accumulated, stop going out to eat, rent out a room, and maybe think before getting a purebred dog next time.

Also, Latin might be a dead language, but Greek isn't. I'm willing to bet the one lady could scrounge up some paid translation work if she tried. She could probably teach and tutor to adults over the internet too, a lot of people are bored right now and would probably like to learn a new language.

That whole article left a bad taste in my mouth.

Abe

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #11 on: December 19, 2020, 08:22:13 PM »
Was going to post that mostly to point out it is not possible to live paycheck to paycheck on $200k without making the active choice to spend excessively, unless you live in Manhattan, have the worst health insurance ever, and just got out of a 3-week ICU stay after being mauled by your newly-bought flock of purebred dogs. I am embarrassed for my society that 8% of >200k households live paycheck to paycheck.
« Last Edit: December 19, 2020, 08:24:52 PM by Abe »

MudPuppy

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #12 on: December 19, 2020, 08:35:12 PM »
Honestly by the time I read through the other thread to where it had gotten when I commented, I was too shocked to remember the article itself, so I’m glad this one was bumped.


There’s bad circumstances and there’s bad choices. This article is almost exclusively about bad choices. And I say that as someone who dedicates about $500 a month (just shy of 15% of our total spending) on a completely luxury life choice (pets).

Kazyan

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #13 on: December 19, 2020, 08:54:48 PM »
There are certainly some issues in American economic policy, and you can have a discussion about what to do about specific observations, but the response to "people are making $200k and still living paycheck-to-paycheck" begins and ends with a laughing-crying emoji.

20957

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #14 on: December 20, 2020, 08:30:10 AM »
There was an article on vox a few days ago that actually talked about bad decisions being a part of the reason for paycheck-to-paycheck living. But it also talked about the reasons people make bad decisions, calling out the middle class culture that prioritizes certain types of consumer spending. I thought it was a nice change of pace for that type of article.

Spiffy

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #15 on: December 20, 2020, 11:23:34 AM »

Also, Latin might be a dead language, but Greek isn't. I'm willing to bet the one lady could scrounge up some paid translation work if she tried. She could probably teach and tutor to adults over the internet too, a lot of people are bored right now and would probably like to learn a new language.

That whole article left a bad taste in my mouth.
I'm sure this is ancient Greek, not modern. The two are very different. I am surprised that with only a masters she has a job at all. My husband is a classicist with an Ivy league PhD and feels lucky to have a permanent lectureship at a University.

Nicholas Carter

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #16 on: February 10, 2021, 07:39:59 PM »
There was an article on vox a few days ago that actually talked about bad decisions being a part of the reason for paycheck-to-paycheck living. But it also talked about the reasons people make bad decisions, calling out the middle class culture that prioritizes certain types of consumer spending. I thought it was a nice change of pace for that type of article.
I have a friend, a very money conscious independent contractor, who has explained to me that because their contract renewals are so reliant on the customer's office politics, failing to impress with fancy lifestyle markers at supposedly casual meetings like work luncheons can result in them losing their job.

Not sure why they call his amplifier a ‚bill‘ or compare it to unexpected emergencies. The whole thing was quite astounding, I am also amazed that one of the couples decided to get a new dog when they are clearly struggling to pay for the two of them without added responsibility.
The articles' point is that based on the bills most people report not being able to manage, he probably spent more money than was in his wife's entire emergency fund.

Hula Hoop

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #17 on: February 11, 2021, 02:42:16 AM »
I do feel bad for the first couple as their daughter died of brain cancer and they were left with medical debt.  That's horrible.  But I still had so many questions.

Like, why does a massage therapist have big student loans?  How expensive is it to get certified as a massage therapist? How is she earning more now that she's unemployed and how can she "upgrade her bills"?  is her boyfriend using the new bike instead of owning a car? That might make sense in a city like Austin. Why does a person earning $30k as an adjunct professor spend spend so much on random crap in order to live a "middle class lifestyle." Do they really need a big house and 2 cars if they're both retired and their kids are grown? And why is a single mother earning $45k buying her teenage daughter a car?   And how was she spending $800 a month on food?
« Last Edit: February 11, 2021, 02:50:50 AM by Hula Hoop »

ducky19

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #18 on: February 11, 2021, 11:17:01 AM »
There was an article on vox a few days ago that actually talked about bad decisions being a part of the reason for paycheck-to-paycheck living. But it also talked about the reasons people make bad decisions, calling out the middle class culture that prioritizes certain types of consumer spending. I thought it was a nice change of pace for that type of article.
I have a friend, a very money conscious independent contractor, who has explained to me that because their contract renewals are so reliant on the customer's office politics, failing to impress with fancy lifestyle markers at supposedly casual meetings like work luncheons can result in them losing their job.

This. This is one of the reasons I never followed through with a career change into financial advising. I have no desire to drive a fancy car, but you don't exactly ooze "success" by rolling into someone's driveway in an '07 Vibe... :)

charis

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #19 on: February 11, 2021, 11:49:35 AM »
I do feel bad for the first couple as their daughter died of brain cancer and they were left with medical debt.  That's horrible.  But I still had so many questions.

Like, why does a massage therapist have big student loans?  How expensive is it to get certified as a massage therapist? How is she earning more now that she's unemployed and how can she "upgrade her bills"?  is her boyfriend using the new bike instead of owning a car? That might make sense in a city like Austin. Why does a person earning $30k as an adjunct professor spend spend so much on random crap in order to live a "middle class lifestyle." Do they really need a big house and 2 cars if they're both retired and their kids are grown? And why is a single mother earning $45k buying her teenage daughter a car?   And how was she spending $800 a month on food?

Many former students with loans were unable to complete their degree and had to move onto a different, usually low paying field.  No idea what happened here, but I've known a few folks who dropped out of college and got into massage therapy.

PDXTabs

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #20 on: February 12, 2021, 10:31:54 AM »
I do feel bad for the first couple as their daughter died of brain cancer and they were left with medical debt.  That's horrible.  But I still had so many questions.

Like, why does a massage therapist have big student loans?  How expensive is it to get certified as a massage therapist? How is she earning more now that she's unemployed and how can she "upgrade her bills"?  is her boyfriend using the new bike instead of owning a car? That might make sense in a city like Austin. Why does a person earning $30k as an adjunct professor spend spend so much on random crap in order to live a "middle class lifestyle." Do they really need a big house and 2 cars if they're both retired and their kids are grown? And why is a single mother earning $45k buying her teenage daughter a car?   And how was she spending $800 a month on food?

Many former students with loans were unable to complete their degree and had to move onto a different, usually low paying field.  No idea what happened here, but I've known a few folks who dropped out of college and got into massage therapy.

Yup, most people with student loan debt did not graduate. This is in part because they have more trouble paying it off, for obvious reasons.
https://oneclass.com/blog/featured/182226-what-percent-of-student-loan-borrowers-never-graduate3F.en.html

Hula Hoop

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #21 on: February 12, 2021, 02:17:47 PM »
I do feel bad for the first couple as their daughter died of brain cancer and they were left with medical debt.  That's horrible.  But I still had so many questions.

Like, why does a massage therapist have big student loans?  How expensive is it to get certified as a massage therapist? How is she earning more now that she's unemployed and how can she "upgrade her bills"?  is her boyfriend using the new bike instead of owning a car? That might make sense in a city like Austin. Why does a person earning $30k as an adjunct professor spend spend so much on random crap in order to live a "middle class lifestyle." Do they really need a big house and 2 cars if they're both retired and their kids are grown? And why is a single mother earning $45k buying her teenage daughter a car?   And how was she spending $800 a month on food?

Many former students with loans were unable to complete their degree and had to move onto a different, usually low paying field.  No idea what happened here, but I've known a few folks who dropped out of college and got into massage therapy.

Yup, most people with student loan debt did not graduate. This is in part because they have more trouble paying it off, for obvious reasons.
https://oneclass.com/blog/featured/182226-what-percent-of-student-loan-borrowers-never-graduate3F.en.html

That sucks.  I noticed that the single mother in the article had gone to culinary school but had then changed careers into something in the medical field.  I guess she's probably still paying off the culinary school debt.

The_Big_H

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #22 on: February 13, 2021, 11:20:33 AM »
There was an article on vox a few days ago that actually talked about bad decisions being a part of the reason for paycheck-to-paycheck living. But it also talked about the reasons people make bad decisions, calling out the middle class culture that prioritizes certain types of consumer spending. I thought it was a nice change of pace for that type of article.
I have a friend, a very money conscious independent contractor, who has explained to me that because their contract renewals are so reliant on the customer's office politics, failing to impress with fancy lifestyle markers at supposedly casual meetings like work luncheons can result in them losing their job.

This. This is one of the reasons I never followed through with a career change into financial advising. I have no desire to drive a fancy car, but you don't exactly ooze "success" by rolling into someone's driveway in an '07 Vibe... :)

One of the great perks of an engineering job, there is very little lifestyle expectation.  Though it is pretty funny to roll up on the job site and have a much shittier car than the construction workers (and their brodozers)

Just Joe

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #23 on: February 13, 2021, 01:20:24 PM »
Extra points if the car has mismatched paint on various parts of the car... ;)

TheFrenchCat

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #24 on: February 13, 2021, 02:19:20 PM »
My husband's an engineer, and he's said it's a point of pride among his colleagues to show off how long you can keep the car running.  Plus we once let our 5-year-old pick the paint for the door once.

ixtap

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #25 on: February 13, 2021, 02:28:55 PM »
Dad once patched up some rust with duct tape. Mom covered the duct tape with 70's flowered contact paper. My brother had to learn to drive in this flower power car.

SavinMaven

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #26 on: February 14, 2021, 01:51:45 PM »
Is there an actual definition for "living paycheck-to-paycheck"? How much do you have to have in your 'stache to NOT be doing that anymore?

charis

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #27 on: February 14, 2021, 02:37:28 PM »
Is there an actual definition for "living paycheck-to-paycheck"? How much do you have to have in your 'stache to NOT be doing that anymore?

It varies. The commonly understood definition is folks who spend everything they make so that if they missed the next paycheck, they'd be in trouble.  Once you have a decent EF and the ability to save part of each paycheck, you technically aren't living paycheck-to-paycheck

maizefolk

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #28 on: February 14, 2021, 02:42:22 PM »
I'd agree with that definition: "Could miss a paycheck and it wouldn't be an immediate crisis."

MudPuppy

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #29 on: February 15, 2021, 01:04:42 AM »
I think once you reliably find yourself with extra money at the end of the month instead of extra month at the end of the money, you’re no longer paycheck to paycheck.

HotTubes

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #30 on: February 18, 2021, 07:55:03 PM »
I think once you reliably find yourself with extra money at the end of the month instead of extra month at the end of the money, you’re no longer paycheck to paycheck.

I like this as a practical definition, and have certainly lived both of those types of months

talltexan

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #31 on: March 01, 2021, 06:28:33 AM »
My wife switched roles within her large company, and they're still trying to get her paycheck calculated correctly. They overpaid her in January, and they're clawing it back over 2-3 paychecks this month. It's not meaningfully changing our behavior, which is an indicator that we aren't living p-2-p.

Just Joe

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #32 on: March 01, 2021, 11:16:10 AM »
I'd agree with that definition: "Could miss a paycheck and it wouldn't be an immediate crisis."

Considering the articles explaining that a large number of Americans couldn't raise $500 on short notice, you MUST be rich! ;)

Monerexia

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #33 on: March 01, 2021, 10:34:32 PM »
Guess I'm safe--if there was an all-stop I'd have right at 90 years of housing expenses assuming 0% return and no inflation. Infinity if SWR and returns per ushe. How the hell do people get in such binds--oh wait, they're not monerexic nvm

talltexan

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #34 on: March 02, 2021, 06:09:20 AM »
I'd agree with that definition: "Could miss a paycheck and it wouldn't be an immediate crisis."

Considering the articles explaining that a large number of Americans couldn't raise $500 on short notice, you MUST be rich! ;)

Is that $500 figure real? If you have to put the balance on a credit card, doesn't that mean you've successfully raised it on short notice?

maizefolk

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #35 on: March 02, 2021, 07:11:11 AM »
I suspect the $500 figure comes from the surveys Bankrate puts out every so often -- and then puts out press releases on -- and reflects the proportion of americans who have $500 in savings. Example quote (they put these out every year or two so the exact numbers may be different):

Quote
Almost two in three Americans don’t have enough savings to pay for a $500 car repair or a $1,000 emergency room bill, according to a new Bankrate.com

Only 37% of U.S. adults have enough savings to pay for these unexpected expenses. 23% would reduce their spending on other things to make ends meet, 15% would use credit cards and another 15% would borrow from family or friends.

Just Joe

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #36 on: March 02, 2021, 07:32:19 AM »
Yep, what Maizefolk said. I've wondered how accurate the data is or if that is a statistical "ghost" or "myth".

Hall11235

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #37 on: March 02, 2021, 07:51:57 AM »
I will admit sympathy for all these folks. Obviously, their choices are MUCH less than ideal, but it can be easy to be blinded by the need for more and easy to be blinded by unwillingness to change. I have given up on trying to convert Friends to MMM, since they just can't understand that things cost time, not money. The Lambo my friend wants is not $100000 (though it is that, lol), its 2800 working hours. At this point, I just recommend Taleb's 'Skin in the game' and 'Anti-Fragile' and call it a day.

But, even if we take that attitude and reduce it, it can be really hard for a couple living 'paycheck-to-paycheck' to understand that it doesn't have to be that way. Especially without someone to FacePunch them regularly. Not totally sure what I am trying to say here, only that I can empathize with this attitude of spending hand to mouth, especially in the middle class 'keeping up with the Jones's' mentality.

UpNAtom

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #38 on: March 02, 2021, 10:02:01 AM »
The Lambo my friend wants is not $100000 (though it is that, lol), its 2800 working hours.
I totally agree with the above.  I would only add that it is often worse than that since it is hours in addition to any expenses they already have.  (100k / 2.8k = 35/h)  If they barely save 5/hr of their 35/hr, they are really looking at 20,000 hours.

Hall11235

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #39 on: March 02, 2021, 10:12:35 AM »
The Lambo my friend wants is not $100000 (though it is that, lol), its 2800 working hours.
I totally agree with the above.  I would only add that it is often worse than that since it is hours in addition to any expenses they already have.  (100k / 2.8k = 35/h)  If they barely save 5/hr of their 35/hr, they are really looking at 20,000 hours.

That is a terrific point! It just astounds me how this concept can elude people that we think of as intelligent. For me, and the other amazing people on this forum, its like, "Damn, is that latte really worth 15 minutes of a time?, when a comparable cup of coffee, made at home is 2 minutes of my time?"

Monerexia

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #40 on: March 02, 2021, 01:41:01 PM »
I will admit sympathy for all these folks. Obviously, their choices are MUCH less than ideal, but it can be easy to be blinded by the need for more and easy to be blinded by unwillingness to change. I have given up on trying to convert Friends to MMM, since they just can't understand that things cost time, not money. The Lambo my friend wants is not $100000 (though it is that, lol), its 2800 working hours. At this point, I just recommend Taleb's 'Skin in the game' and 'Anti-Fragile' and call it a day.

But, even if we take that attitude and reduce it, it can be really hard for a couple living 'paycheck-to-paycheck' to understand that it doesn't have to be that way. Especially without someone to FacePunch them regularly. Not totally sure what I am trying to say here, only that I can empathize with this attitude of spending hand to mouth, especially in the middle class 'keeping up with the Jones's' mentality.

Yes there's always some kind of nonsense they "need" to spend it on. The death by a thousand cuts and also the big ticket items when they're just within reach--financing a Harley through Harley with marginal credit eg. They're really upside down in every possible way haha. When I realized that it's almost always better to have the money and as old Munger put it, "the first 100K is a bitch but you gotta do it," things started getting better and better. Applying that same formula that got me there to 1M and really feels like an end unto itself, the opposite of a burden.

Hall11235

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #41 on: March 02, 2021, 02:09:24 PM »
I will admit sympathy for all these folks. Obviously, their choices are MUCH less than ideal, but it can be easy to be blinded by the need for more and easy to be blinded by unwillingness to change. I have given up on trying to convert Friends to MMM, since they just can't understand that things cost time, not money. The Lambo my friend wants is not $100000 (though it is that, lol), its 2800 working hours. At this point, I just recommend Taleb's 'Skin in the game' and 'Anti-Fragile' and call it a day.

But, even if we take that attitude and reduce it, it can be really hard for a couple living 'paycheck-to-paycheck' to understand that it doesn't have to be that way. Especially without someone to FacePunch them regularly. Not totally sure what I am trying to say here, only that I can empathize with this attitude of spending hand to mouth, especially in the middle class 'keeping up with the Jones's' mentality.

Yes there's always some kind of nonsense they "need" to spend it on. The death by a thousand cuts and also the big ticket items when they're just within reach--financing a Harley through Harley with marginal credit eg. They're really upside down in every possible way haha. When I realized that it's almost always better to have the money and as old Munger put it, "the first 100K is a bitch but you gotta do it," things started getting better and better. Applying that same formula that got me there to 1M and really feels like an end unto itself, the opposite of a burden.

You and ol' Charlie speak wisdom, for sure. That first step is so damn hard though, lol. I'm young (26) and feel like no one in my entire friends group even give a shit about saving or advancing their careers to retire. The classic line I get is, "The average american makes $900000 in their working career, I have tons of time to save!" The lack of agency people are willing to take for their financial situation is wild to me. As you said, death by a 1000 papercuts (Rome wasn't built in a day), can make the death feel almost painless until, bam, you're dead (45 with no savings).

SunnyDays

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #42 on: March 02, 2021, 03:12:17 PM »
^^^^^ Yup.  As Dr. Phil says, “Days turn into weeks, weeks turn into months, months turn into years.”  (Years turn into decades.)  And nothing different happens.

Fae

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #43 on: March 03, 2021, 02:18:43 PM »
Yep, what Maizefolk said. I've wondered how accurate the data is or if that is a statistical "ghost" or "myth".

I can see it, especially if the studies are counting low earners. For example, my brother made $19,000 gross in 2019 so $500 is 2.6% of his Pre-tax income. A thousand would be over 5% and that's not factoring in the money he never sees that goes to Social Security, Medicare, Federal tax and State tax. Now, he is very frugal and he does have money saved up but those amounts would be painful for him to part with so he would probably try to temporarily lower his expenses (one of the answers given on the survey) to help make up for it. So I guess I'm saying, it's a believable number if only because it's a large amount of money for a lot of people.   

maizefolk

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #44 on: March 03, 2021, 03:57:20 PM »
Oh I can definitely believe that only a minority of americans have $500 in savings. It's just the translation from "don't have $500 in savings" to "couldn't could come up with $500 in an emergency" where I think some information is lost in the game of telephone which is the internet.

PDXTabs

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #45 on: March 03, 2021, 06:14:25 PM »
Oh I can definitely believe that only a minority of americans have $500 in savings. It's just the translation from "don't have $500 in savings" to "couldn't could come up with $500 in an emergency" where I think some information is lost in the game of telephone which is the internet.

Yea, the best data I've see on it is from https://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf which says:

Forty-six percent of adults say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.

So, strictly speaking, if you have 16 Krugerrands but less than $400 in USD you would get caught up in that statistic.


dcheesi

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #46 on: March 04, 2021, 06:44:58 AM »
Oh I can definitely believe that only a minority of americans have $500 in savings. It's just the translation from "don't have $500 in savings" to "couldn't could come up with $500 in an emergency" where I think some information is lost in the game of telephone which is the internet.

Yea, the best data I've see on it is from https://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf which says:

Forty-six percent of adults say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.

So, strictly speaking, if you have 16 Krugerrands but less than $400 in USD you would get caught up in that statistic.
So that does skew things a bit, especially if we're talking about selling shares from a regular taxable investment acct.

But do people with money to invest really run their cash accts with <$400 in reserve? Seems like at that level you'd be inviting overdraft fees for the slightest oversight in cashflow management. Personally I keep an order of magnitude more in my checking acct, just avoid that risk as well as the mental effort of keeping up with the day to day balances.
« Last Edit: March 04, 2021, 06:48:40 AM by dcheesi »

maizefolk

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #47 on: March 04, 2021, 07:12:12 AM »
Thanks, PDXTabs. I agree that is significantly better data. And while there is probably someone who answered the survey and picked sell something because they'd go in the back yard and dig up one of their krugerands to sell, or "borrow the money" because they'd call up their brokerage and take out a margin loan (like MMM illustrated) neither is likely a common enough situation to meaningfully influence the percentages.

I would just add that from the same survey only 14% of people said that they couldn't cover a $400 expense right now (which I think is what the much larger percentages sometimes end up being misinterpreted to mean).

talltexan

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #48 on: March 04, 2021, 07:48:11 AM »
Oh I can definitely believe that only a minority of americans have $500 in savings. It's just the translation from "don't have $500 in savings" to "couldn't could come up with $500 in an emergency" where I think some information is lost in the game of telephone which is the internet.

Yea, the best data I've see on it is from https://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf which says:

Forty-six percent of adults say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.

So, strictly speaking, if you have 16 Krugerrands but less than $400 in USD you would get caught up in that statistic.

Are y'all gonna take away my MMM card if I live in a place where the parking meters accept Krugerrands?

ducky19

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Re: Paycheck to Paycheck Nation - NPR - Dec. 16th
« Reply #49 on: March 04, 2021, 07:49:11 AM »
Oh I can definitely believe that only a minority of americans have $500 in savings. It's just the translation from "don't have $500 in savings" to "couldn't could come up with $500 in an emergency" where I think some information is lost in the game of telephone which is the internet.

Yea, the best data I've see on it is from https://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf which says:

Forty-six percent of adults say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.

So, strictly speaking, if you have 16 Krugerrands but less than $400 in USD you would get caught up in that statistic.
So that does skew things a bit, especially if we're talking about selling shares from a regular taxable investment acct.

But do people with money to invest really run their cash accts with <$400 in reserve? Seems like at that level you'd be inviting overdraft fees for the slightest oversight in cashflow management. Personally I keep an order of magnitude more in my checking acct, just avoid that risk as well as the mental effort of keeping up with the day to day balances.

My checking account currently has $1.62 in it. Everything else is swept to Roth (and other investments once that's maxed). All expenses go on a rewards card that is paid off every month. We do have around $4000 in our online savings and another $4500 in our rental account that could be pulled on for cash if there was an immediate need, also my wife always has some cash on her. My family knows that I don't keep cash - it seems when I do, there are a thousand little needs that bleed it dry from them and it's gone like a fart in the wind. I think Pete says something about it somewhere about cash - there's no accounting for it, it just gets spent. By putting all of my spending on the card, I'm able to see exactly where every dollar went. But yeah, the checking account is loaded with money once a month from payroll, then allocated to bills and investments.