You example, again, is only valid for San Francisco.
That is one city in the entirety of the US. If you are paying $2600 for a one bedroom on $80,000 you are living above your means anywhere else in the US.
-
Ever wanted an RSS feed of all your favorite gaming news sites? Go check out our new Gaming Headlines feed! Read more about it here.
Paycheck-To-Paycheck Nation: Why Even Americans With Higher Income Struggle With Bills
- Thread starter Pet
- Start date
That is one city in the entirety of the US. If you are paying $2600 for a one bedroom on $80,000 you are living above your means anywhere else in the US.
I'm actually not talking about San Francisco. That rent goes up if you're in SF. Plus, you're the one who came in with the wild accusation that if you're living week to week on $80k you must be budgeting poorly without factoring in the cost of living in the more expensive areas beyond just SF.
Yeah daycare fucking blows. We're paying around $1500/mo now and will be paying $2800/mo come Jan. Yay.
But then you have ERA telling people how rich they are if they dare make a penny more than the person posting.
My first 5 years or so out of high school I lived paycheck to paycheck because I lived at home and it didn't matter if I ran out of money. I eventually realized that wasn't the best idea, and now I try to save at least half my paycheck. I've also realized its nicer to save up for a few nice things rather than a lot of things I think are neat at the time.
I probably take it a bit too far, but I always think of ways to not spend money. For example, if something I own breaks, I always try to fix it before I replace it. And I don't buy new things just to have new things.
I've also learned how to do my own car work, which has saved me massive amounts of money over the years. Its what allowed me to own 6 cars while making $12/hour.
Yeah, in 2018 I think, all cars are required to have backup cameras.
I do agree that people want more car than they can afford. Also people are less likely to repair their car and instead buy a new one, keeping them with a car payment. I can see why someone might think that putting more into a car than its worth for a major repair is a bad decision, but if you work it out, its still cheaper in the long run than buying a new car.
I probably take it a bit too far, but I always think of ways to not spend money. For example, if something I own breaks, I always try to fix it before I replace it. And I don't buy new things just to have new things.
I've also learned how to do my own car work, which has saved me massive amounts of money over the years. Its what allowed me to own 6 cars while making $12/hour.
Yeah, in 2018 I think, all cars are required to have backup cameras.
I do agree that people want more car than they can afford. Also people are less likely to repair their car and instead buy a new one, keeping them with a car payment. I can see why someone might think that putting more into a car than its worth for a major repair is a bad decision, but if you work it out, its still cheaper in the long run than buying a new car.
In any decent sized city in the US the median home price gives you around a $2k or more mortgage payment. So the point is still relevant and he's not even factoring in healthcare, cc debt, or childcare...
Wages are stagnant as fuck. Like what is your argument even? Go live in the boonies and everything will be fine?
This is about a one person income of $80,000 and still living paycheck to paycheck.
If you are a two person household with kids and a house obviously $80,000 total household income is a different situation.
A single person with $80,000 income, outside of the most expensive coastal cities, should, in the absence of massive student debt, be able to avoid having to live paycheck to paycheck.
Why do you want to throw out student debt? As if that doesn't impact one's monthly income as a one person household?
Colleges have the exit interviews, but they should really do entrance interviews about this stuff.
So funny how I was sweating my initial 130$ a month loan for ten years, so i changed it to 15 for 76$ a month to start (ballooned, but ended up paying it off early)
So funny how I was sweating my initial 130$ a month loan for ten years, so i changed it to 15 for 76$ a month to start (ballooned, but ended up paying it off early)
Lifestyle creep and stretching your budget to the absolute limits is a design of American capitalism. Go to Google and do a layman-style search like "how much of a mortgage can I afford". The suggested mortgage for me is literally $200,000 MORE than the ceiling I've set for myself while thinking about buying a house with my partner. People are constantly misled to make financial decisions that have them bleeding every single cent so that their income is offset by cost-of-living. The last thing our economy wants is people intelligently managing their money.
Because that was my entire original point. Absent student debt it should be possible to not have to live paycheck to paycheck on $80,000
I always made clear that if you have big student debt then that is obviously a harder situation.
Someone in a 1 person household making $80k, likely is going to have student debt though. Even without it, the difference is going to be simply saving for an emergency.
I make like 72k and I live in minneapolis. I have 40k student loan debt and CC debt. I have a $300 a month car payment. I pay $900 in "rent" (half the mortgage). I put 15% into my 401k. State and fed taxes take like 30% of my take home factoring in SS/medicare. Utilities internet phone water electric gas garbage call it $300/mo. Car insurance and gas add another $200. Groceries add $200.
I have some left over but not a lot and I'm not even in a coastal city ... Btw mpls isn't exactly considered cheap if you look at cpi. Most of the top 20 cities in the US are not.
I say again what is your argument exactly?
For those making 100k and fucking up, yeah.
For everyone else, how about a decent living wage, insurance and a pension?
Why are you pretending not to read that I keep saying "absent student debt"?
Because it's a logical fallacy. To make $80k generally speaking you have student loan debt...
I also still don't understand the point of that argument.
It's like well if you were debt free it's roses.
Lol of course it is. What a stupid ass argument.
It is not a fallacy when I make it clear that I am talking about that specific situation whether or not you consider that common.
Are they likely to have student debt? I don't know the statistics tbh, but I wonder what they are and how much. I managed to graduate recently with no debt, but I also saved up before college, and went to community college before transferring to finish my degree. I would assume that's not what the average person does, but I still wonder. Personally I would make paying off student loans priority before taking on any other debt, but I guess everyone has different situations.
Some people get lots of scholarships, my friend paid for most of his school with scholarships. Also some people stay at their parents house for a few years after college to pay it off real quick. Or you're able to work and go to school part time instead of doing the usual full time school. Theres ways to not be in lots of debt after college, obviously it requires fortunate situations though.
Ok you win the debt free being awesome argument of the day. Good for you.
Right the "some people" is a big point of this entire thread... I'm sure their parents had absolutely nothing to do with that debt disappearing either lol beyond living rent free for years.
I'd generally say there is a cost of living component to take into consideration when you make this comparison. I don't know what the technical term is, but I'm sure there's kind terminology that describes the income/cost-of-living delta. We should figure that out for each region and set a goal to live within a certain reasonable delta.
Okay, let's remove the student loan from my equation. At $4500 a month, you're getting $1125 a week. So if you get paid weekly, and you miss one paycheck, that $400 student loan difference if it doesn't exist doesn't outweigh the missing $1125. By definition living paycheck to paycheck means you can't afford to live without each paycheck. So you pinning it on student debt or not being a factor doesn't change the point at all in the end.
I know the stat is something like a person with a degree on average makes 2.5 times more than someone who doesn't. So I have to think someone hitting that high of an income more than likely has a degree and went to school and likely took on a student loan. Given how often we talk about how big of an impact student loans are, it's probably likely but you're right I don't have any stats off hand that shows how many people and what percentage fall under that criteria. Sure not everyone, but I have to imagine it's more common than not.
Yeah, and this is the problem in every single thread like this: people will come in and not be able to see beyond their own circumstances.
Its still worth pointing out. If you graduate with student loans, and your parents let you continue living with them rent free, or for a small rent payment, then it would be the smart move to make. I get that once you get a good paying full time job, you'd want to move out and start your own life, but I'd consider paying off debt and saving money the logical choice to make.
Yeah not everyone has that option and I'm also saying in that scenario I bet 90% of the time the parents are also making the bulk of the loan payments...
And no it's actually not really worth pointing out imo.
Dunno why people are so fixated on dollar amounts honestly.
Like, the idea that we as society should re-examine the culture of consumerism/materialism and lack of financial literacy doesn't mean "lol personal responsibility/ bootstrap harder."
If people who have higher incomes, relative to COL, still are living paycheck to paycheck, it's worth wondering if society has failed us in some way. That also doesn't mean that because this one thing could be true, nothing else could be true.
Like, it's not this OR that Americans in general aren't paid enough. Both can exist and be true at the same time. Dunno why people act like everything is so black or white.
Its actually a perception they can afford it, which is the real trap.
Because unless they make enough to buy that vehicle fully in cash without it cutting into necessary expenses, all they're doing is expanding their liabilities.
I did the exact same thing and I'm still paying for it in my 30s.
Well... I should have put "" around afford
Buuut..with interest rates the way they are.. and market returns the way they have been for a decade... I'd argue it's dumb not to finance.
or, in my opinion, they can buy a $10k used car that does a good job instead of a $50k new car with extra bells and whistles (even if they're part of the new standard safety features). Of course, that'd be for your typical suburb/city folks. I cannot say what the car needs are in more rural area.
I remember reading another thread on here where everyone listed their monthly outgoings and it made me want to have a panic attack.
It's ridiculous. We obviously couldn't afford the $1600-2000/month for two kids. That's 2-2.5 times our mortgage payment! More power to you if you can do the $2800.
Kids. So expensive. Yet there's always someone attempting to be judgemental about how and what and where you do what you do with your kids. I used to work for CPS so I've seen the even uglier side of that coin.
Just to add on to this, assuming you live in a low or medium cost of living area, always stick to the 30% rule. There's a whole range of houses in these areas that don't have to be small 50s ranchers, but they're also not 90s McMansions. Although beware of asbestos/lead paint and/or polybutylene pipes.
Ehhh....vehicles are kinda tricky because there are some scenarios where the newer, higher priced vehicle is actually the better buy. People still make the mistake of buying used luxury vehicles and are completely blindsided when continued repairs for their Beamer/Audi easily outstrips, say, a standard trim Accord fresh off the lot.
Of course, to make this comparison more apt, a $10K used Beamer is still likely the smarter move over a brand new $50K one, but like with anything else you just have to knowledgeable of what you're getting.
Anyone who can put 10-15% of their earnings in savings a year is, by definition, not living paycheck to paycheck. People who live paycheck to paycheck literally cannot save any of their earnings.
What does that have to do with anything?
A person making 40k can be good or bad with money. Same with someone making 500k.
Is retirement and savings the same thing? I don't really think they are. As SS if it even exists when I retire isn't enough and pensions are basically non-existent these days in the US.
Is a retirement account a form of savings? Yes I guess, but I also don't want to be homeless in my 70s so it's frankly a necessity vs just a rainy day savings account.
The fact I'm even talking about this is a good example of there being a huge problem with society in general.
401ks also are not very liquid and there are penalties for withdrawing early. By definition it isn't savings.
Yeah, it depends. Though I agree that no one should buy luxury cars unless they have the disposable income for one. But I also wouldn't consider buying a BMW made in the last 10 - 15 years a smart move no matter the price savings.
A standard new Accord off the lot is a smarter move than any luxury car, but I'd still argue a used Accord is the smarter choice. But then again you have to be knowledgeable about what you're buying like you said. Even a used Accord can be a bad purchase if its been neglected, or if its a V6 automatic made in the late 90s to mid 2000s that have transmission failures. Or the newer 1.5L turbo where gas leaks into the crankcase.
It can be hard is a lot of places. Even here in Phoenix where home prices aren't that bad, I know I'll be spending more than 30% of my income on my mortgage when I'm ready to buy a house. Either that or I have to live in the middle of the desert.
When you have the money spending just slowly creeps up. You buy better food, clothes, eat out more often and fancier etc.
It sounds stupid but personally i found it easier to stick to my budget on minimum wage rather than where i'm now.
Of course your life quality is higher than on minimum wage but i can easily see how people overspend even on 100k.
This is an absurd framing of this issue.
Yes? Retirement savings are savings. Of course you don't want to be homeless in your 70's, but someone living paycheck to paycheck is worried about being homeless right now, not in 40 years.
Tbf a 10k bimmer is almost guaranteed to be a money pit so yes buy the stripped down vw with a warranty instead. Seriously lol.
Best route honestly if you need that brand life is a 10k lexus/acura.
Yes obviously.
But a person with more money is in a much better position to not have to live paycheck to paycheck. It is easier for someone with more money, say $100,000, to not have to live paycheck to paycheck by proper budgeting than someone making $40,000 in the same city.
People who are living paycheck to paycheck in the literal sense of the word could also be homeless extremely quick even if they have a 401k at the job they just lost...
Like that $200 a month or whatever going to your 401k ultimately doesn't mean much when the income steam is cut off entirely.
Personally yeah I count retirement as savings. It's one type of saving, at least.
The burden of saving for our retirement shifted from our employers to us, the individuals. In that sense, it's expected in this country that people need to be saving for their retirement, therefore a 401k is savings.
It being not liquid doesn't make it not savings. It means it's not an easily liquidified savings account.
Indeed there needs to be some extra consideration for vehicles. I think I am just particularly sensitive to vehicles because it's basically the most expensive depreciable asset a typical person would buy. It's not a home where it generally appreciates over time. As such, I feel that long-term stability and boring cars that require least maintenance are the way to go for vehicles. So yeah, buying say a used and well maintained Accord, Corolla or their subcompact counterparts are the way to go for your average urban/suburban person. The 0% financing deals I've seen in dealerships only work for new cars and not used cars, so that is also a consideration to think about when buying a used car as it can end up costing way more than the sticker price if you let interest gets out of control.