Do you live paycheck to paycheck? 61% of Americans now do

[ProfJohn]

So according to some poll I read about on FT.com 61 percent of Americans live from paycheck to paycheck. Up from 49 percent in in 2008.

How many of you consider yourself as living from paycheck to paycheck??



Myself: prior to starting the house buying process I had a month or two worth of salary in saving so I wouldn't consider myself living check to check.

Once my new home owner rebate check hits the bank I'll be back to that point.

It is nice being able to pay the bills on time and not worrying about whether I have enough money in my account for this bill or that bill.

Of course if I lost my job I'd be in a world of trouble rather fast, but I am not worried about that happening.

 

[IndyColtsFan]

A lot of people can't live within their means and charge their lives away and I'd guess those are the majority of the people in the survey. Obviously, in this economy, many also have lost their jobs and have had to either settle for significantly lower-paying jobs or no jobs at all, so that probably greatly contributes to the increase from 2008 to now.

As for me -- plenty of savings to survive several years without a job if necessary.

 

[XZeroII]

I don't feel good unless I have one year of savings. This means that if I lost my job, I could survive for a year with no additional income.

 

[theeedude]

So according to some poll I read about on FT.com 61 percent of Americans live from paycheck to paycheck. Up from 49 percent in in 2008.

How many of you consider yourself as living from paycheck to paycheck??



Myself: prior to starting the house buying process I had a month or two worth of salary in saving so I wouldn't consider myself living check to check.

Once my new home owner rebate check hits the bank I'll be back to that point.

It is nice being able to pay the bills on time and not worrying about whether I have enough money in my account for this bill or that bill.

Of course if I lost my job I'd be in a world of trouble rather fast, but I am not worried about that happening.

So basically you need a government handout in form of a rebate check to get you to a point where you aren't living paycheck to paycheck?

 

[ProfJohn]

So basically you need a government handout in form of a rebate check to get you to a point where you aren't living paycheck to paycheck?

Did you read my post? The part where I said BEFORE I started building a house I had no problems. It cost me a LOT of money to buy my house.

I was going to save for a couple of years and then buy a house, but the government decided to offer people like me $8000 to buy a house now so I jumped at that chance like many others.

So once I get that check I will be able to get my saving account back to the level it was before I started building my beautiful house.

 

[Fingolfin269]

This is probably a dumb question but what is considered to be 'paycheck to paycheck'? Something as simple as saying if I didn't get paid one month could I still pay my bills?

I should clarify that I am wondering what *you* think of when you hear paycheck to paycheck? Personally I could survive at least a month if for some reason I didn't get paid next month. But not much longer without busting into longer-term savings.

 

[Engineer]

That's what happens when you go an entire decade with declining wages for both college and high school grads (after inflation) for the first time since that stat was started. The first generation in a long time (ever?) that will have a declining living standard in the US. Pretty sad.

 

[Ronstang]

Not now or ever in my life. Fiscal responsibility is my pet peeve. I have always considered $2000 the zero level of my checking account. I don't feel comfortable without at least 1 year of living expenses in liquid form. Right now I have at least 3-4 years of living expenses in one checking account. Time to transfer some of that actually.

 

[IndyColtsFan]

I should clarify that I am wondering what *you* think of when you hear paycheck to paycheck? Personally I could survive at least a month if for some reason I didn't get paid next month. But not much longer without busting into longer-term savings.

Well I think it ALL comes into play. You should have some highly liquid savings to live on (I think the "experts" recommend 6 months worth; that is way too low IMO) and then semi-liquid assets you can cash in on in an extreme emergency (401k). Some huge percentage of Americans have less than $10K in their 401Ks as well, which is a travesty.

 

[ProfJohn]

This is probably a dumb question but what is considered to be 'paycheck to paycheck'? Something as simple as saying if I didn't get paid one month could I still pay my bills?

I should clarify that I am wondering what *you* think of when you hear paycheck to paycheck? Personally I could survive at least a month if for some reason I didn't get paid next month. But not much longer without busting into longer-term savings.

I would say that paycheck to paycheck implies that you can't pay a bill until the next check arrives.

I think it has as much to do with the state of the economy as it has to do with the amount of debt people have pilled up over the last decade or two.

 

[Engineer]

I would say that paycheck to paycheck implies that you can't pay a bill until the next check arrives.

I think it has as much to do with the state of the economy as it has to do with the amount of debt people have pilled up over the last decade or two.

Probably so, especially the housing debt. On a side note, I heard (radio) that credit card debt is at an 8 year low right now.

 

[Thump553]

Neither my wife or I have received a paycheck (as such) in the last eight years or so. We are both self-employed-true capitalists that will have absolutely nothing to do with the present-day GOP or teabaggers.

 

[WhipperSnapper]

Many Americans aren't receiving any checks at all.

 

[WhipperSnapper]

A lot of people can't live within their means and charge their lives away and I'd guess those are the majority of the people in the survey.

It might be more accurate to characterize the problem as:

"A lot of people do work poverty-wage jobs that barely allow them to keep their heads above water because more substantive, higher-paying jobs do not exist in sufficient quantity for them, and I'd guess they constitute a large number of the people in the survey."

 

[IndyColtsFan]

It might be more accurate to characterize the problem as:

"A lot of people do work poverty-wage jobs that barely allow them to keep their heads above water because more substantive, higher-paying jobs do not exist in sufficient quantity for them, and I'd guess they constitute a large number of the people in the survey."

That is part of it, as I alluded to in my earlier post which wasn't quoted; however, I stand by my point that Americans are in debt up to their eyebrows due to having no financial discipline. That's great if CC debt is at an 8 year low; that still doesn't necessarily mean it isn't a problem either. I saw people who were insanely ridiculous with their money AND they had high paying jobs.

 

[Engineer]

That is part of it, as I alluded to in my earlier post which wasn't quoted; however, I stand by my point that Americans are in debt up to their eyebrows due to having no financial discipline. That's great if CC debt is at an 8 year low; that still doesn't necessarily mean it isn't a problem either. I saw people who were insanely ridiculous with their money AND they had high paying jobs.

I understand that fully. Was working a job this past weekend and the maintenance man there, who makes over $30 per hour and had huge numbers of overtime during his first 19 years on the job, had to take a second job at Walmart because his overtime was removed. Talk about wow.

 

[IndyColtsFan]

One guy I knew bought 3 new cars -- in the same month. These weren't all Aveos either -- one was a 2007 Yukon Denali, another was a 2007 Miata, and another was a 2007 Ford Escape (this was in 2007). There were two people at his house. AFAIK, the only thing he traded in was his 2003 Yukon which I believe he still owed money on. Nearly every Monday, the guy would come in and tell us about his weekend shopping spree at Fry's the previous day. This guy bought himself 2 new desktops, a laptop, a UMPC, a netbook, and a Mac as well. Think that's bad? He did the same for his wife too. He was always buying new TVs, electronics, you name it. He bought so much crap that he literally had a room where all his new purchases sat, boxed up. Yes, you read that right -- he bought so much shit that he didn't even have time to open it all and set it up! And I haven't even mentioned when he would go to shows and come back bragging that he spent $5K or $6K on jewelry for his wife.

His wife worked and made good money, but she had to quit for health reasons so that was $50K or $60K of income gone. Do you think that caused him to change course? Nope! The computers mentioned above were bought AFTER she quit, as were several of the electronics.

You can guess where this is headed. He finally had to declare bankruptcy and told me how his lawyer ripped him a new one for his incredible irresponsibility and poor judgment. He had to give up some of this cars and toys too. This guy was beyond stupid with his money and the lawyer was probably afraid the judge would tell them both to get screwed and pay up. Fortunately(?) for the guy, the judge let him declare.

I am sure this guy's story is more typical than anyone would want to imagine.

 

[ProfJohn]

I think your example is a little extreme.

I think most stories are more like someone buying an explorer when they should have got a focus. A four bedroom house in the nice part of town when they should have got a town home or smaller house. Taking out a loan for that new kitchen when they should have saved up and done a cheaper remodel.

Also, what really tends to kill people is losing income. Had it happen to me 10+ years ago. Lost about 50% of my income and all those bills I had been paying on time for years came crashing down on me.

 

[IndyColtsFan]

I think your example is a little extreme.

I certainly HOPE it is an extreme case, but to be honest, I've seen several others who have exercised incredibly poor financial judgment and found themselves in deep shit because of it.

Obviously a loss of income affects anyone who experiences it, even if you have paid your bills on time and have savings built up. In the cases I've seen that generally hasn't been the issue, however.

My wife sometimes gets angry at me because she thinks I am TOO cheap; I try to make her understand that we need to be in the mindset that we could lose our jobs any time and need to plan accordingly and have savings to back us up.

 

[VinylxScratches]

I got about 20k saved up... with about 9,000 in debt. I still don't feel comfortable.

 

[kranky]

I'm thankful I have a cushion set aside.

I do get frustrated with people who cling to a belief that being in debt is "just the way it is". Always have a car payment, always paying less than the minimum on credit cards, only concerned with "how much a month" something costs.

 

[JS80]

After 401k, IRA, and socking away money into my savings, yes I am paycheck to paycheck.

 

[UberNeuman]

Did you read my post? The part where I said BEFORE I started building a house I had no problems. It cost me a LOT of money to buy my house.

I was going to save for a couple of years and then buy a house, but the government decided to offer people like me $8000 to buy a house now so I jumped at that chance like many others.

So once I get that check I will be able to get my saving account back to the level it was before I started building my beautiful house.

Hmm.... how hypocritical......

 

[Jeff7]

Nope, never have.
And if I'd lose my job tomorrow, I'd be ok for nearly a year, assuming $0 in unemployment checks.

 

[Svnla]

I always have some liquid assets to cover my behind just in case. If I lose my job tomorrow and nothing comes in, I can survive for at least a year or two.