Living paycheck to paycheck is disturbingly common • Hacker News Board

Re: Living paycheck to paycheck is disturbingly common

#141

Post by tombert » Mon, Dec 31, 2018, 7:52 PM UTC

2016 was probably the worst year of my life, and not for just political reasons.

I had gotten to a point where I had been living paycheck-to-paycheck for about two years, and the company I worked for went bankrupt due to the CEO running away with all of the money that was supposed to be used for our paychecks (yes, really), leaving me jobless and broke.

I wasn't good at saving money, and I got debt collectors coming for back credit card debt, and a lawsuit from my landlord because I wasn't able to pay the rent, all culminating with me bursting into tears at the airport because I realized I didn't have enough credit left on any of my cards to pay for the hotel pre-bill for the interview I was flying to at Amazon.

Fortunately I was able to find another job, and my wife and I set some ground rules about saving money and paying off debts, and since then I've been able to save enough money to have a down payment on a house, and even though I still use credit cards, I treat them like glorified debit cards, and rarely keep the balance higher than $200.

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It's easy to get into an unmanageable cycle of debt when you live paycheck to paycheck; fortunately this happened early enough in my life to where I was able to learn my lessons early enough to keep a buffer of money in case the worst happens. I feel bad for people when this stuff happens, since I wouldn't wish that level of depression on anyone.

Re: Living paycheck to paycheck is disturbingly common

#142

Post by in_cahoots » Mon, Dec 31, 2018, 7:53 PM UTC

sys_64738 wrote: post #128

Show us your incoming wage and outgoings then we can discuss whether you are living paycheck to paycheck. Living paycheck to paycheck means your needs are not being met rather than your wants. Cable (free OTA), eating out at all (pack sandwiches), heat (wear more clothing), etc, are all things which need to be cut if you think your outgoings are greater than income.

In many parts of the country, cutting heat is impossible. Disregarding the fact that it’s nearly impossible to find enough clothing to stay warm long-term when the temperature drops below 20 degrees Fahrenheit or so, pipes will start to burst when the indoor temperature falls below freezing as well.

Re: Living paycheck to paycheck is disturbingly common

#143

Post by sokoloff » Mon, Dec 31, 2018, 7:55 PM UTC

SmirkingRevenge wrote: post #123

vailprogrammer wrote: post #82

Earlier quoted context omitted.

I like it. How would the bank make its money? The standard exploitative practices of other banks, just with smaller fees ($5 overdraft fee instead of $37?, or lower interest rate spreads?) or just charge $50 a year, and do away with those fees? Would that lead to too many people taking advantage of it?

To be honest, I don't know what the business model would be, but it seems like it should be in the banks long-term best interest to create rich, prosperous people with invest-able funds. They are literally in a position to create their own wealthy customer base. What would it actually do for a big bank, if it were the exception rather than the rule, that their low/middle-class account holders had enough savings to co…

Banks make a lot of money (averaging a bit over 12¢ per dollar lent) on credit cards. It would likely be overall disadvantageous for them to pull people out of credit card debt, out of debt in general, and to eliminate overdraft situations.

Re: Living paycheck to paycheck is disturbingly common

#144

Post by wtracy » Mon, Dec 31, 2018, 8:01 PM UTC

crankylinuxuser wrote: post #76

kurthr wrote: post #58

Earlier quoted context omitted.

Which is why without tight controls on lending/debt Universal Basic Income will just lead to similarly desperate outcomes subsidized by the state.

UBI was only a small-ish step to a moneyless post-scarcity economy. When rent is taken care of (cause there isn't rent), along with food, water, electricity, communication and more, what is there to 'buy'?

There are people who spend thousands of dollars on Candy Crush. There will always be something more.

Also, I have to point out, if you had made that list a hundred years ago, electricity wouldn't have been on it. Luxuries have a way of becoming necessities.

Re: Living paycheck to paycheck is disturbingly common

#145

Post by diminoten » Mon, Dec 31, 2018, 8:02 PM UTC

zeta0134 wrote: post #104

One of the simplest and most effective things I did recently was to split my bank account into two checking accounts, and one savings account. I carry two debit cards with me that are visually distinct. One is for day to day purchases, and the other is meant for bills and the occasional unusual expense, like maybe tools for a surprise home repair. Each time I get paid (every two weeks) I have my employer deposit the…

By not making use of credit cards, you're losing out on thousands of dollars every year.

Re: Living paycheck to paycheck is disturbingly common

#146

Post by pbhjpbhj » Mon, Dec 31, 2018, 8:02 PM UTC

zozbot123 wrote: post #105

kenmicklas wrote: post #93

Earlier quoted context omitted.

I think the bigger issue than lending is that if it's not funded with a land value tax then all the increase in income will be eaten up in rent.

The opposite is the case. High rent is a localized problem (mostly found in relatively dense cities) and UBI would go a lot farther in a low-cost-of-living area where rents are low as well. So, people who have no use for living in the city (not hyper-productive or anything) would gradually opt to spread out and rents would fall.

High rent is localised? The whole of the UK has high rent AFAICT, our very poor city has high rent.

Rental means paying the costs of property plus paying profit to someone who is already well off enough to front some capital (or at least to get a mortgage) plus paying profits for the bank ... how could renting ever be reasonable priced in a system that requires those without capital to pay those with capital just because those with money already have enough money.

Re: Living paycheck to paycheck is disturbingly common

#147

Post by diminoten » Mon, Dec 31, 2018, 8:03 PM UTC

sys_64738 wrote: post #128

Show us your incoming wage and outgoings then we can discuss whether you are living paycheck to paycheck. Living paycheck to paycheck means your needs are not being met rather than your wants. Cable (free OTA), eating out at all (pack sandwiches), heat (wear more clothing), etc, are all things which need to be cut if you think your outgoings are greater than income.

That is not what "living paycheck to paycheck" means. It merely means having insufficient savings to continue to pay bills should a paycheck not arrive each pay period.

Re: Living paycheck to paycheck is disturbingly common

#148

Post by HarryHirsch » Mon, Dec 31, 2018, 8:03 PM UTC

moorhosj wrote: post #38

leoedin wrote: post #27

Earlier quoted context omitted.

I think the very fact that people in wildly different circumstances are living paycheck to paycheck is a huge flag that this isn't as simple a problem as "they don't get paid enough". Income and expenses are intricately linked by psychology. It's almost irrelevant what your paycheck is, if you're prone to this problem then somehow expenses will always rise to meet it. If expenses weren't actually determined by payche…

Huge difference between living paycheck to paycheck because you struggle to afford basic necessities and living paycheck to paycheck because you took out too large of a mortgage. In one case you have an asset to sell if needed.

The trouble is, in America the bigger mortgage often comes with a better school district.

Re: Living paycheck to paycheck is disturbingly common

#149

Post by diminoten » Mon, Dec 31, 2018, 8:04 PM UTC

Spooky23 wrote: post #53

There is a way out. Use cash. My wife and I struggled with this, we do well and found our expenses increasing with our income. Our solution was to take a small windfall (tax refund) to bootstrap two months of basic expenses, and dump money from direct deposit into a specific account. We did that to get current. That eliminated many dopey expenses (Starbucks, shiny things in the grocery, etc). It’s harder to spend mon…

This just sounds penny wise, pound foolish. Starbucks isn't breaking the bank, something larger is.

And your credit card policy hurts your family, to the tune of thousands of dollars every year.

Re: Living paycheck to paycheck is disturbingly common

#150

Post by dragonwriter » Mon, Dec 31, 2018, 8:10 PM UTC

HarryHirsch wrote: post #148

moorhosj wrote: post #38

Earlier quoted context omitted.

Huge difference between living paycheck to paycheck because you struggle to afford basic necessities and living paycheck to paycheck because you took out too large of a mortgage. In one case you have an asset to sell if needed.

The trouble is, in America the bigger mortgage often comes with a better school district.

> The trouble is, in America the bigger mortgage often comes with a better school district.

That's because our metric for school and school district quality largely is a measure of effects of socioeconomic status of the students, not anything the schools actually produce. So, yes, the schools in areas that have a higher buy-in cost have better marks, because they have on-average students better set-up for success.

That doesn't mean the students in that district, if individually moved to a different district, would do worse, it just means that the students who would do worse independent of district are lesd likely to have parents that can afford to live in the “better” district.