Living paycheck to paycheck is disturbingly common • Hacker News Board

Re: Living paycheck to paycheck is disturbingly common

#271

Post by chiph » Tue, Jan 01, 2019, 1:57 AM UTC

kaybe wrote: post #231

matis140 wrote: post #107

Earlier quoted context omitted.

Another change, but one much harder to manage is that many of the products people buy today have no value left after 2-4 years and some both have no value after 2-4 years and do things degrading their performance forcing you to again purchase an expensive item that does nothing to build wealth. Vehicles, electronics, home appliances all sit at something like a max of 8-11 years of use and loose 30-50% of their value…

Old home appliances are basically free. If you don't care too much for recency and efficiency, you can just pick one up from a neighbor here. For example, the city website where you can register to get large trash items taken away links to a platform where people post what they want to give away. It's full of old furniture and appliances, and only costs you some time and transport method. I'm surprised sometimes, rea…

There's a bunch of videos on YouTube of how to repair washing machines, clothes dryers and dishwashers (repairing refrigerators usually needs special tools & training).

A good example is the cast aluminum bracket supporting the drum in modern front-loading washers. It commonly corrodes and breaks, and is often the reason why the machines get replaced. It's about a $120 part that will give your $1500 washer another 3 years of life -- as long as you're willing to put some free labor in.

https://www.youtube.com/watch?v=iFXp2X99mQs

Re: Living paycheck to paycheck is disturbingly common

#272

Post by darpa_escapee » Tue, Jan 01, 2019, 2:01 AM UTC

dan-robertson wrote: post #267

darpa_escapee wrote: post #244

Earlier quoted context omitted.

> At least here the problem isn't financial illiteracy. The problem is that they (a) make way too little to live off and (b) worker protections have eroded past any sane point. This is the crux of the reality that many face, yet is often ignored by pundits. Raving about budgeting is missing the point: you can't budget what isn't there in the first place. When there is something left over to budget, saving $20-$50 a m…

I agree that it won’t help with that but perhaps that isn’t the point. Saving $20-$50 per month can help with situations along the lines of “some uncommon thing has gone wrong and you need $400 to fix it,” for example a car malfunction (because transport is required to get to work, this is urgent)

Yes, it can help with small expenses. However, each year that passes those expenses become more expensive while take home compensation stays at fixed dollar amount that isn't adjusted for inflation.

For example, medical expenses can, and do, bankrupt people. No amount of saving $20 each month will pay off many medical bills. It's the reason that medical expenses are the top cause of bankruptcy, followed by job loss.

The problem is that budgeting is portrayed as a panacea to poverty or an altar on which the poor are chastised for their suffering.

Re: Living paycheck to paycheck is disturbingly common

#273

Post by NightlyDev » Tue, Jan 01, 2019, 2:03 AM UTC

SmirkingRevenge wrote: post #28

As someone who didn't learn the very basics of personal finance at the optimal point in life, I feel like it should be part of our standardized education. I'd like to think that would make things at least marginally better. Another thing I'd love to see, would be for banks to fundamentally reorient themselves to be their customer's advocates/financial guardians, instead of being yet another party encouraging people t…

Banks already do that. Don't they? At least that is the norm in Norway.

Financial advisors are required to get an overview of my finances, financial competence, what goals I have and what my risk tolerance is. Customers also should have time to think about decisions.

Banks financial advisors are basically salespeople for their own services, but that's well known and the service is free.

Re: Living paycheck to paycheck is disturbingly common

#274

Post by NightlyDev » Tue, Jan 01, 2019, 2:12 AM UTC

alex_duf wrote: post #90

49531 wrote: post #57

Earlier quoted context omitted.

You'll never have banks working in consumers self interest as long as they are profit driven organizations. Public banks tend to work better for actual sensible banking.

Unless you pay upfront for the service rather than having a free bank account. If your economical model is to take advantage of people going overdraft you can be certain the bank won't try to help clients. If the bank can make more money by having clients with more money that would probably work better, now I'm not sure how that would scale.

Banks does make a lot of money if the customer spends his money or stores his money using the services of the bank.

Re: Living paycheck to paycheck is disturbingly common

#275

Post by magicalhippo » Tue, Jan 01, 2019, 2:15 AM UTC

SmirkingRevenge wrote: post #28

As someone who didn't learn the very basics of personal finance at the optimal point in life, I feel like it should be part of our standardized education. I'd like to think that would make things at least marginally better. Another thing I'd love to see, would be for banks to fundamentally reorient themselves to be their customer's advocates/financial guardians, instead of being yet another party encouraging people t…

> Another thing I'd love to see, would be for banks to fundamentally reorient themselves to be their customer's advocates/financial guardians, instead of being yet another party encouraging people to borrow more than they ought to.

The largest bank in Norway has introduced some tools to help people make sense of their financial situation, and to help them save up money.

First and foremost is a budgeting tool, where they show you where money came from and where it went for each month. It has a lot of preset filters for labeling your transactions, and you can add your own. Top level view is "salary, rent, food" and similar, and then you can drill down a few levels. I found it gave a nice overview and allowed me to quickly pinpoint some small but frequent silly expenses I could cut down on.

They've also introduced a "saving game" of sorts, where you can set your own saving goal, like $2000 for summer vacation or whatever, and whenever you use your debit card they'll transfer a configured percentage of whatever you're purchasing into your savings account. So for example if I buy a coffee for $3, they add $0.3 to my savings account, deducting $3.3 from my main account. They've made some easy way to keep track of your goal etc.

They also added a special savings account where you get much higher rate than a regular savings account, with the twist that you can only deposit money into it using a monthly auto transfer (maybe also the above "game", can't recall).

The budget tool I found nice, the saving tools I don't really need, but I see how it could be helpful to some to make it easier to save.

Of course the above won't work miracles if the income simply won't cover required expenses...

Re: Living paycheck to paycheck is disturbingly common

#276

Post by NightlyDev » Tue, Jan 01, 2019, 2:24 AM UTC

Living paycheck to paycheck is common most places in the world. It's definetly a choice a lot of people make.

Re: Living paycheck to paycheck is disturbingly common

#277

Post by gamma-male » Tue, Jan 01, 2019, 2:42 AM UTC

myself248 wrote: post #265

wutbrodo wrote: post #99

Earlier quoted context omitted.

I'm not sure lack of healthcare and low wages _is_ the main issue[1]. As the parent comment points out, it seems like that would lead to a pretty different pattern of this phenomenon. It seems to me that there's a couple broad categories that can lead to paycheck-to-paycheck living: 1) Poverty, at the level where spending on a reasonable floor of basics (food, shelter, education, leisure) leaves little for savings. T…

> at percentile X would substantially improve their financial security if they spent as much as percentile X-10 This is spot-on. It's worked for me -- I didn't have a solid handle on my finances when I moved out of my parents' place, so I lowballed and found a place I knew I could afford even with a pretty pessimistic view of financial discipline. Nine years later I'm living in the same place, and I've gotten a raise…

Mmm... I'm subscribed to Netflix, to kurzgesagt on Patreon and to duchinese and wordswing on the app store just because I support them. It's 50$/month and I think that's a fine amount to spend if you have the money in order to encourage more of these things.

Re: Living paycheck to paycheck is disturbingly common

#278

Post by NightlyDev » Tue, Jan 01, 2019, 2:42 AM UTC

Johnny555 wrote: post #129

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…

Carrying a debit card (at least by the american definition of "debit card", other countries may have more sane CC security) is a risk in itself -- if you lose the card (or just the number), then your bank account can be wiped out before you can stop it, then you'll start bouncing checks. And since you have a card for each account, they can wipe out your savings too, making it harder to replenish your checking account…

Debit cards are quite secure, at least here, but we're many years ahead of the US when it comes to credit/debit cards.

The magnetic strip is never used(haven't been used the last 10 years, at least), a PIN is always required at PoS and for many issuers an electronic multistep authentication process is required to order anything online with the card.

And if something still where to go wrong then you'll get your money back.

Re: Living paycheck to paycheck is disturbingly common

#279

Post by Johnny555 » Tue, Jan 01, 2019, 2:46 AM UTC

NightlyDev wrote: post #278

Johnny555 wrote: post #129

Earlier quoted context omitted.

Carrying a debit card (at least by the american definition of "debit card", other countries may have more sane CC security) is a risk in itself -- if you lose the card (or just the number), then your bank account can be wiped out before you can stop it, then you'll start bouncing checks. And since you have a card for each account, they can wipe out your savings too, making it harder to replenish your checking account…

Debit cards are quite secure, at least here, but we're many years ahead of the US when it comes to credit/debit cards. The magnetic strip is never used(haven't been used the last 10 years, at least), a PIN is always required at PoS and for many issuers an electronic multistep authentication process is required to order anything online with the card. And if something still where to go wrong then you'll get your money…

And if something still where to go wrong then you'll get your money back.

Well... most of the time, unless the bank claims it was your fault because chip-and-pin is infallible... then you have to fight the bank for your money.

https://www.thisismoney.co.uk/money/saving/article-2215223/V...

Re: Living paycheck to paycheck is disturbingly common

#280

Post by AnimalMuppet » Tue, Jan 01, 2019, 2:49 AM UTC

Aeolun wrote: post #268

uuwp wrote: post #198

Earlier quoted context omitted.

I actually think capitalism is the problem. It's the best form we know to organize a society, but it has the serious problem when money tend to stick or gravitate towards bigger chunks of money. I'm making well over 300k and can afford a decent house that I'd have to pay off my entire life. What if I had 30M and was too lazy to start a business? I would just buy 30-40 nice houses in my area and would rent them. 10 ye…

If you make 300k you need to either be fairly old, or buy a ridiculously expensive place to pay it off for the rest of your life.

Or be buying in a ridiculously expensive place - NYC or the Bay Area.