We make 6 figures and live paycheck to paycheck... but only because I am socking away so much money into stock purchases, 401k, HSA, etc.
This isn't a very good metric for determining financial health.
Despite rising wages, 61% of Americans are still living paycheck to paycheck
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Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck
#42> Even among those earning six figures, 42% said they were living paycheck to paycheck, the survey of more than 3,000 adults found. I know there are areas with extremely HCOL, inflation, housing crisis... However, sometimes I do wonder though what some people's budgets are like that they are literally unable to save any money (paycheck to paycheck) making >$100k. Do we know what part lack of financial literacy or sim…
There’s a difference between “unable” and “not doing”. I’ve been in this position from time to time, and it always came down to making expensive choices or recovering from an unexpected necessary large expense. I might have a few financial regrets but when it comes down to it, spending as much as I made was always just a choice I could have changed at any time.
There are those people who win the lottery and spend it all on expensive women and cars. Or football players who end up broke.
I have very little empathy for people making 6 figures though.
Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck
#43This measure strikes me as less informative than a measure of how much of Americans' spending is discretionary (i.e., not on "essentials" like rent, food, utilities, internet, transportation, clothing, etc.).
One tricky piece, of course, is that "food", "transportation", "clothing" can include both discretionary and non-discretionary spending. (As in, you need to eat, but you don't need to get takeout every day.)
Given that unemployment rates are at historical lows, support for short-term unemployment is relatively generous, and social security exists -- perhaps we should be unsurprised that most people are living "paycheck to paycheck".
Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck
#44> Even among those earning six figures, 42% said they were living paycheck to paycheck, the survey of more than 3,000 adults found. I know there are areas with extremely HCOL, inflation, housing crisis... However, sometimes I do wonder though what some people's budgets are like that they are literally unable to save any money (paycheck to paycheck) making >$100k. Do we know what part lack of financial literacy or sim…
I'm the only one from my immediate family that 'escaped' the poverty so about half of my gross income goes for healthcare and living expenses for my parents and sometimes siblings depending. I won't be taking questions or entertaining discussions about the appropriateness of this arrangement. But it's not that rare and it's why I don't meaningfully save.
I don't see a problem with this... I can't imagine not taking care of your family.
Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck
#45> Even among those earning six figures, 42% said they were living paycheck to paycheck, the survey of more than 3,000 adults found. I know there are areas with extremely HCOL, inflation, housing crisis... However, sometimes I do wonder though what some people's budgets are like that they are literally unable to save any money (paycheck to paycheck) making >$100k. Do we know what part lack of financial literacy or sim…
Have you lived in NYC or SF?
Yes, it's doable for nearly everyone to stash some amount of money away, sub-$1k or whatever.
However, if you're in the zone b/t $100k/yr and say $250k/yr, it's entirely possible to have your act together financially, and not be able to save a relevant amount due to the cost of basically existing, responsible student loans and a simple social life. The amount of money you're able to save vs the general cost of living means that your small savings is basically meaningless if something happens.
A normal lifestyle can turn into being the walking dead financially. You make a lot on paper, but one wrong event knocks you out. This is why '08 was especially ugly for NYC finance types, despite being firmly upper middle class.
Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck
#46We make 6 figures and live paycheck to paycheck... but only because I am socking away so much money into stock purchases, 401k, HSA, etc. This isn't a very good metric for determining financial health.
If you have a significant rate of positive saving/investment from income surplus to current consumption, you are not living “paycheck to paycheck”.
Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck
#47> Even among those earning six figures, 42% said they were living paycheck to paycheck, the survey of more than 3,000 adults found. I know there are areas with extremely HCOL, inflation, housing crisis... However, sometimes I do wonder though what some people's budgets are like that they are literally unable to save any money (paycheck to paycheck) making >$100k. Do we know what part lack of financial literacy or sim…
What I find funny about comments like these is that there is clearly a subtle criticism of the very behavior that ultimately pays many of our salaries. People are encouraged to over spend at ever instance of their life. You go to buy a house, the mortgage company will try to get you spend to the limit of your ability. Every service out there today offers 0% loans to encourage consumer spending so that you can live ou…
I tried really hard not to come over as critical. I'm genuinely curious as someone that doesn't live in the US and is financially rather conservative. It wasn't meant as a value judgement at all.
Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck
#48Earlier quoted context omitted.
I agree for the general population. But shouldn't a job paying 6 figures have decent insurance? I have two dependents with major health issues, hitting out of pocket max every year. Still I am able to save for retirement and not live paycheck to paycheck. I do not earn 6 figures.
Even with decent insurance, a chronic heath issue can easily result in bankruptcy or having to live paycheck to paycheck, especially if you trip up on any of the landmines like going "out of network" or having a procedure that your insurance decides they don't want to pay for. The system is set up to extract the maximum amount of money from the patient they think they can get away with. And don't even get me started…
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Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck
#49(perhaps) unpopular observation: as tough as the economy is, most people are just bad with money. I know so many people who would rather spend money on impulse than save it. It's not even necessarily their fault - why save if house prices are still increasing faster than you can catch up with? Is it any wonder young people generally just want to splash out on whatever keeps them happy?
Re: Despite rising wages, 61% of Americans are still living paycheck to paycheck
#50> Even among those earning six figures, 42% said they were living paycheck to paycheck, the survey of more than 3,000 adults found. I know there are areas with extremely HCOL, inflation, housing crisis... However, sometimes I do wonder though what some people's budgets are like that they are literally unable to save any money (paycheck to paycheck) making >$100k. Do we know what part lack of financial literacy or sim…
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