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Living paycheck to paycheck is disturbingly common

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Re: Living paycheck to paycheck is disturbingly common

#161

Post by tjr225 »

wccrawford wrote: post #13
tjr225 wrote: post #2

"They work in big cities and rural towns. They’ve tried to save — but rent, child care, student loans and medical bills get in the way." Yikes. I'm not exactly living paycheck to paycheck, but I can relate to this. It's really funny - my wife and I make quite a bit of money - whatever twisted form of capitalism we currently live in has been designed in such a way to extract most of it away from us. One begins to wond…

It's human psychology. Below a certain level, your mind will simply talk itself into spending your available money to make you happy. You don't need that car. A car half the price would have been plenty good enough. But you did it anyhow. You don't need fancy breakfast cereal that costs twice what the generic stuff at Aldi costs. You don't need all those electronics and toys. You don't need to eat out that much. If y…

There are a lot of assumptions about my decisions and my lifestyle in response to my original post. I am not angry at my situation, rather, I worry about my younger brother, and all of the other people out there who have yet to get as lucky as I have.

Re: Living paycheck to paycheck is disturbingly common

#162

Post by nunez »

mac01021 wrote: post #124
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…

So, when you log into the Bank of America website, you want to be greeted every time with things like the following? "Dude, maybe you should sell this car that you're paying $450 per month for and get a $7000 used car." "Did you know that between starbucks and happy hour you spend an average of $120 per week, and that amounts to 10% of your take-home pay?" "You currently spend $2500 per month on rent. If you downsize…

Banks actually do offer this service, though it's not front-and-center as you joked. Simple Bank was built around this premise. Chase Bank has an Insights feature that tells you how you're spending your money and offers recommendations.

Re: Living paycheck to paycheck is disturbingly common

#163

Post by lotsofpulp »

metabagel wrote: post #157
lotsofpulp wrote: post #140

Earlier quoted context omitted.

There is plenty of opportunity to make money in 20s though, so I can only blame a lack of research (assuming one knows how to read English and has access to the internet). If you’re smart, you can go the MD or STEM route and end up in tech or finance, or if you can get into a target law school that feed into well paying NYC/SF firms. If you can’t do that, then electricians, plumbers, and mechanics make a decent amoun…

"If you’re smart, you can go the MD or STEM route and end up in tech or finance" These typically entail large student loans, which make it difficult to save much in one's 20s. "If you can’t do that, then electricians, plumbers, and mechanics make a decent amount starting very young." These are good options, but realistically there are only so many of these jobs to go around. They also require vocational training, whi…

That’s my point, if you’re giving up your earnings in your 20s, you better end up an MD, or FAANG, or a high paying finance/law firms. If that isn’t your trajectory, and you don’t have a trust fund, then you should expect a tough cash flow situation, especially if you’re accumulating debt, and giving up $50k+ per year for 8 years.

Unfortunately, I don’t know the situation the trades are in from firsthand experience, but from the contractors I hire, they are constantly jacking up prices due to lack of licensed workers, so even if it’s not sufficient pay to entice enough people to do the job at this moment, I would say the future looks good for them.

If that’s not doable, then unfortunately SoCal, and CA in general, probably isn’t an economical place to live in the long term. Just like living in Manhattan or London or SF is a luxury, so is a desirable location like CA.

Edit: I’m not saying this is ideal, but that is the advice I would give to someone at the start of their life deciding on whether or not to live in SoCal, even if they grew up there. Perhaps the situation will reverse once all the people who are willing to suffer through the living conditions that lower paid positions offer, but I don’t see the situation bettering itself before that happens and the supply curve for labor shifts enough to force living wages.

Re: Living paycheck to paycheck is disturbingly common

#164

Post by zozbot123 »

matis140 wrote: post #107
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 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…

> I have a refrigerator from the 70's that works great

That refrigerator had a real cost (adjusted for inflation) that's just as high as "heavy-duty", "pro" units that you can buy today and that will last you just as long (adjusting for survival bias)

Re: Living paycheck to paycheck is disturbingly common

#165

Post by nunez »

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…

> 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.

I agree, though I fear that this would only affect people that care enough. It's hard enough to incentivize students to get their work in on time, let alone learn how to balance a budget. Also, our society links spending money with personal self-image. (Buy this Lexus so that your kids love you. Buy this Armani cologne so that you can have weird sex with hot models in anonymous oceans. Etc.) Separating the two would require much more than personal finance classes.

> 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.

Banks offer this service if your balances are high enough. Chase Private Client (and/or Sapphire Banking; not sure if they are the same now) assign you a personal banker that can help you maintain and improve your financial health, for example. JP Morgan Private Bank assigns you an entire (shared) team for this purpose; they can even act as middlemen to authorize purchases for you if the amounts are high enough. The former (CPC) requires a minimum balance of $75,000; the latter requires $1-10M (they don't publish their minimum requirements for this).

It sucks that you have to be financially stable for banks to help you, but it would be unprofitable for banks to offer this service to everyone with an account (have you ever waited for a teller during peak hours?). Banks are starting to use "machine-learning" based platforms to provide generalized advice platforms, though, so that people can have some resources to help them achieve financial well-being. Nowhere near enough, but it's something.

Re: Living paycheck to paycheck is disturbingly common

#166

Post by max76 »

wtracy wrote: post #144
crankylinuxuser wrote: post #76

Earlier quoted context omitted.

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.

If there wasn't a need to buy rent, food, transportation, electrity, and communication I wonder if Candy Crush would have micro transactions.

Re: Living paycheck to paycheck is disturbingly common

#168

Post by nunez »

sokoloff wrote: post #143
SmirkingRevenge wrote: post #123

Earlier quoted context omitted.

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.

Credit card companies make a ton of money on credit cards. Consumer banks are different, and not all banks offer credit cards.

Re: Living paycheck to paycheck is disturbingly common

#169

Post by slow_donkey »

lotsofpulp wrote: post #163
metabagel wrote: post #157

Earlier quoted context omitted.

"If you’re smart, you can go the MD or STEM route and end up in tech or finance" These typically entail large student loans, which make it difficult to save much in one's 20s. "If you can’t do that, then electricians, plumbers, and mechanics make a decent amount starting very young." These are good options, but realistically there are only so many of these jobs to go around. They also require vocational training, whi…

That’s my point, if you’re giving up your earnings in your 20s, you better end up an MD, or FAANG, or a high paying finance/law firms. If that isn’t your trajectory, and you don’t have a trust fund, then you should expect a tough cash flow situation, especially if you’re accumulating debt, and giving up $50k+ per year for 8 years. Unfortunately, I don’t know the situation the trades are in from firsthand experience,…

You're probably talking about LA when referencing socal, but San Diego is reasonably affordable if you live in the right places (aka not downtown/la Jolla).

Re: Living paycheck to paycheck is disturbingly common

#170

Post by nunez »

wonderwonder wrote: post #42

Its much harder (not impossible) to attain wealth if you don't come from at least an upper middle class background. Having a safety blanket (family) that can support you if you fail allows you to take greater risks in the pursuit of greater income, including starting a business. If you fail, worst case you end up in your childhood bedroom as opposed to on the the street. If your parents are able to pay for your colle…

> If your parents are able to pay for your college tuition, you are provided with a much stronger launch pad.

Ain't that the truth. I've spent 10 years at ~$1300/month paying my student loans down. I'm two years from done, but that would have been half a mortgage paid off! To be fair, though, I knew squat about personal finance coming out of college, so I probably would've burned the money some other way.

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