Living paycheck to paycheck gets harder

gackle · #1 (**permalink**) 10-19-2007, 02:36 PM

Quote:

From Family Dollar to Wal-Mart, merchants have adjusted their product mix and pricing accordingly. Sales data show a marked and more prolonged drop in spending in the days before shoppers get their paychecks, when they buy only the barest essentials before splurging around payday.

This makes me appreciative that we have a site like this to lift each other up in cyber-financial accountability! This quote is humorous in a pitiful sort of way; people can't even understand that if they wouldn't splurge at the beginning of their paychecks they wouldn't have to penny-pinch at the end. Maybe that should be the first babystep for the financially ignorant. So goes our society today....

Ima saver · #2 (**permalink**) 10-19-2007, 03:09 PM

I agree gackle!!

cicy33 · #3 (**permalink**) 10-19-2007, 04:04 PM

I know for me I do spend more right after my paycheck because that is when I have money. I have to do grocery shopping and sometimes this includes personal stuff. There are people who spend too much on dumb stuff, but I think that what they are also seeing is that people purchase the things they need right after they get paid and then they don't do it again until payday. Could that be a normal cycle for most people? I mean isn't it when we spend money is when we have it? For example, I got paid last Friday, I paid bills, bought groceries and other things we needed and then didn't spend any more during the week. tomorrow I have to go to the store again. One pay period last month I spent more cuz my dh needed jeans, his were really holy and I don't mean religious. He also needed socks (darn sock monster, he also eats holes in socks not just steals them), the kids needed socks, as they are growing. I think the biggest time people really splurge is when they get their income tax refund back.

Hez · #4 (**permalink**) 10-19-2007, 09:26 PM

I believe it. My friend used to work at McDonald's and she told me that their busiest day was always the day welfare cheques are distributed. Sad, really.

But I also agree with the above poster, I think that some people just use the time shortly after payday to pay their bills and buy the necessities because that's when it makes sense. What's the point of waiting 'til later when you have the money at payday?

gackle · #5 (**permalink**) 10-19-2007, 09:49 PM

I agree with you both about spending the money when you have it. The author used the word "splurge" and to me splurge entails buying wants, not needs. Sounds like it could be taken in several different contexts.

safari · #6 (**permalink**) 10-19-2007, 10:51 PM

My payday does not affect my spending habits at all. I buy things when I need them, because I know that I have money budgeted for all types of expenses and I have a positive cash flow.

momof1in150 · #7 (**permalink**) 10-20-2007, 04:45 AM

I believe the reason why spending before payday has decreased is because people can't float checks anymore. They can't write a check 2-3 days before payday and get away with it.

FrugalFish · #8 (**permalink**) 10-20-2007, 07:38 AM

I just read this article a few minutes ago. Overall it was sad, and though DH and I are hanging on okay, our money definitely doesn't go the distance it did even a year ago. With gas prices so high, and groceries creeping up more and more every day, our expendable income is shrinking.

I just put DH's entire COLA into his 401K and worry that it was a mistake and we will be unable to make ends meet as prices keep going up. I do feel more creative about cutting expenses lately but worry about what happens when creativity is not enough...

dotcom · #9 (**permalink**) 10-20-2007, 07:45 AM

Man thats so true!

cicy33 · #10 (**permalink**) 10-20-2007, 01:02 PM

I know! Prices are getting ridiculous. McDonalds I have been eating at more lately due to the game and I need to stop! but normally we don't eat there at all. maybe like once a month. Actually when we take the kids out we go to a real restaurant because it is actually cheaper to go out for pizza or mexican than to eat at mcdonalds. a family of 6 at mcd's is over $30. I can order two pizzas, two orders of breadsticks for $20. and that is from pizza hut! Our gas prices in town one day were 2.65 and the next morning they were 2.77. that is a huge jump in one day. Milk is almost $3 a gallon. If Ididn't coupon I would spend a fortune on groceries.

gackle · #11 (**permalink**) 10-21-2007, 12:00 PM

Milk is $3.50 a gallon here in Dallas. Almost a dollar more per gallon than gas. I have to learn how to improve my taste bud satisfaction/gulp to conserve milk.

disneysteve · #12 (**permalink**) 10-21-2007, 04:54 PM

Quote:

Originally Posted by cicy33

I know for me I do spend more right after my paycheck because that is when I have money.

Could that be a normal cycle for most people? I mean isn't it when we spend money is when we have it?

Quote:

Originally Posted by safari

My payday does not affect my spending habits at all. I buy things when I need them, because I know that I have money budgeted for all types of expenses and I have a positive cash flow.

I'm with you, safari. Our spending pattern has absolutely nothing to do with when we get paid. Why? Because we don't live paycheck to paycheck. We have savings. We don't need to wait for our next paycheck in order to pay our bills or go out shopping. In fact, since we use our credit card for almost everything, payday is even less relevant.

That said, you are probably right, cicy33. It probably is the normal pattern for a lot of people because I've read that 60% or more of Americans live paycheck to paycheck.

myself · #13 (**permalink**) 10-22-2007, 07:14 AM

I have to agree with Safari.
If you don't go over what you've budgeted for, things are much easier.
And I also have to agree with DisneySteve.
If you use a credit card wisely (i.e. buying only things that you will pay for in full when the CC bill arrives), then the timing of your paycheck is almost irrelevant.

boefixepa · #14 (**permalink**) 10-29-2007, 10:35 AM

I use to be this way to, until I stopped living paycheck to paycheck. So as others have noted that is the ticket when it comes to this. To many people can not break that cycle.

My English Castle · #15 (**permalink**) 10-29-2007, 11:04 AM

Although I know food is relatively inexpensive in the US, I do think prices have crept up quite a bit in the past year. I'm looking harder for specials, but
it's more of a task than it used to be.

And while we certainly don't live paycheck to paycheck, there is something wonderful about payday that makes me want to have a little splurge (lunch out, a magazine, fresh raspberries at the supermarket?). I'm not alone, am I?

disneysteve · #16 (**permalink**) 10-29-2007, 11:26 AM

Quote:

Originally Posted by My English Castle

And while we certainly don't live paycheck to paycheck, there is something wonderful about payday that makes me want to have a little splurge (lunch out, a magazine, fresh raspberries at the supermarket?). I'm not alone, am I?

Payday is really a non-event for us. My wife's check is direct-deposited. I get a paper check but often don't deposit it for several days after receiving it until it is convenient to get to the ATM. I won't go out of my way or make a special trip to put it in. My checking account doesn't pay interest so it doesn't matter when I deposit it.

jIM_Ohio · #17 (**permalink**) 10-29-2007, 12:46 PM

Quote:

Originally Posted by gackle

Linky

This makes me appreciative that we have a site like this to lift each other up in cyber-financial accountability! This quote is humorous in a pitiful sort of way; people can't even understand that if they wouldn't splurge at the beginning of their paychecks they wouldn't have to penny-pinch at the end. Maybe that should be the first babystep for the financially ignorant. So goes our society today....

My first job out of college paid my 39k salary once per month. I don't care how well you budget, getting paid once per month means their is little left that 31st day, until some savings is set aside each month... that takes a few years to build up though.

mariogreymist · #18 (**permalink**) 10-29-2007, 12:52 PM

Quote:

Originally Posted by My English Castle

Although I know food is relatively inexpensive in the US, I do think prices have crept up quite a bit in the past year. I'm looking harder for specials, but
it's more of a task than it used to be.

And while we certainly don't live paycheck to paycheck, there is something wonderful about payday that makes me want to have a little splurge (lunch out, a magazine, fresh raspberries at the supermarket?). I'm not alone, am I?

I allow myself to eat out for lunch at the local teriyaki place. The $9 tab is about 10x my normal lunch expense.

Diolla · #19 (**permalink**) 10-31-2007, 10:58 AM

I always had trouble with this paycheck to paycheck thing.

I don't consider myself living paycheck to paycheck but on payday (my check is direct deposited) I pay all the bills for the following 2 weeks, withdraw cash for my day to day expenses and then send all but a small ($50) buffer to my savings.

Since about 50% of my paycheck goes into savings/investments I don't think of it as paycheck to paycheck it is just that when the money comes in that's when I tell it where to go. I don't let it sit around in my checking. The checking account is just a vehicle for getting it where it needs to go.

disneysteve · #20 (**permalink**) 10-31-2007, 11:35 AM

Quote:

Originally Posted by Diolla

I don't consider myself living paycheck to paycheck

Since about 50% of my paycheck goes into savings/investments I don't think of it as paycheck to paycheck

That is definitely not paycheck to paycheck. My understanding of paycheck to paycheck is folks who spend (not save) their entire take-home pay between the time they get it and the time their next paycheck arrives.