Living Paycheck to Paycheck?

[Ima saver]

Re: Living Paycheck to Paycheck?

That is hard to believe. I had better sense than that when I was 13.

[greedy4chips]

Re: Living Paycheck to Paycheck?

Can you imagine the pressure of knowing your expenditures are limited by your paycheck and its frequency? Apparently too many can, because that is their main form of budgeting.

I too went thru the times when money was very tight, but I was also contributing the maximum to my 401k and giving the govt a $9000/yr loan by not having my W4 witholding set properly (for me). I don't think many of those listed by Ima saver and disneysteve fall into that category whereby they have the freedom to allocate their income to different items and still stay current on everything.

[disneysteve]

Re: Living Paycheck to Paycheck?

I too went thru the times when money was very tight, but I was also contributing the maximum to my 401k and giving the govt a $9000/yr loan by not having my W4 witholding set properly (for me). I don't think many of those listed by Ima saver and disneysteve fall into that category whereby they have the freedom to allocate their income to different items and still stay current on everything.

I agree. If you are maxing, or even contributing anything, to your 401k and/or you are intentionally having income over-witheld to get a big refund, I wouldn't count that as living paycheck to paycheck.

[Gruntina]

Re: Living Paycheck to Paycheck?

This post is bittersweet for me... I have lived in poverty for a very long time... especially through my childhood years and there were time it was much less than paycheck to paycheck.

I spent more than half of my life that way and when I was finally on my own... I managed to get everything paid but also gone into debts. Now I am at a point where I am just almost completely debt free, have an emergency fund and had more than enough to pay off all unexpected things like car repairs and flea treatments to the house and so on and still pay my bills ahead of time. It amazes me that I somehow got out of this cycle... but the memories of not having any money..... That time my mother always lived paycheck to paycheck and we were always so broke. Mainly because she never had a loan or a credit card. But if you just think about it... if all credit cards were taken away and loans... a lot of us would be living below poverty and would not do well at all at paycheck to paycheck. So some people are actually cheating paycheck to paycheck by using loans or credit cards to fill in the gaps… otherwise they be on the streets.

[disneysteve]

Re: Living Paycheck to Paycheck?

That time my mother always lived paycheck to paycheck and we were always so broke. Mainly because she never had a loan or a credit card.

Certainly, there are people who are living paycheck to paycheck simply because they don't earn enough to do anything else. They earn barely enough to get by. I certainly have nothing but sympathy for them.

However, if the stats are correct and the majority of Americans are living this way, lots of them earn decent incomes but just manage to spend every penny before the next check comes.

[MonkeyMama]

Re: Living Paycheck to Paycheck?

I know plenty of people with very decent wages who live paycheck to paycheck.

My friends who say they can not go to lunch or do this or that until their next paycheck, I classify as living paycheck to paycheck. Most of them make six figures. Their purchases revolve around payday and nothing else. Budget is not part of their vocabulary.

I believe those statistics, looking at the people around me.

If they can not afford to buy lunch until their next paycheck, yeah I think they are in serious trouble.

[disneysteve]

Re: Living Paycheck to Paycheck?

My friends who say they can not go to lunch or do this or that until their next paycheck, I classify as living paycheck to paycheck. Most of them make six figures.

If they can not afford to buy lunch until their next paycheck, yeah I think they are in serious trouble.

I do wonder, though, how many of them have plenty of money and are dealing more with cash flow issues. For example, I was waiting to make my mortgage payment until I got this week's check. It isn't because I have no money. Just that it isn't in my checking account at the moment. Rather than having to transfer funds from somewhere else, I just wait until I make a deposit before writing the check.

[MonkeyMama]

Re: Living Paycheck to Paycheck?

Most of the people I know do not have a penny in the bank. So they say anyway...

They are just plain broke...

[disneysteve]

Re: Living Paycheck to Paycheck?

Most of the people I know do not have a penny in the bank. So they say anyway...

They are just plain broke...

Probably true. I know on another board, this topic came up and several people said they were living paycheck to paycheck, but then added that they put 10% of income in their 401k and money into their kids' college plans and have an emergency fund, but spend everything that's left. That's not my definition of paycheck to paycheck.

[Gruntina]

Re: Living Paycheck to Paycheck?

Half of my friends are living paycheck to paycheck and often run out of money before the next pay. In some ways I do not blame them as Rents are ridiculous where I live. I only know one or two that pays rent or mortgages that is less than 50% take home pay. Those that do pay less than 50% of take home pay to rent are those that brought the home before the housing prices skyrocketed or those simply renting out a room.

[PetMom]

Re: Living Paycheck to Paycheck?

I think it depends on some factors. We are now scrambling to pay our electricity bill:
450, 450, then whew 367. but they want it by the 18th of this month. We are running
behind on it by about a week and a half.

By being late on other bills we are assessed a late fee. EVERYTHING it seems has a late fee now, electricity assesses I think 5% if late. Water has one, mortgage has one of about $30.00. Everything does.

We have old credit card debts we pay each month and the deductible on a hospital bill (even with excellent ins. that takes out a whopping amount each month a few hours in the emergency room with some chest pains can cause a 480.00 in deductible payments).

I have emergency dog savings I am building up slowly again, and opted to get my own small balance credit card and I pay that $20.00 each month, but we stay away from credit
cards for emergencies.

Our latest other emergency besides dog stuff was a dryer from Sears that broke 3 days after having it a year! I learned quickly how to hang stuff outside, as we sat there with them trying to repair it for over 200.00 or selling us another warranty for $169.00 and waiting to call in this repair.

disgusted, my husband figured out how to fix the busted heating element and it cost only $60.00 for the part sold at Sears.

We got new phone service and they billed one month in advance!

Gasoline prices have been the only relief we have seen budget wise lately.

This has been the past month of emergencies wiping out emergency fund, rising electricity rates and broken dryer. We are just trying to play catch up each week. Building back up the wiped out emergency fund is going to be a challenge, but if we can just save on the late fees everyone gives us that could be doable.

We have no kids and actually make a typical ok income. Have just one car payment too.

I wager a lot of people are flat out just living on credit cards and making payments for living expenses with them. Living paycheck to paycheck is alarming.

We do have the ability to cash in a chunk of retirement to keep us off the street, but that would be putting us on the street in the future! We have a few friends who transfered jobs and opted to cash in retirement to pay off credit cards - ouch.

[JanH]

Re: Living Paycheck to Paycheck?

Petmom: Just a thought, could you have your electric bill averaged? Ours is about the same every month because it has been "leveled" for the year. They do it based on your last years bills I think. You can call your company and see if they do that, then you won't have these enormous bills to kill your budget. We live in a very hot climate and it has helped our budget during the killer months.
Just saw you are in the Fort Worth area, you guys got blasted this year!

[PetMom]

Re: Living Paycheck to Paycheck?

Yes that is a good tip, someone here does that and earns interest on the savings unlike being wiped out for 3 months like we are the recouping.
I think we will go to this by next spring.

I called and asked about this, but they base it on last years average.
My goal is to work on getting it as low as I can these next few months
to have a better low average. For now I was quoted 330.00 per month.

I think I can get it lower and the fall/winter months are the cheapest, right now that is what we are banking on.

I already signed up for the price freeze of where we are locked in at 15 cents for kwh (of course unless some price in natural gas changes this).

Plus I found out they have a 'rewards' card that I had not been aware of.

[boefixepa]

Re: Living Paycheck to Paycheck?

Petmom,
I average my electrical bill myself and keep the surplus during winter tucked away for those big bills during summer. If you can manage that it may help you and that way you earn the interest on the money while it sits.

[markio26]

Re: Living Paycheck to Paycheck?

thank you for posting this... interesting comments... i learned a few new ideas....
i think some ppl. are just not educated enough to manage their financial picture....they do not know what to do...