Paycheck to paycheck

[nanamom]

I am amazed at the amount of people who live paycheck to paycheck. There emergency fund is the credit card or a loan and savings is not an option. i was with someone who told me she left 500 in the bank and it was the most she'd ever had in reserve. I admit to not being able to save the way my parents did but I do have a decent amount in the bank.

[SnoopyCool]

We are just coming out of living paycheck to paycheck and for us it was a matter of not looking ahead and really not knowing how to tackle a budget. But over time we have improved 10 fold and things are much better.

And as far as teaching kids in high school - it should start much earlier than that. We have a 5 yr old and a 4 yr old and they are learning to budget their own money in a preschool sort of a way. And while I agree it would be great for schools to teach finances, it's the responsibility of the parents to do it (though there are some that could not being that they don't know themselves).

[boefixepa]

It's all I knew growing up, it never dawned on me that there was a different way. So when I started out, that is how I lived. It was a real challenge for me to get control of my finances. My parents still don't get it...they are seeing the realities of retirement, now that they are in their mid fifties??? They are trying the 'get rich quick' method....a pyrimid schemem called - Prime America- and just getting themselves in deeper. Course they don't think I know what I am talking about....

I'd say many, many americans are living paycheck to paycheck and they just can't see any other way. I agree that it's an educational issues, but also it's a result of the society. It's this, got have it now, got to have it all, got to get it new, mentality. The multi-billion dollar advertising market doesn't help.

[LivingAlmostLarge]

Because you want it now! It's easier to get things now than wait.

[krayziebone33]

I don't know if it's most people, but many people do, and it's at all economic levels, not only low-income folks.

In addition to the reasons mentioned above, I believe it's also because so many measure their wealth in terms of their "stuff" (car, jewelry) or their "experiences" (trips, etc) rather than their financial assets.

This is the one point that was not mentioned in earlier responses to this thread. Lack of education is the number one reason, but the point you made about how people measure their wealth with "stuff" is not far behind. The fact that it isn't being taught in high schools is only adding to the problem. I disagree slightly with one of the other members and believe that money matters are still taboo in schools and households. The true irony is that we live in the richest country in the world and this subject is taboo (go figure).

A few weeks back my roommate was complaining about how his girlfriend only makes a few hundred per month plus her allowance and how he is always having to give her money because she can't live on what she makes. When I asked him what she pays per month in bills, he told me that she only has to worry about groceries and her cell bill. Rent and other items are paid for by her parents. Without going into the breakdown of how much she makes per month and all that, I'll just say that the girl makes more than enough to support herself with everything her parents take care of. She just has poor money-management skills and relies on him when she dries up her resources. He didn't seem to understand my point. I could tell because he immediately tried to change the subject after I made him see that he was being used.

It is the most annoying thing to hear people complain about their financial situation and then watch them blow money on the kinds of things they blow it on. I'm definitely not saying I know everything because I CERTAINLY DON'T. I learn something new on this board everyday. However, I think I have become very responsible and I am going to continue to strive for true financial freedom. This forum is a read advantage and I'm glad I found it.

[Saving in So Cal]

Most people I know live paycheck to paycheck, even those with good incomes. They seem like they know that they should be saving more/spending less, but they don't seem to know how to do it. They also seem to be in denial about the potential consequences. Most of them have had safety nets in the form of relatives that can help them in pinch. I don't have that kind of safety net and never did, which is one of the reasons why I am so focused on good money management.

On a related note, I was in a store this weekend behind two young girls (18-21), one of whom was buying about $20 worth of toiletries. She was pulling several credit cards from her wallet and explaining to her friend that she needed the cashier to run through the cards one-by-one to find out which one might still have credit left on it. No one should be starting off adulthood with such poor money management skills. I wanted to say something to her, but I couldn't think of anything that would not be offensive to her.

[krayziebone33]

Most people I know live paycheck to paycheck, even those with good incomes. They seem like they know that they should be saving more/spending less, but they don't seem to know how to do it. They also seem to be in denial about the potential consequences. Most of them have had safety nets in the form of relatives that can help them in pinch. I don't have that kind of safety net and never did, which is one of the reasons why I am so focused on good money management.

On a related note, I was in a store this weekend behind two young girls (18-21), one of whom was buying about $20 worth of toiletries. She was pulling several credit cards from her wallet and explaining to her friend that she needed the cashier to run through the cards one-by-one to find out which one might still have credit left on it. No one should be starting off adulthood with such poor money management skills. I wanted to say something to her, but I couldn't think of anything that would not be offensive to her.

I had a similar experience at a local fast-food joint a few months ago. There were two girls in line ahead of me (in my age group - 20-25) and one pulled out her CC when it was time to pay. The cashier told her that it was declined and she pulled out another one, which was also declined. Her friend, noticing the embarrassment, finally just pulled out her CC and paid for both of them. That made me understand that all the little games and whatnot that I play with myself to save money are well worth it and a smart thing to do. I only wish that I would have started saving money sooner in life (my high school days).

[disneysteve]

It is the most annoying thing to hear people complain about their financial situation and then watch them blow money on the kinds of things they blow it on.

What is really sad is when I have patients tell me they can't afford to pay for their medications but they have a pack of cigarettes and a stack of lottery tickets peeking out of their shirt pockets. Around here, a very poor area, it isn't unusual to find someone who spends $300/month of smokes and lottery, $5/day on each.

[DebbieL]

When I was in high school (I graduated in '88) we couldn't graduate without first taking a course called Consumer Ed. I taught about many of the things we are discussing here. Really basic common sense stuff too. I don't know if they still have that. My daughter goes into grade 10 next year, so I'll see if they have to take that course in the next couple of years before graduating. I think it was a great course and should be required for all high school students (like it was for us back then).

[dreamweaver]

I think that a lot of people are just depressed when they think about saving. If they ask for help from financial advisors they are often given safe but untrue financial advice. For instance, just how much a person needs to retire....where are they getting their figures? Wouldn't you feel overwhelmed? We are brainwashed into believing that all persons need health insurance. We of course all need college educations...because it will make you So much more money (yeah, right. Some fields will, but many will not). We all even need cell phones...just in case. No wonder they are all living paycheck to paycheck...I am surprised that they can afford to live at all.

[disneysteve]

I think that a lot of people are just depressed when they think about saving. If they ask for help from financial advisors they are often given safe but untrue financial advice. For instance, just how much a person needs to retire....where are they getting their figures? Wouldn't you feel overwhelmed? We are brainwashed into believing that all persons need health insurance. We of course all need college educations...because it will make you So much more money (yeah, right. Some fields will, but many will not). We all even need cell phones...just in case. No wonder they are all living paycheck to paycheck...I am surprised that they can afford to live at all.

I think you make a good point, though I'd debate not needing health insurance. One relatively minor illness, which can strike at any age, could bury you financially. Not having health insurance is a huge financial risk that really isn't worth taking. Overwhelming medical bills are the number one reason that people file for bankruptcy.

[Gruntina]

When I divorced, I got stuck with a 60K debts. I felt like I was living paycheck to paycheck. Only because I was not poor but I was extremely adamant about paying off the debts so I can emotionally let go of my abusive marriage faster. Looking back I did live paycheck to paycheck voluntarily and not because I was poor. I don’t regret it once bit even though it was hardship. That hardship has definitely changed me for the better and made me stronger to protect myself in many different ways. It also made me realize things are attainable if you work hard for it so it is good to dream big.

I don’t advice this for people who are spending money on wants and end up living paycheck to paycheck. That is a whole different ballgame.

[dreamweaver]

What happened to my post??? Must have hit the wrong button. Oh well, the gist was that some people can go without HEALTH insurance, maybe they need a much cheaper accident only policy. Get what you know you need, not what you are told you need. I have nothing right now. Good genetics and overall good health. When I need more I will get more.

[mobrep]

I think that a lot of people are just depressed when they think about saving.

Personally, I think that does have a large factor in why people stay paycheck to paycheck. It's largely the fear of having people think you are a failure because you have not saved money but yet spend every cent you make. This is why I think many never bother to ask for help or even attempt to change their ways.

[disneysteve]

When I need more I will get more.

When you need more, it will be too late.

It is very dangerous to walk around with no insurance. Something as simple as slipping on the ice could cost you thousands of dollars. Do you have a crystal ball? We had no idea that my wife would need gallbladder surgery last fall? She was perfectly fine until the night when she developed excruciating pain. Her hospital bill was over $28,000.

Maybe I'm biased because I'm a physician, but I see what healthcare costs and I see patients who were in perfect health until something totally unforeseen happened.