Paycheck to paycheck

**minnie1928** · 07-15-2007, 03:06 AM

I can answer for my mom. The answer is yes and the reason is poor (pathetic actually) planning.

Having grown up in that shadow I decided that my life would not be that way, so I do not live paycheck to paycheck.

In fact, I am taking mom grocery shopping today so that she can see how to buy groceries on a budget. She's 62, one heck of a time to start trying to save money. But it's better late than never.

**poundwise** · 07-15-2007, 03:59 AM

I don't know about most but a significant portion of America lives either paycheck to paycheck or, slightly behind that. That is, they need each paycheck to pay their loans and credit cards and they are treading water or are losing ground. Mainly, this is not due to a lack of availability of education or jobs, or even their income level in general, but an unwillingness of most to plan and to say no to their own wants.

**MonkeyMama** · 07-15-2007, 05:06 AM

Yes. They are always doing these shows on TV how many americans are on the verge of homelessness since they have no backup plans.

I think the prevalence of easy debt is a huge part of it. People now have credit cards and HELOCS, etc. to fall back on. Pretty much anyone can get a loan these days. I think it underscores the importance of savings. Plus running up debt can be very expensive and makes it MUCH easier to spend more than you can afford. You don't know how many 20-year-olds I know who live upper-middle-class lifestyles because they "can" with their credit cards. They want it all and they want it all now. Many feel entitled. However many had very poor childhoods so they want what they never had and now it is easy to get. This is the segment of the population that is interesting to me. A different form of entitlement I guess. But they saw no examples of their life that working hard pay off so they figure why not take the "easy" way.

I never understood why a job loss or a late paycheck would spell disaster for so many people I know. Just a little money in the bank can divert a lot of disaster - it doesn't take much!

**Broken Arrow** · 07-15-2007, 05:12 AM

This is just my opinion, but I honestly believe that many people who live above their means just have no clue what kind of trouble they could be in for... and how much it is killing their own future.

It's similar to what everyone else has said, but I'm just going to put it plainly: Ignorance. I was like that once too, but now I know better.

**MonkeyMama** · 07-15-2007, 05:29 AM

Yeah - that's a good point. I think a lack of financial education is a good point. Before when all you had was cash to work with though you figured it out. A lot of us probably learned well from Depression-era parents, etc. We have gotten so far from that... The combination of lack of financial education and so much easy debt is catastrophic for many.

**flatrock** · 07-15-2007, 05:58 AM

paycheck to paycheck/education

I agree with the lack of education. They should be teaching the perils of credit cards in high school personal finance classes. I think HS school students are sophisticated enough to understand time value of money concepts and use a HP-12C to evaluate basic personal finance issues. I dont understand why these classes arent offered widely in HS. I agree with the depression influence also. My grandparents often spoke about how terrible the depression was. Afterwards they lived frugal & debt free. They never put money in the stock market again and only relied on US bonds and insured CDs. They werent rich but before they died they amassed a real estate and cash money estate of about a million.

**Ima saver** · 07-15-2007, 06:25 AM

I agree with all of you. I got far different answers on my local forum. One person even said I was simple minded to ask a question like that.

**scfr** · 07-15-2007, 07:21 AM

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.

**neatdesign** · 07-15-2007, 08:34 AM

I believe that it's a lack of good and SPECIFIC financial education and knowing the difference between "needs" and "wants."

In my case, my parents are very smart when it comes to money. While they started off fairly simply without a huge income (Dad was an Army officer and Mom was initially a SAHM), they built up their savings, spent wisely, invested wisely, and are now what I would call wealthy.

However, despite all of this, money was absolutely a taboo subject in my family. My parents have never divulged what their salaries were, nor how much they paid for the cars or houses they bought. They never really had a "budget" that they shared with me -- in other words, if we went clothes shopping for school, my mother never said anything like, "Ok, you have $XXX to spend to buy new clothes this year." If I showed her an outfit that I wanted and it was obviously overpriced, she'd say no -- but that was the extent of it. So I just learned to steer clear of asking for things that seemed "expensive" -- except that "expensive" is a relative term, isn't it, and I had no real concept of what was expensive and what wasn't.

When I went to college, my parents cosigned a $500 credit card for me, with the understanding that I would only use it for emergencies and that I was responsible for paying for it. Well, since I never really had any "emergencies" I simply didn't use the card -- and thus never learned how credit cards actually worked. (I didn't learn that until a decade later when I worked for a credit card company.)

When you couple what I learned (or didn't learn) from my parents with the fact that I was not exposed to any financial education whatsoever in high school or college, it's no wonder that I suck at handling money. And I'm speaking as someone who's parents were NOT irresponsible with money!

~ Jenney

**Ima saver** · 07-15-2007, 08:42 AM

I think people should talk about money and it should be taught in high school. Why is this subject so taboo? We talk about almost anything else that was taboo 40 years ago, but not money!

**sweeps** · 07-15-2007, 09:16 AM

I don't think the subject is taboo... It's just that there's not enough money in the budget for it.* It's easily cut, just like P.E., music, art, and extra-curricular activities.

* Ironic, don't you think?

**Ima saver** · 07-15-2007, 10:10 AM

I just read that in 1985 americans saved 11% of their income, now the savings rate is minus 1/2%

**Scanner** · 07-15-2007, 11:58 AM

I have also read though that 401(k)'s and Roth IRA's are not figured into that savings rate.

So, yeah, I can imagine the rate would be -1.5% savings rate.

I don't think many people here, at a savings forum, max out their 401(k)'s, then max out their Roth's and then max out their 529's for kids' colleges to then have a little left over to save (let alone maybe splurge on something after all those savings). What about the self-employed among us too? The max's for SEP-IRA's and Keough's are huge.

Let's cut Americans a little bit of break and not paint ourselves to be mindless boobs like the media does.

**Ima saver** · 07-15-2007, 12:00 PM

I do know that the local people I have talked with say they don't even have a savings account.

Paycheck to paycheck