One Thing This Govt. Shutdown Has Revealed

[fmdog44]

I am a little shocked and saddened to learn how many people not getting a check are living paycheck to paycheck and so many of them have nice paying jobs.

 

[terry123]

I was surprised too to hear that. Guess I just assumed everybody lived within their means. It could be that I have always lived below my means since I supported my two kids by myself and worked two or three jobs to do so. Being frugal is still the way I live and never thought about buying things I cannot afford. Hearing about some of their salaries shocked me as I think about the money I could have saved if I had that when I was working!

 

[mathjak107]

don't forget they may be saving a lot but it is in retirement plan money.

the other problem is the mantra live below your means is pretty meaningless and un-actionable . it is really the ratio of discretionary to non discretionary spending that counts . you can certainly keep expenses below budget but if everything is a need then there is no where to cut back from even though you are below your means " whatever that is supposed to mean .

so if i buy a house that "fits within your means "

i get laid off ,,, do i move immediately ? or another scenario , what happens if unexpectedly i need a new car and a good part of our budget is spent , what happens to my "means " ? what if i work on commission and my means changes this year ?

what if the markets have a bad year ? do i move ?


so means is always changing . the problem is there are very few guidelines for how to spend . how much should be allocated go housing , to a car , to expenses you can't adjust ? that is an actionable plan ... telling someone live below your means is like saying drive safely or get a good paying job . they sound great but what does it mean as far as what do i do ? you get the idea .

 

[bingo]

they will draw unemployment

 

[applecruncher]

they will draw unemployment

Even if that happens, unemployment is a fraction of what a person's salary was.
The decision as to whether they will get unemployment won't be made for 30 days.

 

[Aunt Bea]

We all have a different notion of financial security or how close to the financial edge we are willing to get.

For some people keeping a few million in an offshore account makes them feel comfortable and for others, it's having twenty dollars tucked in their sock.

The statistics don't take into account things like credit cards, side jobs or other household income, good old mom & dad, etc...

Back in the slump of 1987, I decided that I didn't want anything that could be taken away from me and I started backing away from the financial edge.

We can only hope that this cash flow blip becomes a teachable moment to help people understand the benefits of living below their means and building some cash or credit reserves for use in future emergencies.

 

[mathjak107]

it really is not a question of what we think is close to the edge . what we think and what research shows or what financially is healthiest can be two different things . the problem is what "we " think are usually not what is financially healthiest . . but that is because there is really very little out there about how to spend . we have lots of info on how to invest out there , but very little as to what is healthiest financially as to spending .

fidelity has made a attempt at producing some guidelines .

30% of the budget remains discretionary for flexibility .

 

[Tommy]

"Living beneath our means" became a way of life for us about 30 years ago. By way of background, we started this immediately following a job change and a long distance move, and prior to purchasing a home. It was a very intentional decision and, although money was very tight at the time, the change wasn't prompted by dire financial urgency.

From the beginning, our ground rules have been:
1. Keep a written record of every cent we spend. We do this to this day.
2. Maintain a detailed written budget, balancing and updating it frequently. In the beginning this was done weekly; now we balance monthly and update once a year.
3. Pay off all debt, other than the mortgage, pay off all credit card balances monthly, and never incur any new debt. Per our plan, we were able to get rid of the mortgage when we retired.
4. Always maintain liquid savings equal to at least three to six months income for true emergencies.
5. Have a realistic retirement plan and stay on track toward retirement savings goals.

So far, this has worked for us. It's gotten us through a couple extended periods of unemployment and a couple family emergencies. We live a fairly simple life and I thank the good Lord every day for what He provides. I understand that there are those whose incomes don't meet even their most basic needs, which is why "Charities" has been one of our budget accounts from the start.

My point is, that "living beneath your means" isn't something a person decides to do only when financial calamity strikes. It's truly a consciously chosen way of life, ideally started before one's peak earning years (although late is better than never). We sadly watched so many friends and neighbors with good incomes buy houses that, although they could afford them at the time, were actually beyond their means. People who used their homes as piggy banks, refinancing them to fund exotic vacations, boats, fancy cars, and other luxuries. People who carried massive amounts of debt to finance their chosen lifestyle and then were puzzled when they found themselves in dire financial straits.

I don't, nor will I ever, look down at those who find themselves in financial difficulty. Been there, done that, still carry the scars. I just wanted to share another option for any who might be interested. (Maybe I should be posting this on a "young adults" forum.)

 

[Don M.]

I am a little shocked and saddened to learn how many people not getting a check are living paycheck to paycheck and so many of them have nice paying jobs.

Statistics show that over 25% of households have little or no savings set aside for emergencies. Ideally, a person should have enough cash set aside for at least 6 months of normal spending. When a person is young, and just starting out, that may be difficult, but there are millions who have been working for years, that still live from paycheck to paycheck. Saving and prudent financial management seems to be a topic that many do not understand.

 

[applecruncher]

Statistics show that over 25% of households have little or no savings set aside for emergencies. Ideally, a person should have enough cash set aside for at least 6 months of normal spending. When a person is young, and just starting out, that may be difficult, but there are millions who have been working for years, that still live from paycheck to paycheck. Saving and prudent financial management seems to be a topic that many do not understand.

Easy availability of credit cards has been part of the problem. CC companies raise the limit and some see it as free money.
Cash advance/Pay day loans have gotten many into trouble although there was a crackdown.
I also think some people are too quick to lend/give money to people with a sob story who don't manage their own money.
Keeping up with the Jones.

A lot of factors come into play.

 

[mathjak107]

i never try to predict what straw people are doing , we really don't know ... i know we are all guilty of it but it is really on par with every time there is an accident mentioned on facebook it is always followed with " they are texting " no one knows what happened but " they are always texting "

 

[applecruncher]

i never try to predict what straw people are doing , we really don't know ... i know we are all guilty of it but it is really on par with every time there is an accident mentioned on facebook it is always followed with " they are texting " no one knows what happened but " they are always texting "

What's your point?

I'm not seeing what texting has to do with this discussion.

 

[mathjak107]

the point is we have all these comments about straw people unable to pay bills or have savings because of mis-use of loans , credit , etc , yet we have no clue what their story is . it is like people when they see photos of accidents today - first words without knowing any details is they were texting .

the same as someone with low liquidity who is immediately thought to be mis-using credit , over spending or in over their head in loans , etc . we don't know that to be the case .

 

[applecruncher]

the point is we have all these comments about straw people unable to pay bills or have savings because of mis-use of loans , credit , etc , yet we have no clue what their story is . it is like people when they see photos of accidents today - first words without knowing any details is they were texting .

the same as someone with low liquidity who is immediately thought to be mis-using credit , over spending or in over their head in loans , etc . we don't know that to be the case .

I see. Thanks for answering.

True, people often make assumptions and generalizations. Not always, but sometimes. (I've never assumed the cause of an auto accident was texting, although I know of a tragic case when it was).

Back to finances: I don't think comments were meant to be judgmental. Of course, we don't know about every individual case. I've certainly made bad...make that horrible... financial decisions in my lifetime. I think the comments are an effort to explain why some people find themselves in financial hot water when their paychecks disappear.

 

[C'est Moi]

Kind of a different point about the shutdown. I don't understand why the Coast Guard is not getting paid when all other branches of the service ARE? What's that all about???

Guess it's time to google...nthego:

 

[Sassycakes]

I don't know what any of these people's situation is who aren't getting paid. It really doesn't matter to me if they are financially secure. I think what happened to them isn't fair, especially when the Politicians are still getting paid. Most of those who are not working now are ones who's jobs are necessary for our safety,like the TSA,FDA etc. I feel in a way that we are all paying.

 

[C'est Moi]

Kind of a different point about the shutdown. I don't understand why the Coast Guard is not getting paid when all other branches of the service ARE? What's that all about???

Guess it's time to google...nthego:

ETA... well, here's the lame reason--

Troops in four of the five branches of the Armed Forces will not be affected. Life, for the most part, will continue as it has, with only minor hiccups felt by a few civilian employees. The major exception to this is the roughly 42,000 Coast Guardsmen who currently face uncertainty.

[h=3][/h]To put it simply, the Coast Guard is a part of the United States Armed Forces, but isn't a part of the Department of Defense. They're a part of the Department of Homeland Security.

 

[fmdog44]

don't forget they may be saving a lot but it is in retirement plan money.

the other problem is the mantra live below your means is pretty meaningless and un-actionable . it is really the ratio of discretionary to non discretionary spending that counts . you can certainly keep expenses below budget but if everything is a need then there is no where to cut back from even though you are below your means " whatever that is supposed to mean .

so if i buy a house that "fits within your means "

i get laid off ,,, do i move immediately ? or another scenario , what happens if unexpectedly i need a new car and a good part of our budget is spent , what happens to my "means " ? what if i work on commission and my means changes this year ?

what if the markets have a bad year ? do i move ?


so means is always changing . the problem is there are very few guidelines for how to spend . how much should be allocated go housing , to a car , to expenses you can't adjust ? that is an actionable plan ... telling someone live below your means is like saying drive safely or get a good paying job . they sound great but what does it mean as far as what do i do ? you get the idea .

Well, you leave out one big pile and that is "be prepared" for life's changes and some do it and some don't. How many people have experienced the things you offer and have gotten by just fine. So don't go blaming this cruel world for the problems of every day living. All of your points are weak.

 

[fmdog44]

ETA... well, here's the lame reason--

Troops in four of the five branches of the Armed Forces will not be affected. Life, for the most part, will continue as it has, with only minor hiccups felt by a few civilian employees. The major exception to this is the roughly 42,000 Coast Guardsmen who currently face uncertainty.

To put it simply, the Coast Guard is a part of the United States Armed Forces, but isn't a part of the Department of Defense. They're a part of the Department of Homeland Security.

You are far from reality. If I am laid off in Smalltown, USA I don't frequent your store, I cut back on the number of times I fuel up at your station. I quit going to your restaurant. I stop buying clothes for my kids at your store. None of us go to your barber shop as we cut our own hair. We no longer contribute to the local charities and so on and so on. Now you are broke like me!!

 

[Don M.]

I think what happened to them isn't fair, especially when the Politicians are still getting paid.

Agreed! if these ego-driven politicians can't or won't do their jobs, and shut down the government, they, too, should give up their paychecks and perks. I swear...it seems like our politicians are this nations worst enemies.

 

[C'est Moi]

You are far from reality. If I am laid off in Smalltown, USA I don't frequent your store, I cut back on the number of times I fuel up at your station. I quit going to your restaurant. I stop buying clothes for my kids at your store. None of us go to your barber shop as we cut our own hair. We no longer contribute to the local charities and so on and so on. Now you are broke like me!!

Fascinating, but what does that have to do with the Coast Guard?

 

[mathjak107]

Well, you leave out one big pile and that is "be prepared" for life's changes and some do it and some don't. How many people have experienced the things you offer and have gotten by just fine. So don't go blaming this cruel world for the problems of every day living. All of your points are weak.

sorry but my points are spot on . the term live below your means , means nothing . it is like drive safely . it offers nothing actionable that people can follow or do to be considered living below their means .

what you really are concerned about is the ratio in your spending between the discretionary and non discretionary stuff

 

[fmdog44]

sorry but my points are spot on . the term live below your means , means nothing . it is like drive safely . it offers nothing actionable that people can follow or do to be considered living below their means .

what you really are concerned about is the ratio in your spending between the discretionary and non discretionary stuff

I'll show my take on what's going on and you show yours to the folks lining up in bread lines and you better do yours from a distance.

 

[fmdog44]

Fascinating, but what does that have to do with the Coast Guard?

Try real to read what you wrote...…………….

 

[mathjak107]

I'll show my take on what's going on and you show yours to the folks lining up in bread lines and you better do yours from a distance.

i have no idea what you are referring to or even mean with these replies ... if we are talking on the same page then there is something wrong here