40% of Americans are living paycheck to paycheck, ill prepared for Coronavirus

Don M. said:
Much of the Middle Class has become complacent over the past 2 or 3 decades, and have been slowly putting savings as a low priority. The need to drive a new car, living in a nice house, enjoying nice vacations, etc., has eaten up any excess funds they might have had. Younger people are in debt, and saving very little. Even many retirees are living on the edge, and are just one major expense away from going into the hole. The "good times" have insulated a lot of people from Reality, and any major pullback in our economy puts millions at financial risk.

If there is Anything good about this major epidemic, it may hopefully induce a lot of people into taking a serious look at how they are managing their money. After all, everyone gets old, and spending the retirement years stressing about money is a miserable way to spend the Golden Years.
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You summed it up nicely, Don. I really hope it is a wake-up call.
 

Catlady said:
" The one oft-cited statistic is that 40% of Americans would struggle to come up with $400 to pay for an unexpected bill. That data comes from the Federal Reserve’s 2018 Survey of Household Economics and Decision Making.

There are plenty more examples (all from before the current crisis) that help explain the economic pain being felt, and evidenced in the jobless claim numbers.

According to Bankrate, nearly three in 10 Americans have no emergency savings whatsoever. Another report found that two-thirds of working millennials have nothing saved for retirement. Americans also hold more than $1.51 trillion in outstanding federal student loans, according to the Department of Education.

A “remarkable share of the households in the economy operate on a paycheck-to-paycheck basis,” Akabas said. “With that many Americans living a financially unstable life even in good times, there’s no way that they can have the backstop to survive the type of economic crisis that we are going to be going through in the next several weeks and months.”

https://finance.yahoo.com/news/the-...y-issues-in-the-economy-expert-194551680.html
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https://zenhabits.net/the-cheapskate-guide-50-tips-for-frugal-living/
 
Empty said:
https://zenhabits.net/the-cheapskate-guide-50-tips-for-frugal-living/
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I've never bought new when I could buy used (cars, houses, clothes, furniture, etc.); I have always lived with very limited to poverty level income. I have lived happy and content. I have loaned people money - friends and family who earned 4 times more than I lived on because their bad habits got them into trouble when something "unexpected" happened. It is always a one-time loan and comes with long, serious lectures!
 

Sorry to say it, but people here in Britain seem to have the same attitude. Watching the news a little while ago, I was struck by how unreasonable people can be. They are looking for someone to blame and seem to think the government should be paying them compensation for loss of earnings. Even though some people have thousands in the bank, they still think they can claim benefits.
 
There are some people who can't get ahead in life. Save some extra money, and the car breaks down. Put aside some each pay, and get laid off. It gets worse the older you become, because finding another job isn't as easy anymore.

We were better off not having assets at one point or our house would have been seized. All the financial advice in the world is BS to someone like that.

No we didn't over-spend or buy frivolous things. We just couldn't get ahead and were thankful when we broke even. You learn not to think ahead too far and teach the kid: You have one pair of good shoes and one jacket for school. Take care of them.

Yes I wearied of people being bothered by our seeming lack of financial sense, but honestly it didn't bother me to do without. We held onto what we had and made it last, and oddly, things worked out.

The only thing that bothers me about the Covid 19 thing is I don't relish drowning in my own blood and fluids. The rest is same-same for me.
 
5 principles of frugal living to help ensure planetary survival and save you money: reduce (consumption) reuse (plastic throw aways) recycle (repurpose glass containers/cat litter buckets, etc.) repair (plenty of tutorials on-line) rotate (share your tools/other things that you rarely use like hedge-trimmers, leaf blowers, etc.) Google "frugal living" for tons of good tips. Also, try substituting. You don't need expensive products to brush your teeth, wash your clothes, clean your house.
 
One of the biggest reasons for people having little or no savings....and, not often mentioned....is Divorce. Unless both the husband and wife are employed in good paying jobs, Divorce quickly ruins the ability to save and plan for the future. Alimony, child support, maintaining two houses, etc., etc., often puts both parties in a "paycheck to paycheck" situation.

Marriage can often be a real "challenge"....trying to maintain a 24/7 relationship with another person who usually has their own "opinions"....after 55 years, I can attest to that, but the alternative, for millions, is living with minimal ability to get ahead, financially.

Statistics show that over 40% of marriages end in Divorce, and that puts 2 strikes against many of them, financially.
 
I'm a firm believer in saving for a rainy but I can't help but wonder if the idea is generational.

When I was starting out we didn't have easy access to lines of credit and credit cards, cash advances, etc... I remember years ago that outside of every factory was a small finance company office where people borrowed to buy things like televisions and refrigerators.

Today I think that many people can use credit cards, tax refunds, unemployment insurance, etc... to provide the financial momentum they need to make it through a financial emergency.

"Save a boyfriend for a rainy day - and another, in case it doesn't rain." - Mae West
 
Judycat said:
There are some people who can't get ahead in life. Save some extra money, and the car breaks down. Put aside some each pay, and get laid off. It gets worse the older you become, because finding another job isn't as easy anymore.

We were better off not having assets at one point or our house would have been seized. All the financial advice in the world is BS to someone like that.

No we didn't over-spend or buy frivolous things. We just couldn't get ahead and were thankful when we broke even. You learn not to think ahead too far and teach the kid: You have one pair of good shoes and one jacket for school. Take care of them.

Yes I wearied of people being bothered by our seeming lack of financial sense, but honestly it didn't bother me to do without. We held onto what we had and made it last, and oddly, things worked out.

The only thing that bothers me about the Covid 19 thing is I don't relish drowning in my own blood and fluids. The rest is same-same for me.
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I understand. Whenever I had a good job, 3-4 years later the company would be sold or reorganized or go bankrupt and I had to find another job and start all over again. One time my refrigerator died and I spent $300 to have a new condenser put in so I wouldn't have to spend money on a new one, and 3 months later it died again and I had to buy a new one (I never buy used electrical/electronics for that reason). Every time I managed to save some money something happened and I had to use that savings.

BUT, there are lots of people out there that don't have savings but buy expensive coffee every day, eat out more than eat in, go on vacations, pay for hairdressers and manicurists and expensive clothes, buy the latest gadgets and expensive cars. Those are the ones that need to learn to ''live within their means". It's okay to live like that if you have money left over for those ''rainy days'' that always happen, but not if you use every penny that you make and have no safety net to land on when you fall.
 
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Is this just a US problem? I have spent a lot of time in France and nobody seems to have any money there, either.

I think the big issue is that manufacturing jobs with benefits and pensions have gone away. There are a lot of reasons for that, but it means a lot of crummy service jobs and no reserves for the proverbial rainy day.

Also, people don't realize how much the world has changed in a very short time. The 25 years from 1945 to 1970 were unique -- more or less full employment, rising wages, rising productivity, lots of innovation. Since 1970, not so much. Slower growth, stagnant wages, slower pace of innovation.
 
JimBob1952 said:
Is this just a US problem? I have spent a lot of time in France and nobody seems to have any money there, either.

I think the big issue is that manufacturing jobs with benefits and pensions have gone away. There are a lot of reasons for that, but it means a lot of crummy service jobs and no reserves for the proverbial rainy day.

Also, people don't realize how much the world has changed in a very short time. The 25 years from 1945 to 1970 were unique -- more or less full employment, rising wages, rising productivity, lots of innovation. Since 1970, not so much. Slower growth, stagnant wages, slower pace of innovation.
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Absolutely not just a US problem..we have the same problems here in the UK and in Europe....
 
Don M. said:
One of the biggest reasons for people having little or no savings....and, not often mentioned....is Divorce. Unless both the husband and wife are employed in good paying jobs, Divorce quickly ruins the ability to save and plan for the future. Alimony, child support, maintaining two houses, etc., etc., often puts both parties in a "paycheck to paycheck" situation.

Marriage can often be a real "challenge"....trying to maintain a 24/7 relationship with another person who usually has their own "opinions"....after 55 years, I can attest to that, but the alternative, for millions, is living with minimal ability to get ahead, financially.

Statistics show that over 40% of marriages end in Divorce, and that puts 2 strikes against many of them, financially.
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I can attest that divorce is a mighty destroyer of wealth.
 
JimBob1952 said:
I think the big issue is that manufacturing jobs with benefits and pensions have gone away. There are a lot of reasons for that, but it means a lot of crummy service jobs and no reserves for the proverbial rainy day.
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The "jobs" picture is changing faster than people can adjust to. Automation, robotics, and artificial intelligence are making human labor more obsolete with every passing year. Only about 15% of current employers offer a defined pension, anymore, and retirees, in the future, are going to have to rely on SS, and an IRA...if they can afford one...if they expect to have any kind of decent lifestyle in retirement.

Millions of once good paying manufacturing jobs have disappeared and been replaced by "service sector" jobs....many of which barely pay a minimum wage. $15/hr only gives a person about $30K/yr....and that hardly allows for more than a basic existence. It's almost reached a point where going on welfare and getting SNAP benefits makes it impractical to even think about going to work.

And yet, the human population continues to grow....especially in the poorer nations, and among the already financially stressed individuals. It doesn't take a genius to see that humanity is heading for a brick wall....and I suspect that day will come not far into the latter half of this century. People of our ages will be the lucky ones....compared to the lives our grandkids, and beyond, may be faced with.
 
Don M. said:
One of the biggest reasons for people having little or no savings....and, not often mentioned....is Divorce. Unless both the husband and wife are employed in good paying jobs, Divorce quickly ruins the ability to save and plan for the future. Alimony, child support, maintaining two houses, etc., etc., often puts both parties in a "paycheck to paycheck" situation.

Marriage can often be a real "challenge"....trying to maintain a 24/7 relationship with another person who usually has their own "opinions"....after 55 years, I can attest to that, but the alternative, for millions, is living with minimal ability to get ahead, financially.

Statistics show that over 40% of marriages end in Divorce, and that puts 2 strikes against many of them, financially.
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I agree. Today with our high standard of living in many cases it takes two workers to maintain that standard.

What has happened to the family?
 
Let me voice a different opinion. First wife and I married young, worked hard and saved as best we could for our retirement, etc. We did without things we wanted to do because we were saving for that rainy day, etc. Then she died in her mid 50s. Damn, I wish we had enjoyed what we had when we still could. When I remarried, I tried to be as free as possible with what we had, but still was worried about retirement, etc. We did both retire early, which, as it turned out, give us precious extra time together. She died in her late 60s. Again, I regret not doing more for her when we were both able to enjoy it. So here I am, in my mid 70s with a little money in the bank, but I'm telling you that money is cold comfort to me. I wish I had spent every f'ng penny of it for the benefit of the two women I loved.

if you want to make God laugh, tell him your plans...
 
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Buckeye said:
Let me voice a different opinion. First wife and I married young, worked hard and saved as best we could for our retirement, etc. We did without things we wanted to do because we were saving for that rainy day, etc. Then she died in her mid 50s. Damn, I wish we had enjoyed what we had when we still could. When I remarried, I tried to be as free as possible with what we had, but still was worried about retirement, etc. We did both retire early, which, as it turned out, give us precious extra time together. She died in her late 60s. Again, I regret not doing more for her when we were both able to enjoy it. So here I am, in my mid 70s with money in the bank, but I'm telling you that money is cold comfort to me. I wish I had spent every f'ng penny of it for the benefit of the two women I loved.

if you want to make God laugh, tell him your plans...
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Life works in mysterious ways. What if you had spent every penny you had and you both lived into your 90's and didn't have enough money to live on? Hindsight is 20-20, you can't foresee the future. I like the saying, "Hope for the best, prepare for the worst". It doesn't have to be all or nothing, balance is the key. Enjoy some and put some away.
 
rgp said:
Then what was your point ?
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Good grief; if I have to spell it out for you. There are actual POOR PEOPLE living in the world today. Poverty level, scraping by to live, no "frills" or Starbucks people. They don't have the luxury or ability to put money aside because they simply DON'T HAVE IT. And others who are better off need not patronize them.

Do you get it now?
 
C'est Moi said:
Good grief; if I have to spell it out for you. There are actual POOR PEOPLE living in the world today. Poverty level, scraping by to live, no "frills" or Starbucks people. They don't have the luxury or ability to put money aside because they simply DON'T HAVE IT. And others who are better off need not patronize them.

Do you get it now?
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I strongly agree.
 
C'est Moi said:
Good grief; if I have to spell it out for you. There are actual POOR PEOPLE living in the world today. Poverty level, scraping by to live, no "frills" or Starbucks people. They don't have the luxury or ability to put money aside because they simply DON'T HAVE IT. And others who are better off need not patronize them.

Do you get it now?
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There are now and have always been poor people.

Jesus even reportedly said, "You will always have the poor among you." What he didn't mention was that we would also always have the smug among us.

DH and I have had periods of financial comfort and periods when the economy cratered (NAFTA destroyed our small business). We burned through our savings, then managed to keep our heads above water long enough to reposition our business into a new niche, but only because of extraordinary hard work, long hours, some extended family financial support, and a tremendous amount of luck.

Starbucks or even McDonald's? Pfffttt... During those crises I grocery shopped the day-old meat and produce bins, baked my own bread, and cut every possible corner. I don't take our current situation for granted, nor do I judge those who work hard but cannot make ends meet.
 
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I call my 20's my "poor girl" decade. But after a wake up call from a teller who asked me if I was only going to keep (a dollar) for myself after depositing my $175 check...for two weeks. After that, I started saving $12 a check, then upped it to $15 a check. Saving, then later investing has been a habit ever since. I'm known for "preaching" to the young folks to get into the habit of saving until they have an adequate emergency fund. There are ways even the most cash strapped waste money (as in Empy's reply) that could go to savings and I've witnessed it. They don't consider that some day their pay checks will stop or be reduced or they'll be without work. And of course there are those who really don't have a nickel to save, some of whom are working two jobs.

If this COVID-19 situation isn't a wake up call for those who could have but didn't, then I don't know what will be. I feel for those who just couldn't save for emergencies and now for those with families to feed who have been thrust into a hard, scary situation.
 

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