64% of the population is living paycheck-to-paycheck

I want to put in a kind word for "the kids", be they Millenials, Gen Z, whatever.

When I was 22 I moved to New York. A studio apartment on the Upper East Side cost $200 per month. My college tuition had cost about $1500 per year, so no student debt. I made a whopping $8500 per year, but I paid all my bills and had a little left over each month.

47 years later, that same apartment is about $3500 per month. The 22 year old now has massive student debt, plus his or her salary, while much more than $8500 per year, has nowhere near kept pace with rents.

The point is, it's a lot harder to get ahead these days, or so it seems to me. Even kids with good jobs and good salaries just get by. It's not so much that they want it now, it's just that they can't afford much.
 

Em in Ohio said:
My humble home and my humble car were both bought with cash. Now that my ex died and my Social Security increased, I'm not in that pay-check to pay-check mode for once. Phew. My one credit card is used as a convenience, not as a necessity. The only big fear that I have is a hospitalization. A one week calamity would put me right back where I was, struggling to survive. If 64% of the USA population is living pay-check to pay-check, I have to ask "Why?" With government hand-outs and employers giving incentives and higher wages, is it merely a lifestyle issue and/or credit card debt?
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Many people are working poor BUT make too much to qualify for the government assistance you speak of. I know someone who said she was getting $1 too much (one damned dollar) to qualify, still her income as a senior wasn't enough to pay her expenses. Blessedly one of her sons was able to help her with some bills. Yes, some people have over spent, racked up credit card debt BUT parents who work, even those making decent paychecks likely have car payments, mortgage or rent (which is sky high these days) and perhaps the expensive day care payments. The answers to your question "Why?" can have a multitude of answers.
 
I lived paycheck to paycheck when I was in my 20's. I had a "good" government job but wasn't paid that much. I was a single parent for much of that time. I got on city welfare for only a couple of months...couldn't wait to get off it. I learned to "pay myself first" thanks to a simple question a young bank teller asked me when I put $174 of my $175 paycheck (we got paid every two weeks) into my checking account. "Aren't you going to keep any of this for yourself?!" As if she knew all of it had to go toward bills. I'd thank her right now if I knew who she was.

During that time, to my surprise I got a major credit card (unsolicited), probably because my mother had opened a revolving credit account for me at a dress store where she shopped. I always paid off what I charged. So I also learned how to handle credit in my 20's. I never held a balance because I hated the thought of paying interest. I haven't paid bank fees of any kind in 50 years. I remained debt free (technically) throughout most of my life since I always paid my balances in full, except for the car payments on my new 1994 Camry and the purchase of our timeshare (interest waved) because it was to be paid off in a year. I retired debt free but soon after we had the kitchen and bathroom remodeled. We had to pay the contractors in full when the work was done...so again, didn't hold debt.

Recently I offered to loan my son quite a sum. He encountered unexpected bills after his wife passed and needed expensive car repairs. I paid all his charges (which I put on my cards) in full each month. Racked up some nice reward points. I worked out a 24 month, no interest payment plan for him. I can well afford to help and my son has always been diligent about paying me back on time. He was already under a lot of stress and heartache (well, we both were). I'm glad I could make things easier for him. As it stands now, my personal expenses, including my portion of our carrying charges (aka HOA fees) and utilities only takes up 40% of my net income not counting my investment income, which I don't take distributions from.
 

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I was delighted when, many years ago, my savings exceeded my outstanding debts - mortgage, car etc.. I managed to keep that going and built up reasonable savings which in those days returned 6 or 7% interest. Having paid my children's university fees and cleared all my debts, things were a bit depleted, but at least there were no big outgoings.

We're living happily now with adequate savings and pensions. Well, I wasn't so happy when I received my P60's (statement of income and tax paid) to see that having paid tax all my working life, I'm still paying a load of tax now that I'm retired!
 
Em in Ohio said:
Yes, I can only add that folks not only want things NOW as you mentioned, they want them NEW. Growing up with parents born 1913-15, I was taught the value of hand-me-downs, loaner items, and second-hand stores. So, perhaps it can be attributed to "status" or "keeping up with the neighbors" mentality.
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I'm sure guilty of squeezing the use out of appliances and tools. Had a gram scale for years that the button broke and I kept using a pen to fuss with it and turn it on and off...finally one day it gave up the ghost and hub bought a new one online for 9 bucks. Boy was it way better...lol.
 
The current financial climate in the USA has forced many of us to rethink and retool our spending budgets. Food prices and fuel seem to be hitting our pocket book the hardest. With every adversity comes a seed of opportunity. My wife and I have become more focused on our spending, and the benefit is that we have improved our communication with each other.
 
OneEyedDiva said:
Many people are working poor BUT make too much to qualify for the government assistance you speak of. I know someone who said she was getting $1 too much (one damned dollar) to qualify, still her income as a senior wasn't enough to pay her expenses.
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That was my situation for much of my life. I had people-jobs that I loved, but they paid minimally. Like your example, I was almost always "just over" the ridiculously low income limits to qualify for benefits. I actually could have qualified for several assistance programs in recent years, but wanted to see if I could make it on my own until my ex died. I proved that I could. Covid shutdowns helped me to live a very minimalist lifestyle. And when the ex passed, the increase in Social Security really helped. By the way, you are very wise and I respect your input on financial matters!
 
OneEyedDiva said:
Recently I offered to loan my son quite a sum. He encountered unexpected bills after his wife passed and needed expensive car repairs. I paid all his charges (which I put on my cards) in full each month. Racked up some nice reward points. I worked out a 24 month, no interest payment plan for him. I can well afford to help and my son has always been diligent about paying me back on time. He was already under a lot of stress and heartache (well, we both were). I'm glad I could make things easier for him. As it stands now, my personal expenses, including my portion of our carrying charges (aka HOA fees) and utilities only takes up 40% of my net income not counting my investment income, which I don't take distributions from.
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You are a good, kind, supportive mother. Happy belated Mother's Day - I salute you, my friend.
 
StarSong said:
Bingo! 2,633 people surveyed when the US adult population is roughly 260 million? Talk about a small sample. What's the definition of living month to month anyway? No extra money anywhere? No safety nets? A missed month and you're living on the street?

A fuller picture:

A lot of people live "month to month" with few liquid savings during various points in our lives. Did this study consider money tied up in in 401Ks, IRAs, Roths and other accounts people keep out of reach for ongoing expenses?

What about other assets, including home equity? Roughly 65% of Americans live in owner-occupied dwellings, and 34% of our homes are mortgage-free. Some living there may be relatives of the homeowner - elderly parents or children who've yet to launch - but their housing is nevertheless stable, so in reality their "paycheck to paycheck" scenario is a whole lot less dire than it seems.

(This rate of home ownership has remained between 63% & 69% for the past 57 years, which is how long the stats have been available.)
https://tradingeconomics.com/united-states/home-ownership-rate

Studies like this show shocking headlines but the truth is a often much more reassuring than dire. But nobody clicks on those stories.

Of course I realize some Americans literally do live month to month without an extra penny anywhere, but in the US that's the exception, not the rule - and definitely not the reality for 64% of the population. 48% of the population with income over $100K living paycheck to paycheck with no safety nets beneath them is even more unlikely.
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Thanks! A brilliant post.
 
Em in Ohio said:
That was my situation for much of my life. I had people-jobs that I loved, but they paid minimally. Like your example, I was almost always "just over" the ridiculously low income limits to qualify for benefits. I actually could have qualified for several assistance programs in recent years, but wanted to see if I could make it on my own until my ex died. I proved that I could. Covid shutdowns helped me to live a very minimalist lifestyle. And when the ex passed, the increase in Social Security really helped. By the way, you are very wise and I respect your input on financial matters!
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Thank you for saying that Em ❣️ I admire your fortitude during rough times, am glad you saw your way clear when you needed to and are now finding the SS increase to be helpful.
 

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