“There’s this wild disconnect between what people are experiencing and what economists are experiencing,” says Nikki Cimino, a recruiter in Denver.
“I just made the most expensive purchase of my life and I can’t figure out why I am living paycheck to paycheck.”
Why would buying a house have you living cheque to cheque? Do you think you buy something on credit and then all your income gets taken until it’s paid back? I’m genuinely confused about what you’re trying to say, here.
Also, it’s not like she’s paying for her mortgage in addition to whatever she was doing previously (presumably rent). The mortgage payment replaces your rent payment.
She’s paying like 17-18% on credit card debt that she didn’t pay off because she saved a down payment. This is just financial illiteracy
Honestly, same boat. Our power bill has gone up over 20% this past year like it’s insane. Our grocery costs have easily doubled in that time, too. Like I’m doing the math and seeing the numbers like I’m making more than I was 3 years ago, but I wasn’t living paycheck to paycheck then, and I’m rationing food today.
I also can’t count the number of times prices have gone up on common groceries in the last year. Every time I go in I’m spending more than I did the previous time. And the grocery stores around here have started phasing out their cost saving brands. More and more lately what used to be the expensive brand is the only one left, and I’m paying twice as much for half as much compared to what I was getting before. They’re not even trying to hide what they’re doing.
I’m in this same boat. I get letters from the power company all the time about how I’m using more power than anyone around me. The heat in my place has been kept around 62 all winter, occasionally allowed to get colder. It’s a pretty modern build for a house too. I actually used my PC to heat just my bedroom over winter which should be far more power efficient the heating every room. The letters I get try selling me how I need to or could be more efficient like genius ideas like “turn down the thermostat”… its already nearly almost off, just enough to make sure pipes don’t freeze.
Only thing that really changed was they installed a new smart meter last fall, of which I had no say.
it’s* already nearly almost off
To anyone struggling in the USA and wondering how to possibly get out, just live like Congress and become rich. Then, money problems are way easier to handle. If you have as much money as a Congressman, you will be equally as unconcerned with them as to the state of our union and you will be able to say things are great with a straight face.
Not even.
All you really need is wealthy parents. That way you never have to have any debt and get exploited by the credit system and can live your life glib and clueless and wondering why other people are so lazy and poor and didn’t work hard like you.
There’s a term for this, HENRY. High Earner, Not Rich Yet. The lie is the “Yet”. Millennials and Gen Xers have been struggling to reach the middle class that is kept perpetually out of reach. They have given up on the idea of financial solvency and are going into debt to indulge in luxuries like having children, going on vacations, and living somewhere that isn’t a complete shithole. Saving for retirement is as realistic as training to live on Mars, so why bother? Keep digging a financial hole and then lie down and die in it.
What most people don’t realize is that once you have excess income, you have options. What you do with the excess is what matters. If you don’t save and invest it, you’ll be living paycheck to paycheck for the rest of your life.
A lot of folks think being rich means just spending money on whatever you want. That’s not really the case. If you spend the excess on fancy cars or luxury items that make others think you’re rich, the irony is you’ll be working for a long time and never actually become financially independent.
Edit: well, if I’ve learned anything from this comment, it’s that everyone on Lemmy identifies as a HENRY with bad spending habits no matter how much money they make. Or, at least a temporarily embarrassed one.
The problem is that for many folks the amount they are making isn’t enough for them to live a very reasonable life AND they have nothing to invest in the first place. Suppose a household in a given area needs $100,000 to afford a VERY modest house in that area, health insurance, savings, healthy food etc. Now suppose the house has one disabled breadwinner and one fellow working for $40,000.
Because of this they live in shit town in a tiny apartment a building full of drug addicts in a not so great part of the state wherein the average life expectancy is about 10 years less than one of the good parts of the country.
The first 40k of “excess” would be spent on having a decent life, working a sane number of hours, moving into an actual home. For fully half the country the idea of having excess is laughable. It’s a crass joke.
Most areas don’t need $100,000 a year to afford a “very modest house”, you could get a nice mobile home and afford to pay off the loan in just a couple years.
the areas where most people live, however, do.
nobody wants to live in trailer park in Mobile, AL.
Everybody wants everything at no cost. That’s not how the world works, though. If you earn $X a month and want to save some of it as a long-term investment, you simply cannot spend $X a month. You can’t have both.
There are indeed some people who have no choice but to spend $X a month, their basic expenses just can’t go any lower without literally ending up on the street or straight up dying. Those people do have a real problem and I sympathize with them.
People who say “I want to save money but I also want to live in the nicest possible house in the nicest possible neighborhood” I have less sympathy with, because they have a choice. I face that choice myself and instead of griping about how I can’t have everything I want with no sacrifice I just go ahead and make the choice. I don’t spend all my money each month, and as a result I don’t take vacations as nice as I could take and I don’t have as nice a car as I could have. But in exchange for that I’ve got plenty of savings built up.
Except that’s not at all what OP said or was implying. Nice way of pushing the blame on the people affected rather than the broken system we live in.
Most people are struggling with the basics, not disputing that. But, then I wouldn’t consider those people HENRYs.
When I look around, I also see a lot of people with high income making boneheaded moves like buying expensive vehicles, renting luxury apartments, etc. For some people the problem isn’t the system, it’s their own lack of self-control or planning. If you’re making $200,000 and still feel broke. Maybe that $1,500/month car payment was a mistake. Maybe you shouldn’t have used the raise to move into a luxury apartment building.
When I was starting my career all my coworkers lived in $2200/month luxury buildings. I knew we all made roughly the same amount of money, so was shocked that they would pay this much for rent. Meanwhile, I sought out roommates and paid $650. With the money I saved, I paid off my student loan debt aggressively. Now all these people are struggling to get to the next step in life. Yeah, I could’ve seen that coming 10 years ago for you.
I see the same thing with cars. Everyone wants to own some luxury SUV. And, they make fun of me for driving a Prius. I won’t be surprised in another 10 years when they’re still struggling.
This isn’t an attack on people who don’t have the money. This is an attack on people who do and can’t plan well, but then act surprised when they’re broke still.
I don’t make 200k, but together with my wife, we make a little under that. We both have cars, and both are paid off. I still have the first car I ever brought, which is a Nissan Sentra 2006 basic model. So, 17 years on the same car and hers is a 2015 Toyota. We do have 2 kids and brought a house in 2015. The last 4 years have been almost impossible to make ends meet, and all we try to do is survive with the very occasional do something for the kids. I have tons of housework I can’t do but also can’t pay for either. Because of this, we also can’t move until it’s taken care of, so we’re kind of stuck here as well. We have no money to save or invest. Did we make some bad decisions? Sure, probably shouldn’t have had kids for starters. They cost a fortune. But my point is we aren’t doing anything crazy here, it’s just that more and more things are taking our money and prices also went up. It sucks because all I want to do is live and get by, I don’t really have any grandiose dreams of doing crazy things or buying tons of stuff. I just want to get by as my parents did, which seems impossible today.
Even if you do nothing, if you don’t get into debt, you will have millions in equity in the house when it’s paid off.
You’ve basically invested into real estate so you’re saving money even if it doesn’t go into your savings account.
We purchased the house for around 300k, and even with the market today, it’s about 500k. Sure, it could go for higher whenever we do sell, but it’s not an investment. With our current loan we will have paid over 500k over 30 years, so I really am not expecting to make out from this. The only way this makes me money is when I retire (which is close to payoff anyway) and move someplace way cheaper than we’re we live now.
You’re going to pay it off in what, like 25 years? Yeah, it will be worth over a million by then.
My dad bought his house for $600,000 in 2008 peak, and it is now worth maybe 2 million. It hasn’t even been twenty years and it’s more than tripled, despite being underwater on the mortgage in 2009 (owed more than market value)
This is really stupid.
You’re basically telling people “just be rich” like it’s that simple.
People living paycheck-to-paycheck are not able to invest money because they don’t have excess income, they get to decide if they want to pay for rent or want to pay for food. Combine that with astonishing inflation rates and salary raises that don’t match cost of living increases or simply layoffs, and we have one fucked up situation.
This is a systemic problem. Billionaires shouldn’t exist. Billionaires are a societal problem.
edit: Oh, I see your comment isn’t directed at people living paycheck-to-paycheck, that’s a bit more reasonable then but I still think you’re missing the mark. It’s not as simple as “just increase your income” like you seem to be thinking it is.
because it is that simple.
be rich or forever be poor.
this is the system we have setup and the system that we worship.
If you don’t save and invest it, you’ll be living paycheck to paycheck for the rest of your life.
I don’t think you really know what “living paycheck to paycheck” actually means if you think it, in any way, involves investing.
I think his point is people are only living paycheck to paycheck out of choice when they could save and invest if they tightened their belts.
Not saying I agree, just explaining his perspective.
There are peple who are genuinly struggling.
Then there are those who choose to spend 10-20K on vacations every year and ‘feel’ they are struggling.
And these latter people will forever tell you how they are living ‘paycheck to paycheck’ and talk your ear off about how theri struggles are more genuine and ‘real’ than people who are actually poor.
You can have very high income and still live paycheck to paycheck if you spend every paycheck
“living paycheck to paycheck” generally means that all money is spent on living expenses and there is very little, if anything, left over. If you have any appreciable discretionary income, you are not living paycheck to paycheck.
Tell that to the people who make 150K and spend 200K a year.
Hint: they dont’ give a shit what you say.
Her mortgage is $1650/mo, which is incredibly reasonable in Denver. I think this specific person’s problems have more to do with her recent divorce. She was used to splitting costs, and probably spent quite a bit on the divorce itself
…that’s more than I’d make with minimum wage in my state, which I don’t think is that far behind colorado. Yikes.
ETA: ok nvm I did math and if you make a little over $10/hr 40 hrs a week, your entire paycheck would go just toward that.
You’re still off unfortunately.
Full time at $10/hr is $1600/month before income tax. For simplicity, we’ll say federal+state tax is 15% so now we’re at $1360. Social security is 6.2% so take away another $100.
Then, of course, this is the United States where most people have to rely on their employees for “affordable” health insurance - and often still have money taken out of their check for it.
So now we’re at $1000-1260 monthly take home pay for a full time job at $10/hr
The standard deduction is $13850 so there’s no way you’re paying 15% tax on an income of $20,000
You’re paying about a little over $600 federal plus whatever state tax and usually state tax is less than federal, but depends on the state. In some states you don’t pay state income taxes.
So best case scenario you pay a little over 3% federal and no state.
That person is a deluded Trump voter with zero financial skills and shit loads of bad debt. Of course everything is bad in their life.
