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Living pay check to paycheck … eh, not so much

Listening to the political and pundit left rhetoric you might conclude that most of America below the billionaire class is living pay check to pay check. In fact, a survey reported by CNN says 78% of Americans claim they live paycheck to paycheck and even worse most of those are in debt too.

No matter how much you earn, getting by is still a struggle for most people these days.

Seventy-eight percent of full-time workers said they live paycheck to paycheck, up from 75 percent last year, according to a recent report from CareerBuilder. CNN.com

No matter how much you earn…” Have you ever read a more ridiculous statement? If you are living paycheck to paycheck no matter how much you earn, you are a fool!”

I don’t know how these folks define living p to p, but to me that’s having no money left on the next payday because the last pay was totally spent on basic necessities like housing, food, clothing, healthcare and transportation. Even that definition has a great deal of flexibility for each expense.

Do most Americans or at least this 78% spend all their money on necessities? The data and common sense indicate otherwise.

There are twenty nail salons, ten tattoo studios and ten Starbucks within five miles of my house. There are ten Chinese takeouts within four miles and nine movie theaters within nine miles. If the above claim of living paycheck to paycheck was accurate, could these businesses and thousands of others around the Country stay in business?

No doubt there are homes in the US where the p to p claim is correct, but there is no way it is 78% of Americans or close to it. A report on CNN.money says 43% of American households can’t meet their basic needs and it also says this:

For instance, in Seattle’s King County, the annual household survival budget for a family of four (including one infant and one preschooler) in 2016 was nearly $85,000. This would require an hourly wage of $42.46. But in Washington State, only 14% of jobs pay more than $40 an hour.

If you were making your case, why not compare the $85,000 with the percentage of workers earning more than $40 an hour in the same county. Low wage workers aren’t driving up the survival budget.

Frankly, I doubt most people know how they spend their money. I am just as certain that most people don’t know the difference between necessities and other stuff. The constant drumbeat of Americans struggling and living p to p is 20% reality and 80% political bombast.

It may be no fun living with necessities only, but it’s better than mortgaging your future.

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5 replies »

  1. .

    I have a friend who always earned more money than me. But while I saved, she spent. Currently she gets more SS income than I do. But she is not able to hold onto money. Besides her house, she doesn’t have a lot of material things. But somehow she manages to squander a lot of money. When she sold her previous paid off house, instead of using that money to pay down her current house, she blew through all that money in only a couple of years and now has nothing to show for it.

    Now she is in the legal bankruptcy process.

    But instead of learning her lesson, she keeps wondering when will she get new credit cards.

    I have tried to advise her that when she does get credit cards again how to handle them [ie, pay them off every month.] But I can tell she is not listening. Just recently she let it slip that she still goes to Starbucks for their expensive coffee.

    .

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  2. The economy is highly dependent on consumer spending. When the inevitable recession arrives, unemployment will spike to 2009/2010 levels, bankruptcies will likely hit all time high levels, and mortgage defaults will likely reach close to historic levels.

    My impression is most people have not changed basic spending behavior since the last recession. I guess you could say their mentality is recession proof.

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      • AARP Foundation says they are helping fight poverty for the 10 million people over 50 that are living in poverty.
        The foundation, which is AARP’s charitable affiliate, is working to end senior poverty by helping vulnerable older adults build economic opportunity and social connectedness.
        Among its points of focus:

        Teaching job seekers the skills they need to compete for today’s in-demand positions
        Developing strategies to help make communities affordable, livable and healthy
        Helping older adults build savings
        Making it easier for low-income consumers to develop healthy eating habits
        Harnessing new and existing methods and technologies to alleviate the underlying issues that can cause loneliness and isolation
        Helping older adults connect — and stay connected — to their communities

        Where is the class on budgeting and getting and staying out of debt? Oh, they do not even address that problem. “Helping older adults build savings” is vague and not the problem, it is incorrecting spending on wants, not needs.
        It is why many are living paycheck to paycheck or SS check to SS check.

        What hat do they pull these numbers from? Not being able to pay your cable bill, eat out or take a vacation is not living in poverty. I went without a home phone for 4 years. I used the city bus for 24 months to save for a down payment for a car. I only activate my cell phone when I go on vacation. American’s are a very spoiled bunch of crybabies.

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      • AARP keeps pushing for bigger COLA instead of helping seniors live within their means. They would be more helpful in helping seniors live life with what they have instead of getting politicians to buy votes.

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