Paycheck To Paycheck workers

[Blue Mountain]

I'm talking about nationally, across the board. The median household income is around $45,000, and has been for several years.

Where I live, people who work in some of these towns can't actually afford to live in them, so they have to drive 20-40 miles one way to work. Gas costs are a pretty big deal when you're spending up to $12 a day in gas. Add to that the fact that the yearly cost of living raises barely cover inflation plus the extra you have to pay into the insurance plan every week, and it is pretty obvious why a lot of people are living pretty close to the edge.

I was about to ask why people were driving 20-40 miles to work, until I noticed your comment about not being able to afford to live in the city in which they worked.

Now here's a strange thing. I have a brother living in Vancouver, which is not a cheap place to live. He's worked a series of odd jobs in the years since the steady job he had disappeared along with the company that provided it. But he's still living in Vancouver and doesn't even own a vehicle, relying instead on public transit to get around.

It it possible the people who are living 40 miles out of town are doing so because they don't want to lower their standard of living? Because they're so caught up in the "I must have a house and back yard" mentality that they can't think of any other way to live?

Part of my reason for asking is because I consider myself to be fortunate. I make better money than the median, live in Winnipeg (which is inexpensive) and have been able to find jobs that are within three kilometres of where I live. In the summer I ride a bicycle to work; in the winter I take transit or walk. So it's really outside of my experience to have to drive an hour or more to get to work. I can walk it in 40 minutes.

 

[Boo]

Esperdrome,


No offense taken. I did not go to college because I could not afford it. I do not own a house, I had bought one but lost it to foreclosure during a nasty divorce. I have worked my entire life in a field that never brought me even close to the median income. Any savings tend to get eaten away not in buying stuff but in covering unexpected expenses such as car repairs, medical bills, etc. If you have two or more events in a short period of time any savings is now gone and quite often there is still money owed after the savings are gone.


As an example, my daughter injured her shoulder. This required multiple visits to the doctor in less then a month, physical therapy three times a week and an MRI. The co-pays for these ate up any extra money in the budget and thus there was none to go towards a saving account. Then she needed surgery, even with insurance it was over $3,000. Two months later my 12 year old vehicle finally died, the tax return that was going to pay off the medical bills now became the down payment for reliable transportation. Six months later, my daughter became ill, again necessitating more office visits with various Doctors and ended once again with surgery. There are still medical bills that need to be paid off and those eat up whatever extra I might have now that could go towards a savings account. Oh and did I mention that my daughter is looking to go to college? We are looking at every means possible to finance this without getting caught up in the student loans trap. This mean filling out quite a few scholarship and grant requests, many for just $1k. It's worth doing because each one she gets is that much less we may need to cover with a student loan.


It doesn't take much to throw a tight budget, even one that includes a savings plan, right out the window.




Boo

 

[Esperdome]

I realize that everyone has certain necessities they must spend money on, food, clothing, health care, housing, etc. If your paycheck is equal to or less than these, you've got a serious problem. But I see co-workers all the time spending money on big screen TVs, chrome rims for their car, dinners out at fancy restaurants, etc. and then complain they can't stretch their paycheck till payday. I'm not suggesting anyone posting here is like that, but it seems a good number of the 40% living P to P match this description.

I'm convinced some people, if you gave them a five dollar an hour raise would still live P to P, they would just have more bling. About 25% of Americans making $100,000 a year are still living P to P. There is something very wrong with this.

 

[jimtron]

I'm convinced some people, if you gave them a five dollar an hour raise would still live P to P, they would just have more bling. About 25% of Americans making $100,000 a year are still living P to P. There is something very wrong with this.

I agree--I think people have a tendency in this consumer-driven culture to spend as much as they have.

 

[Hawk one]

Yeah, this is a problem with several aspects.

Now, personal responsibility is of course a good concept. You take an action, you face the consequences. But, in this case, I think much of the problem is that you need to learn more about the consequences.

Let's talk about the thing most people - especially young people - will do when they get a raise: Spend it. Why? Well, frankly, because I don't know many places that teaches you about personal economy when you're in a period of life where that advice is useful. Sure, they skim over it in school, but humans as a whole won't always pay that much attention to stuff that doesn't affect them here and now. I could envy those people who, when going to the military, have a sergeant or officer willing to offer them the advice they sorely need.

And frankly, some of the smarter lessons are so simple, one tends to forget how to tell them to young people, assuming that "common sense" will take care of it. It won't. In the western world, most people will need 12 years of school just to be able to cope with the world as it is today. We -need- to -learn- about how society works.

So, going back to the example about a raise. How do you prevent someone simply spending it on treats for themselves? I never learned about that in school, that's for sure.

But one possible - and simple - solution is as follows: Once you get a job, open not one, but two (maybe three) bank accounts. One account is the bill account, in which the paycheck directly goes into. Not possible to use except logging into your bank. The other account is the spending account, in which you automatically transfer a certain amount each month. That way, your bills should be easier to pay, (barring you getting an accident in a country with a bad public health system, of course).

And the possible third account is one where you can also transfer some money each month, and never use until a big decision is made. Although not necessary, it can be helping you keeping control over how much money you are able to spend. If you get a raise, then maybe you'll decide to transfer most of this money into this third account, leaving a small amount to spend on extra treats.

It looks very simple, doesn't it? Well, like I said, I found out about this trick pretty much by accident. I'm one of the people who will eventually simply spend my paycheck if left unguarded, but who's capable of keeping things in order now that I have this system. I'm sure lots of other people would as well. But who's teaching them this?

 

[qayak]

I live paycheque to paycheque because I choose to. I make pretty good money, always have, but I spend all of it. I have no savings and no investments but I have a huge wealth of experiences that most of my better off friends lack.

When I was raising my three kids there were some pretty lean times but we made it through with little or no help from anyone. ($1100.00 a month for daycare tends to cut into the pocketbook) I have never been denied things like loans but I was always charge significantly higher rates because I get paid "flat rate" as opposed to hourly and I wasn't married. (4 percentage points is significant in my view.) Consequently, I buy everything cash. The last loan I had was 12 years ago for a new car. Everyone else was paying 7%, I had to pay 11. That's the last time I borrowed anything.

I always have money simply because my income far outweighs my needs. I suppose, if I ever get married, I will regret the lifestyle I have chosen. People tend to look for security in a mate and I am definitely not that!

 

[JoeEllison]

It it possible the people who are living 40 miles out of town are doing so because they don't want to lower their standard of living? Because they're so caught up in the "I must have a house and back yard" mentality that they can't think of any other way to live?

Not really. I'm talking about people living in crappy trailers 40 miles outside of town, because the crappy housing near work costs nearly double. People are driving that far to make $12-15 an hour, in a town where a single-wide trailer can cost you $800 a month. And, there's not much in the way of public transportation, so that's not an option either.

 

[JoeEllison]

I realize that everyone has certain necessities they must spend money on, food, clothing, health care, housing, etc. If your paycheck is equal to or less than these, you've got a serious problem. But I see co-workers all the time spending money on big screen TVs, chrome rims for their car, dinners out at fancy restaurants, etc. and then complain they can't stretch their paycheck till payday. I'm not suggesting anyone posting here is like that, but it seems a good number of the 40% living P to P match this description.

Is it fair to blame everyone for the mistakes of some?

I've seen those people. I've also seen people driving old cars, packing a cheap lunch to work, never buying anything, and still just barely getting by. Getting sick once can wipe out your savings. Getting sick twice and you're screwed.

 

[JoeEllison]

A lot of this conversation reminds me of the idiocy of that Suze Ormon monster. A couple of years ago, she put out a list of things you could do to "save $5000 a year, easily!"

Then she proceeded to list things like "have one less $18 martini per week", and "Have a $120 haircut every 5 weeks instead of once a month". You know, stuff we can all do!

Some people are really, really out of touch with reality... and those are the people who drive our public discourse on these matters.

 

[Roadtoad]

Esperdrome,


No offense taken. I did not go to college because I could not afford it. I do not own a house, I had bought one but lost it to foreclosure during a nasty divorce. I have worked my entire life in a field that never brought me even close to the median income. Any savings tend to get eaten away not in buying stuff but in covering unexpected expenses such as car repairs, medical bills, etc. If you have two or more events in a short period of time any savings is now gone and quite often there is still money owed after the savings are gone.


As an example, my daughter injured her shoulder. This required multiple visits to the doctor in less then a month, physical therapy three times a week and an MRI. The co-pays for these ate up any extra money in the budget and thus there was none to go towards a saving account. Then she needed surgery, even with insurance it was over $3,000. Two months later my 12 year old vehicle finally died, the tax return that was going to pay off the medical bills now became the down payment for reliable transportation. Six months later, my daughter became ill, again necessitating more office visits with various Doctors and ended once again with surgery. There are still medical bills that need to be paid off and those eat up whatever extra I might have now that could go towards a savings account. Oh and did I mention that my daughter is looking to go to college? We are looking at every means possible to finance this without getting caught up in the student loans trap. This mean filling out quite a few scholarship and grant requests, many for just $1k. It's worth doing because each one she gets is that much less we may need to cover with a student loan.


It doesn't take much to throw a tight budget, even one that includes a savings plan, right out the window.




Boo

I'm there, too, Boo.

In spite of making more money than I have ever had, I have significantly higher expenses now.

In trucking, I'm literally keeping two households, one of which needs to be washed every month, and requires additional maintenance that other people take for granted with their cars. An oil change for a truck, for example, can run as high as $300, and you don't even want to ask what happens when I hit 80k miles, and I need a valve readjust. I also need to pay for permits, bridge tolls, etc., and it comes out of my pocket for the most part. Add to that the food I have to buy, bedding, cleaning supplies, personal hygiene stuff, the cost of showers, (yes, unless you have a discount/payback card from the various truck stops, you pay for showers), and Ed knows what else, and you can begin to see where it all goes. You basically pay for the privalege of driving for a living.

Then there's the fact that I'm a company driver. If the company decides they need to work on my rig, I sit. Since I'm paid by the mile, I get paid nothing while they work on the rig. Once I buy a truck, (and I'm still looking at the financing of a Kenworth T2000 through the SBA), things become even more interesting. Even though I'll get some terrific tax breaks, they'll get eaten up with stuff the IRS won't allow to be deducted. (And if we get Hillary in office, I might as well park the truck and continue to make the payments. I'll come out money ahead that way.)

I know this road, Boo. I still don't even have cable, and the only reason I have a cell phone is because I'm required to have one for this job.

 

[Roadtoad]

A lot of this conversation reminds me of the idiocy of that Suze Ormon monster. A couple of years ago, she put out a list of things you could do to "save $5000 a year, easily!"

Then she proceeded to list things like "have one less $18 martini per week", and "Have a $120 haircut every 5 weeks instead of once a month". You know, stuff we can all do!

Some people are really, really out of touch with reality... and those are the people who drive our public discourse on these matters.

Yup, right after I park it for the night, I drop in for a $50 steak dinner and have a couple of $20 Manhattans to wash it down.

Dumb b****.

 

[Blue Mountain]

Not really. I'm talking about people living in crappy trailers 40 miles outside of town, because the crappy housing near work costs nearly double. People are driving that far to make $12-15 an hour, in a town where a single-wide trailer can cost you $800 a month. And, there's not much in the way of public transportation, so that's not an option either.

Yes, paying $800/mo for housing when you're earning $12/hr really stretches the budget.

I'm looking for what may be different between these people and the case I presented earlier of my brother in Vancouver. (BTW, I'm referring to Vancouver, BC and not Vancouver, WA). The main one that comes to mind is children. My brother is unmarried and lives by himself in a third floor walkup in a less than desirable part of Vancouver. I'm sure this is what allows him to make ends meet. Add a kid or two into the mix, and suddenly your housing needs change--and you have to support them too.

I agree with your comment about the lack of public transportation. Even though the city I live in has a good transit network, it doesn't operate 40 miles outside the city limits. Car pooling may be the answer there, but that creates problems co-ordinating people's schedules and lives--all the more so if they're working shifts and not nine-to-five.

 

[balrog666]

I agree--I think people have a tendency in this consumer-driven culture to spend as much as they have.

If you can't "drive" yourself, you're screwed. And most people don't even try.

 

[Roadtoad]

Yes, paying $800/mo for housing when you're earning $12/hr really stretches the budget.

I'm looking for what may be different between these people and the case I presented earlier of my brother in Vancouver. (BTW, I'm referring to Vancouver, BC and not Vancouver, WA). The main one that comes to mind is children. My brother is unmarried and lives by himself in a third floor walkup in a less than desirable part of Vancouver. I'm sure this is what allows him to make ends meet. Add a kid or two into the mix, and suddenly your housing needs change--and you have to support them too.

I agree with your comment about the lack of public transportation. Even though the city I live in has a good transit network, it doesn't operate 40 miles outside the city limits. Car pooling may be the answer there, but that creates problems co-ordinating people's schedules and lives--all the more so if they're working shifts and not nine-to-five.

Been there with that one. Kids require good education, and they need time and a place where they can play safely. Then you add in the transportation costs, and you begin to realize just how tough things can get.

You mentioned your brother lives in Vancouver, BC. Where abouts? My son's father-in-law owns Robbins Trucking on the northern end of the island.

 

[JoeEllison]

Yes, paying $800/mo for housing when you're earning $12/hr really stretches the budget.

I'm looking for what may be different between these people and the case I presented earlier of my brother in Vancouver. (BTW, I'm referring to Vancouver, BC and not Vancouver, WA). The main one that comes to mind is children. My brother is unmarried and lives by himself in a third floor walkup in a less than desirable part of Vancouver. I'm sure this is what allows him to make ends meet. Add a kid or two into the mix, and suddenly your housing needs change--and you have to support them too.

I agree with your comment about the lack of public transportation. Even though the city I live in has a good transit network, it doesn't operate 40 miles outside the city limits. Car pooling may be the answer there, but that creates problems co-ordinating people's schedules and lives--all the more so if they're working shifts and not nine-to-five.

When you have kids, you really try to live someplace better, which means you spend more than the minimum. So, you won't live in the bad neighborhood, in the tiny apartment... which the creeps who blame poor people for being poor seem to expect.

And, too, the schools out there in the sticks aren't as good as the ones where the homes cost $250,000, which continues the cycle.

 

[jimtron]

If you can't "drive" yourself, you're screwed. And most people don't even try.

I think I know generally what you mean by "drive" yourself (be ambitious?), but could you be more specific? One issue is that there are only so many high paying jobs, and somebody has to work the crappy, low paying ones.

In my view it's not right that in a rich country like the U.S., some people work 40 or more hours a week and remain below the poverty line, without adequate health coverage. If you're too lazy to work, I have no sympathy for you. But I do sympathize with those soldiers and school teachers and cashiers that work hard but still have to struggle to pay for the basics.

 

[JoeEllison]

I think I know generally what you mean by "drive" yourself (be ambitious?), but could you be more specific? One issue is that there are only so many high paying jobs, and somebody has to work the crappy, low paying ones.

In my view it's not right that in a rich country like the U.S., some people work 40 or more hours a week and remain below the poverty line, without adequate health coverage. If you're too lazy to work, I have no sympathy for you. But I do sympathize with those soldiers and school teachers and cashiers that work hard but still have to struggle to pay for the basics.

That's my position as well. The common "get a better job" nonsense is hateful and stupid. Someone has to cashier at the supermarket, prepare our food, pick our fruit, and all the other jobs that don't get much respect in this country. Those jobs should simply pay more, instead of people having to work two of them to make ends meet.

 

[Jimbo07]

I've driven myself.

I've got the better job.

We live paycheck to paycheck, because we've decided I should make punishing student loan payments (much higher than the bank would like even, because they'll lose interest in the long run).

I'd do it all again, without hesitation.

 

[jsfisher]

Those jobs should simply pay more, instead of people having to work two of them to make ends meet.

It doesn't work, though, does it? What has raising the minimum wage, for example, ever really accomplished over the long run?

 

[balrog666]

I think I know generally what you mean by "drive" yourself (be ambitious?), but could you be more specific?

Ambition? Yes. Or simply plan for the future, even a little. Control your spending, set goals and pursue them. It's not like anyone is going to do that for you.

One issue is that there are only so many high paying jobs, and somebody has to work the crappy, low paying ones.

It depends on what you mean by "high paying".
Plumbers work around "poop" all day long. They generally get paid well.
And some doctors don't earn squat.

In my view it's not right that in a rich country like the U.S., some people work 40 or more hours a week and remain below the poverty line, without adequate health coverage. If you're too lazy to work, I have no sympathy for you. But I do sympathize with those soldiers and school teachers and cashiers that work hard but still have to struggle to pay for the basics.

As an aside, I might dispute that countries aren't rich; people are but ...

generally, rewards are commensurate with productivity. The application of capital generally leads to greater productivity and greater rewards.

Soldiers? Who get free room and board? Or the married ones who decided to have six kids?
School teachers are unionized, so while proficiency and productivity are not rewarded, they get paid all too well.
And cashiers? In a land of universally bar-coded merchandise, cash registers with pictures of food items, and a trend towards automated checkouts?