
Living paycheck to paycheck is disturbingly common - petethomas
https://www.washingtonpost.com/business/2018/12/28/living-paycheck-paycheck-is-disturbingly-common-i-see-no-way-out
======
perfmode
Don’t discount the weight of emotional trauma and the self-sabotaging habits
it has the potential to engender.

Most people are slaves to their limbic systems.

Most people don’t have self-education or resources to seek the help they need
to fix these underlying problems.

Society does them no favors. Media and advertising are designed to promote
consumption. And not even healthy consumption.

The idea that we are black boxes with private worlds and perfect agency is
being eroded by the empirical evidence that, at scale, we are ultimately
manipulable.

I know because I wrestle with this constantly. My higher self knows what’s
right and how I should spend my time and money. On a daily and minutely basis,
my lower self vyes for control and often succeeds in taking the wheel. And I
have to catch myself and recognize when my long term efforts are being
subverted automatically and mechanistically.

I know that, over the years, my unaddressed early childhood traumas have
compounded into deeply-ingrained habits of self-medicating.

It’s a constant struggle.

I am not surprised that there are huge numbers of people who struggle
similarly and are not as successful as I am at managing this internal
conflict.

edit: why is this article now flagged? :(

~~~
leoedin
I think the very fact that people in wildly different circumstances are living
paycheck to paycheck is a huge flag that this isn't as simple a problem as
"they don't get paid enough".

Income and expenses are intricately linked by psychology. It's almost
irrelevant what your paycheck is, if you're prone to this problem then somehow
expenses will always rise to meet it.

If expenses weren't actually determined by paycheck, the number of people
living paycheck to paycheck would be a really small number. Everyone else
would either be building a surplus each month or going further into debt.

~~~
moorhosj
Huge difference between living paycheck to paycheck because you struggle to
afford basic necessities and living paycheck to paycheck because you took out
too large of a mortgage. In one case you have an asset to sell if needed.

~~~
HarryHirsch
The trouble is, in America the bigger mortgage often comes with a better
school district.

~~~
dragonwriter
> The trouble is, in America the bigger mortgage often comes with a better
> school district.

That's because our metric for school and school district quality largely is a
measure of effects of socioeconomic status of the students, not anything the
schools actually produce. So, yes, the schools in areas that have a higher
buy-in cost have better marks, because they have on-average students better
set-up for success.

That doesn't mean the students in that district, if individually moved to a
different district, would do worse, it just means that the students who would
do worse independent of district are lesd likely to have parents that can
afford to live in the “better” district.

~~~
danieltillett
It is actually more due to the students who are not there. Yes it is true that
the actual teaching is little better between districts, but the number of
disruptive students that prevent any learning is vastly less in the expensive
districts.

If you have the ability to kick out any student who is disruptive you can turn
any school in any area into a high quality school.

~~~
dragonwriter
> the number of disruptive students that prevent any learning is vastly less.

The evidence doesn't really support that, though; students in a “bad” district
don't have worse performance than students with similar background in a
“better” district (whether because of distraction or any other reason),
“better” districts just have more students with backgrounds which are
correlated with educational success, of which the strongest factor is parental
education.

~~~
HarryHirsch
The OECD report (this one:
[http://www.oecd.org/education/school/programmeforinternation...](http://www.oecd.org/education/school/programmeforinternationalstudentassessmentpisa/35920726.pdf))
would like you to believe that student background does not determine student
performance. They do find a correlation, but it varies substantially between
countries, suggesting that other factors are at play.

According to that report the important factors are student and teacher
discipline and school atmosphere, and on can easily understand why all of
these might be better in an affluent suburb.

~~~
pkaye
In my city, there are 5 high schools in different parts of the city. There is
a huge difference between the rankings of 2 schools compared to the remaining
three. Funding and teacher pool are pretty much the same source. The main
difference is the students and their families. The parents in those areas are
well educated and have high income. If anything the best performing schools
looks like a dump compared to the 3 lower performing ones. I'd say student
background plays a huge part on their performance.

------
sputr
Most comments in this thread are about learning to budget/control finances.

I would just like to point out what I call "The IT bubble". We all make money
here. Most of us make good money. Our social circles are filled with people
making money.

Most people do not have this privilege. Below a certain threshold there is no
such thing as budgeting/finances. It's just survival. You're not gonna budget
because you can't save enough to do anything real with it, so you use it to
make your life just a little easier. In my country (Slovenia, aka. EU member
country) over 70% of people make less than the "average pay" and most of those
make minimal pay.

At least here the problem isn't financial illiteracy. The problem is that they
(a) make way too little to live off and (b) worker protections have eroded
past any sane point.

~~~
lr4444lr
Most of us didn't wind up in IT by random accident though: the prudent
behavior of our parents fostered an appreciation of a value system that
ultimately leads to life comfort, including the discipline to forego short-
term pleasure in order to obtain it. These are educable elements that COULD be
instilled in schools if teachers weren't hamstrung by administrators,
politicians, and parents allowed to second guess their every move.

~~~
sputr
Unfortunately "just learn to code" which is what I understand your argument
boils down to is, in my experience, false. I've mentored many young adults who
mostly had zero IT experience and were looking to break into the field to do
exactly what you're suggesting. A lot of them succeeded. But a lot of them
didn't. And not just because they "were not good/smart/hardworking enough",
but because they were people whose personality was incompatible with IT.

IT isn't for everyone nor should it be. What would the world look like if
everyone worked in IT? Well our paychecks would be a lot lower for one.

------
SmirkingRevenge
As someone who didn't learn the very basics of personal finance at the optimal
point in life, I feel like it should be part of our standardized education.
I'd like to think that would make things at least marginally better.

Another thing I'd love to see, would be for banks to fundamentally reorient
themselves to be their customer's advocates/financial guardians, instead of
being yet another party encouraging people to borrow more than they ought to.
Wishful thinking, I know. My bank knows how much I make, it knows how often I
get paid, it knows how much I spend and on what - they have all the info they
need to develop a plan to ensure my financial security and advise me where I
can do better. Why don't they and why isn't it a standard part of opening
account(s)? I'd love to see more innovation around encouraging proper saving
habits and budgeting, like what simple.com is doing - but it needs to go even
farther than what they currently have, IMHO.

~~~
mac01021
So, when you log into the Bank of America website, you want to be greeted
every time with things like the following?

"Dude, maybe you should sell this car that you're paying $450 per month for
and get a $7000 used car."

"Did you know that between starbucks and happy hour you spend an average of
$120 per week, and that amounts to 10% of your take-home pay?"

"You currently spend $2500 per month on rent. If you downsize from 2 bedrooms
to 1, you can save $X over the next 3 years."

~~~
anigbrowl
An automated fiduciary would be a huge boon, the robotic equivalent of a piggy
bank. But it should be client side; it's role is to screen you from from being
exploited by those who you do business with, including your bank.

~~~
pixl97
>But it should be client side

This too will be co-opted by the greedy who look to profit in the short term,
even if just to profit in the app. The boom bust cycle just shows up too many
times in history not to be caused by a failure in the human psyche.

------
wonderwonder
Its much harder (not impossible) to attain wealth if you don't come from at
least an upper middle class background. Having a safety blanket (family) that
can support you if you fail allows you to take greater risks in the pursuit of
greater income, including starting a business. If you fail, worst case you end
up in your childhood bedroom as opposed to on the the street. If your parents
are able to pay for your college tuition, you are provided with a much
stronger launch pad.

Many (most?) people are not taught financial responsibility and how to budget
or run a household in school or at home, I believe that it is this lack of
knowledge that really inflicts long term harm and feel that it should be
required in both high school and college. My parents never knew how to manage
money and so I never learned. I am taking the time to educate my self now, but
you never even know you are missing out until life hits you in the face one
day.

The greatest indicator of where you will end up financially continues to be
where you started from.

~~~
nunez
> If your parents are able to pay for your college tuition, you are provided
> with a much stronger launch pad.

Ain't that the truth. I've spent 10 years at ~$1300/month paying my student
loans down. I'm two years from done, but that would have been half a mortgage
paid off! To be fair, though, I knew squat about personal finance coming out
of college, so I probably would've burned the money some other way.

~~~
ohithereyou
Quick back of the envelope calculation ($1300/month * 12 months/year * 12
years = $187,200) shows part of the problem - either college should not be
necessary (we need a programmer's guild) or the cost of college is way too
high.

~~~
walshemj
_guild_ ? you know that historically they where set up to restrict access

~~~
Aeolun
And keep up standards. I personally enjoy the idea of having apprentice,
journeyman and master programmers.

~~~
walshemj
All good if your Dad is a Guild Member not so much if your an immigrant for
example.

------
apo
_National data on the paycheck-to-paycheck experience is flimsy, but a recent
report from the Federal Reserve spotlights the prevalence of extra-tight
budgets: Four in 10 adults say they couldn’t produce $400 in an emergency
without sliding into debt or selling something, according to the 2017
figures._

This quote links to a report from the Federal Reserve, which contains this
gem:

 _When asked about their finances, 74 percent of adults said they were either
doing okay or living comfortably in 2017—over 10 percentage points more than
in the first survey in 2013._

[https://www.federalreserve.gov/publications/files/2017-repor...](https://www.federalreserve.gov/publications/files/2017-report-
economic-well-being-us-households-201805.pdf)

In other words, the survey finds tat 4/10 people can't cough up $400, yet 3/4
say things are fine for them personally.

Later in the report:

 _To assess actual financial literacy, respondents are asked five basic
questions about finances (table 34)._

The most missed question (42% of responded answered correctly):

 _Considering a long time period (for example, 10 or 20 years), which asset
described below normally gives the highest returns [Stocks, Bonds, Savings
accounts, Precious metals]_ [Correct answer is Stocks]

I suspect that the view of things being fine financially may be a case of
ignorance is bliss.

~~~
demarq
Also just not having a plan. I can usually tell how I'm doing by looking at my
financial goals and comparing them to what my numbers are.

Goals force you to think beyond paying for your cable subscription!

------
esotericn
I'd like to read more about the history of the people in the article.

The biggest issue as far as I can tell is that it's easy to 'lose' at any
stage. You can make a ton of decisions starting from about age 15-20 that
influence your degrees of freedom at age 40 (in the article there's a family
of 3 that seemingly have little savings, for example).

If you were born to a non wealthy household, the reality is that you simply
don't get to go through life not focusing on money. Your income, investments,
and career have to be at the forefront of your mind, always. And even then
there's a ton of chance involved.

~~~
DonnyV
^^^ This 110%. I grew up in a poor family. Had friends that were well off and
didn't have to think much about the future. I noticed early on that I just
didn't have that luxury. Fortunately I was aware enough at an early age that
every decision I make has to be a good one. I can't afford any failures. I
don't think thats a good a way to become an adult or raise a society. By 25 I
was at a good place but not without issues. I was having multiple anxiety
attacks and all kinds of health issues. I made it out but with scars.

There has to be a better way.

~~~
heavenlyblue
I'm 27.

You know, it's funny - most of my friends who were "well enough" are the same
ones who'd blame people for not working enough thus not being "successful".
Modern conservatives, if you like.

Nah, I am well enough because I was intelligent enough to see beyond the
horizon of my abilities back then (you could also say I was idealistic enough
to be reckless and believe in that distant future).

Most of the poor people of my background never had that chance, to see beyond
that horizon. They gave up earlier than they should have - but can you blame
them?

Because as I've already said in my first paragraph those who are "well enough"
in the first place, today are as blind to their privilege as much the poor are
blind to what they could have if they worked enough.

I am in a good place now. Probably even better than those who were "well
enough", but the price for that is the realisation of how lucky I am and how
much I wish the world wasn't this way.

------
zeta0134
One of the simplest and most effective things I did recently was to split my
bank account into two checking accounts, and one savings account. I carry two
debit cards with me that are visually distinct. One is for day to day
purchases, and the other is meant for bills and the occasional unusual
expense, like maybe tools for a surprise home repair.

Each time I get paid (every two weeks) I have my employer deposit the sum into
the bills account, and I've set up a recurring transfer on the same day into
the spending account. I essentially _pay myself_ a portion of my paycheck. I
allow myself to swipe my spending card for just about anything: gas, eating
out, games, clothing, etc. But if I decide to use my bills card, that's a
conscious choice. I _know_ , right there in the moment, that I'm breaking my
own rule.

It's _kinda shocking_ how effective this was. Once I had enough of a mental
barrier to make me aware of my spending habits, I suddenly felt like I was in
control. Once I had a significant buffer built up in bills, and could start
reliably skimming the extra into savings, all the financial stress also
started to melt away. "It's okay. I've got a bit of a buffer if stuff goes
wrong. _I can do this._ "

~~~
Johnny555
Carrying a debit card (at least by the american definition of "debit card",
other countries may have more sane CC security) is a risk in itself -- if you
lose the card (or just the number), then your bank account can be wiped out
before you can stop it, then you'll start bouncing checks.

And since you have a card for each account, they can wipe out your savings
too, making it harder to replenish your checking account.

You'll most likley get the money back, eventually.

I carry only an ATM card (PIN required), no debit card that debits directly
from my bank account.

(note that this isn't just a hypothetical vulnerability, my company had to
give a paycheck advance to an intern who lost her debit card in a bar, had her
account wiped out and couldn't get money back from her bank in time to make
rent)

~~~
NightlyDev
Debit cards are quite secure, at least here, but we're many years ahead of the
US when it comes to credit/debit cards.

The magnetic strip is never used(haven't been used the last 10 years, at
least), a PIN is always required at PoS and for many issuers an electronic
multistep authentication process is required to order anything online with the
card.

And if something still where to go wrong then you'll get your money back.

~~~
Johnny555
_And if something still where to go wrong then you 'll get your money back._

Well... most of the time, unless the bank claims it was your fault because
chip-and-pin is infallible... then you have to fight the bank for your money.

[https://www.thisismoney.co.uk/money/saving/article-2215223/V...](https://www.thisismoney.co.uk/money/saving/article-2215223/Victim-
chip-pin-fraud-Its-YOUR-fault-insist-banks.html)

~~~
graeme
Interesting. Had atm fraud in brazil from my canadian chip and pin card. No
issue getting the money back.

------
ckdarby
People rarely give the full picture of their situation in these articles.

What an amazing time we live in where with just a name you can track down
people's LinkedIn, their general location, etc.

The couple in the article have just made financial decisions that are simply
put, shitty.

I assumed both pairs didn't have anything sorted out until they were 30 and
outside of extreme medical debt, gambling debt, etc couldn't find out how
they're living pay to pay without sheer irresponsibility.

They're living in a place they can't afford. They need to get rid of their
second car or work with the flexible schedule the SO has to drive him to work.

Lani needs to pick up another gig, she explains the work isn't consist, great,
Uber the hours you're missing.

These articles remind me that we are our greatest enemy, not the situations
we're put in but how we function in those situations.

~~~
metabagel
"I assumed both pairs didn't have anything sorted out until they were 30"

I think it's the norm for people not to make much money in their 20s,
particularly in southern California.

~~~
lotsofpulp
There is plenty of opportunity to make money in 20s though, so I can only
blame a lack of research (assuming one knows how to read English and has
access to the internet).

If you’re smart, you can go the MD or STEM route and end up in tech or
finance, or if you can get into a target law school that feed into well paying
NYC/SF firms. If you can’t do that, then electricians, plumbers, and mechanics
make a decent amount starting very young. If you give up your 20s in SoCal,
you better be doing something to hit the ground running fast with $150k+ pay.

However, if you sacrifice your 20s obtaining skills no one wants to pay for,
then yes, you will not make much in your 20s.

~~~
metabagel
"If you’re smart, you can go the MD or STEM route and end up in tech or
finance"

These typically entail large student loans, which make it difficult to save
much in one's 20s.

"If you can’t do that, then electricians, plumbers, and mechanics make a
decent amount starting very young."

These are good options, but realistically there are only so many of these jobs
to go around. They also require vocational training, which costs money, or the
good fortune to obtain an apprenticeship.

"If you give up your 20s in SoCal, you better be doing something to hit the
ground running fast with $150k+ "

Most people will never achieve that salary in their lifetime (speaking in real
terms).

~~~
lotsofpulp
That’s my point, if you’re giving up your earnings in your 20s, you better end
up an MD, or FAANG, or a high paying finance/law firms. If that isn’t your
trajectory, and you don’t have a trust fund, then you should expect a tough
cash flow situation, especially if you’re accumulating debt, and giving up
$50k+ per year for 8 years.

Unfortunately, I don’t know the situation the trades are in from firsthand
experience, but from the contractors I hire, they are constantly jacking up
prices due to lack of licensed workers, so even if it’s not sufficient pay to
entice enough people to do the job at this moment, I would say the future
looks good for them.

If that’s not doable, then unfortunately SoCal, and CA in general, probably
isn’t an economical place to live in the long term. Just like living in
Manhattan or London or SF is a luxury, so is a desirable location like CA.

Edit: I’m not saying this is ideal, but that is the advice I would give to
someone at the start of their life deciding on whether or not to live in
SoCal, even if they grew up there. Perhaps the situation will reverse once all
the people who are willing to suffer through the living conditions that lower
paid positions offer, but I don’t see the situation bettering itself before
that happens and the supply curve for labor shifts enough to force living
wages.

~~~
slow_donkey
You're probably talking about LA when referencing socal, but San Diego is
reasonably affordable if you live in the right places (aka not downtown/la
Jolla).

------
spoonie
I think housing costs are a big part of this. Things are almost perfectly
stacked in favour of current property owners: oppose any new housing
development near you which keeps land prices and rents high, while those
wanting to buy or rent can’t or don’t vote and can’t as easily encourage more
building as current owners can discourage it.

And it’s so simple (not easy, but simple) too: build more to reduce housing
costs which is effectively a raise for most people. We’d need to stop treating
housing as a primary investment vehicle though.

~~~
opencl
How many places does this really affect? I see people in California
complaining about it constantly. It is certainly not a problem where I live.

Take a look at the NAR's housing affordability index[1]. Basically 100 means
the median family income is exactly enough to quality for a mortgage on the
median home price, higher is better. If you look at the HAI by metro area
there are a very small number of places where the index is below 100, and
almost all of them are in CA. The vast majority of cities seem to have
reasonably affordable housing.

[1] [https://www.nar.realtor/research-and-statistics/housing-
stat...](https://www.nar.realtor/research-and-statistics/housing-
statistics/housing-affordability-index)

~~~
lukas099
Is qualifying for a mortgage on a house really the same thing as affording it
though?

~~~
opencl
Considering that the usual qualification for getting a mortgage is that
payments can't exceed ~30% of your income, yes. They are at least not too far
off from each other or tons of people would be defaulting.

------
Jerry2
Check out this graph "The erosion of the minimum wage" from The Washington
Post as well:

[https://pbs.twimg.com/media/DvbrUVCVsAM25XX.jpg](https://pbs.twimg.com/media/DvbrUVCVsAM25XX.jpg)

You need to do 47 hours of minimum wage work today to get the same amount of
purchasing power as 40 hours of work in 2009.

~~~
sethammons
That's interesting. Related to the erosion of minimum wage, my brother's mom,
when she was around late teens or early twenties (so, around 40 years ago),
was able to rent a beach view place in Newport CA with her friend. They both
worked part time at Burger King. There is no way that could happen today

------
tombert
2016 was probably the worst year of my life, and not for just political
reasons.

I had gotten to a point where I had been living paycheck-to-paycheck for about
two years, and the company I worked for went bankrupt due to the CEO running
away with all of the money that was supposed to be used for our paychecks
(yes, really), leaving me jobless and broke.

I wasn't good at saving money, and I got debt collectors coming for back
credit card debt, and a lawsuit from my landlord because I wasn't able to pay
the rent, all culminating with me bursting into tears at the airport because I
realized I didn't have enough credit left on any of my cards to pay for the
hotel pre-bill for the interview I was flying to at Amazon.

Fortunately I was able to find another job, and my wife and I set some ground
rules about saving money and paying off debts, and since then I've been able
to save enough money to have a down payment on a house, and even though I
still use credit cards, I treat them like glorified debit cards, and rarely
keep the balance higher than $200.

=====

It's easy to get into an unmanageable cycle of debt when you live paycheck to
paycheck; fortunately this happened early enough in my life to where I was
able to learn my lessons early enough to keep a buffer of money in case the
worst happens. I feel bad for people when this stuff happens, since I wouldn't
wish that level of depression on anyone.

------
scarface74
If I took a job at a unprofitable startup that was VC backed, I would
understand the risks and ask for the appropriate compensation and have a
larger cushion than normal. On the other hand, the only reason for working at
a government job is short term stability - you “know” the federal government
has access to capital to pay you and the long term stability of pensions,
lifetime healthcare etc.

But now, on the federal level, you have a president who is shutting down the
government over a $5 billion dollar “wall” that everyone in the know is saying
won’t be effective - including John Kelley. On the state level, pensions are
in danger because of politics, the voters, and the unions.

On the bright(?) side, at least it seems like banks and credit unions are
willing to work with people who are affected by the shutdown. I’m sure they
wouldn’t be willing to work with someone who couldn’t make a payment because a
startup couldn’t achieve “product market fit”.

------
tjr225
"They work in big cities and rural towns. They’ve tried to save — but rent,
child care, student loans and medical bills get in the way."

Yikes. I'm not exactly living paycheck to paycheck, but I can relate to this.

It's really funny - my wife and I make quite a bit of money - whatever twisted
form of capitalism we currently live in has been designed in such a way to
extract most of it away from us. One begins to wonder what the point of going
to work and earning money is other than to line the pockets of corporations
that have effectively taken ownership of our government.

~~~
wccrawford
It's human psychology. Below a certain level, your mind will simply talk
itself into spending your available money to make you happy.

You don't need that car. A car half the price would have been plenty good
enough. But you did it anyhow.

You don't need fancy breakfast cereal that costs twice what the generic stuff
at Aldi costs.

You don't need all those electronics and toys. You don't need to eat out that
much.

If you made less money, you'd do less of the above right until you simply
couldn't afford any of it.

And you'd continue to be about as happy as with all that money, assuming you
were still paying for the necessities.

I'm not trying to convince you to give up those fancy drinks. I'm just
explaining that you _could_ choose to live more frugally without almost no
repercussions, but you won't.

~~~
wutbrodo
I decided in college that a 40 hr workweek wasn't the optimal amount for me.
I've since learned that for white-collar jobs, employers really really want
full-time employees[1]. My way around this was: consume as if I made ~half as
much and take extended sabbaticals. The final piece in the puzzle was ACA
exchanges, as I can now get stable (though expensive and high-deductible)
health insurance while unemployed.

This obviously isn't a binary, but I've been consistently fascinated with the
inability of the people I know (generally middle- to upper-middle class) to
shift their consumption downwards to meet a goal. Not everyone wants as much
leisure time as I do, but I know tons of people with all sorts of reasons
they'd like to save more, and every one of them consumes more while making
less than me (when I'm working). I used to think the issue was that I grew up
without a lot of disposable income, but now I know people with similar
backgrounds whose floor on consumption rises in lockstep with their income.

That is to say, I don't disagree with your analysis here, but for God's sake
_why_ do people do it?

[1] Contracting is obviously possible, but it often constrains the type of
work you can do.

~~~
Aeolun
Because there is a lot of things I would like to buy now that I have no money
for?

My ideal doesn’t change when my income rises, I’m just finally able to pay for
the things I’ve wanted all along.

At least, that was true before. I guess I’m finally at a level where something
remains for saving.

~~~
wutbrodo
Well, obviously. If what you want to spend your marginal income on is more
consumption, that's completely reasonable. There's no accounting for
preferences. That's not what I, the article, or anyone else in this thread is
talking about though.

Note that I'm also talking about a _floor_, not about discretionary income.
What you consider "must-have basics" is different from what I would consider
to be so, which is different from what a billionaire or a villager below the
global poverty line would. To some degree this is normal, but the degree to
which it gets in the way of the other goals of the people I'm talking about, I
don't understand it.

I'm specifically talking about the many, _many_ friends of mine who have goals
other than immediate consumption, and for whom immediate consumption is
preventing those goals even when those other goals are higher-priority. Yes, I
know revealed preferences are a thing, but in extremis the concept relies on a
completely unrealistic Homo Economicus model of people. Hyperbolic
discounting, innumeracy, an innate desire to keep up with the Joneses even
when you disavow any such desire: these are all surely contributors, but I
guess I'm surprised at the degree to which their sum skews consumption
behavior.

------
anoncoward111
Not even 200 years ago, most people exchanged labor for food. Currency was not
used, as you most likely lived on the farm you worked for.

There was no form of advancement to be seen, but also no rent, student loans,
medical bills, child care etc.

There was also no Whole Foods or freedom of speech.

But how much farther have we really come in 2018? We have more things, but if
you stop working, you will starve or go ill just as quickly as an Irish
laborer in 1850.

~~~
elif
Definitely true in america. In countries such as the netherlands, if you lose
your job, you get up to 38 months of 70% salary, rent benefits, child care
benefits, and of course your illness will still be treated.

~~~
anoncoward111
In the USA, many states will allow you 50% income for 6 months, and
potentially Medicaid for health treatment.

This isn't much, but I was speaking in more general terms of "what if someone
permanently decides to stop work."

~~~
Raphmedia
> But how much farther have we really come in 2018? We have more things, but
> if you stop working, you will starve or go ill just as quickly as an Irish
> laborer in 1850.

In the province of Canada that I live in, you get $650 - $800 a month as a
single adult if you stop working and enter the system. You are allowed to work
on the side and gain up to $200 extra a month.

If you managed to get in the social housing program, you also get housing that
is capped at 25% of your income along with free electricity and water. Some
also offer internet and tv at a reduced price.

For reference, my 4 rooms apartment's rent is 675$/month.

------
cagenut
the trifecta of: student loan debt + mortgage debt + employer based health
insurance, is clearly just a bundled and packaged form of indentured
servitude.

~~~
simonh
The first and last yes absolutely, though aim a conservative Brit and how
Americans reconcile themselves to your health insurance (or lack of it) system
really baffles me.

Mortgages aren’t as clear cut. Our mortgages have been the backbone of my
family’s current financial security. After all the idea is at the end you own
your house. Interest only mortgages not so much of course and it requires that
the house ends up being worth the cost, but I’m talking about the general
case.

~~~
digianarchist
Student loan debt is also not nearly as burdensome for the borrower in the UK
has in the United States.

The UK basically operates a graduate tax system [1].

[1] -
[http://www.bbc.co.uk/newsbeat/article/28418590/understanding...](http://www.bbc.co.uk/newsbeat/article/28418590/understanding-
student-loans-how-exactly-do-they-work)

------
throwaway10711
> “My husband is a Park Ranger in the Great Smoky Mountains National Park, and
> he had to sign his furlough papers,” one woman tweeted. ”We have a 4 yr. old
> and a 4-month-old, and we don’t know when his next check will come. Mortgage
> is due, Christmas 2 days away.”

Unpopular opinion. It's _really_ hard for me to feel bad for families that
have or are expecting kids without consulting their financials first. I
believe that one shouldn't have kids if they can't afford them or have more
kids than they can afford, but saying this out loud is an easy way to make
enemies.

~~~
extra88
I vaguely agree with that sentiment but I don't understand why you chose to
bring it up in connection to a government employee not getting paid because of
the government shutdown.

~~~
bitxbitxbitcoin
Unfortunately, it's because government shutdowns (not being paid on time for a
period of a week to two weeks to maybe three weeks this time) are a regular
occurrence that absolutely can and should be planned for by any potentially
affected government employee.

~~~
Aeolun
How is this even legal? I don’t think this happens in any other liberal
democracy.

------
learnstats2
Living paycheck-to-paycheck can be representative of good choices being made
(and I'd guess it is, in most cases).

Most people can't afford everything they optimally need while minimising their
risk, and so have to manage this by optimising as much as they are able within
their paycheck. People with limited resources are going to hit a barrier
somewhere, and spending your income is often going to be the least bad barrier
to hit.

~~~
ianleeclark
> Most people can't afford everything they optimally need while minimising
> their risk, and so have to manage this by optimising as much as they are
> able within their paycheck.

Not being able to afford basic necessities-in the most wealthy nation in the
world-indicates something being broken.

~~~
cpwright
I think the point is that living paycheck isn't indicative of not being able
to afford basic necessities. It is the desire to spend most of your income on
more than what are actually basic necessities.

~~~
ianleeclark
No, that's absurd, and with the trend of depressed wages and increases in rent
over the past few decades, workers wages are increasingly being stretched
thin.

Moreover, I was responding to OP, specifically the conclusion I quoted and
these two statements: > Living paycheck-to-paycheck can be representative of
good choices being made (and I'd guess it is, in most cases).

and

> Most people can't afford everything they optimally need while minimising
> their risk,

------
adjkant
Related required reading: [https://thecorrespondent.com/4664/why-do-the-poor-
make-such-...](https://thecorrespondent.com/4664/why-do-the-poor-make-such-
poor-decisions/179307480-39a74caf)

Before judging at the title, read the summary:

Our efforts to combat poverty are often based on a misconception: that the
poor must pull themselves up out of the mire. But a revolutionary new theory
looks at the cognitive effects of living in poverty. What does that relentless
struggle to make ends meet do to people?

------
sys_64738
Show us your incoming wage and outgoings then we can discuss whether you are
living paycheck to paycheck. Living paycheck to paycheck means your needs are
not being met rather than your wants. Cable (free OTA), eating out at all
(pack sandwiches), heat (wear more clothing), etc, are all things which need
to be cut if you think your outgoings are greater than income.

~~~
in_cahoots
In many parts of the country, cutting heat is impossible. Disregarding the
fact that it’s nearly impossible to find enough clothing to stay warm long-
term when the temperature drops below 20 degrees Fahrenheit or so, pipes will
start to burst when the indoor temperature falls below freezing as well.

~~~
aparks517
Sure, you can’t just turn it off where I live. But reducing the temperature
somewhat can have a larger than expected impact on heating cost, especially in
homes with poor thermal resistance. Personally, I’d cut the cable TV first
(and did).

------
cabaalis
Real estate is the way I broke this cycle. It was not a short term fix, it
took 10 years. Living in and ultimately selling my condo and moving to an
apartment netted me enough equity to pay off all my debts.

One year later, I've just finishing building a home, and have a 5-month
emergency fund, and laugh at the idea of buying anything else at all on
credit. A mortgage and nothing else.

I'd never have been able to do that paying all the monthly minimums on the
debt I accrued in my 20s. It was money in, money out--money that was already
spoken for.

~~~
Aeolun
That’s entirely predicated on prices for real estate constantly rising, which
is exactly what got us in this fix in the first place.

------
RickJWagner
We are mostly tech people here, right? Given that, I have a suggestion. We
should all be smart, compensated well, etc.

If you worry about things like this, study what's been said by Warren Buffet,
Jack Bogle, and Ray Dalio. These guys have won the game and explain clearly
how anyone (yes anyone) can slowly accumulate wealth. It really does work.

The site Bogleheads.org is full of helpful ideas and people that will guide
anyone that asks nicely.

This problem cannot be solved by politics, but rather by education. Happy (and
prosperous) 2019 to all!

~~~
supertrope
That's a few steps beyond someone who spends down their checking account each
pay period (or runs deficits at times).

You have to have something to invest first.

Budgeting and/or landing a better job probably would come first.

------
Spooky23
There is a way out. Use cash.

My wife and I struggled with this, we do well and found our expenses
increasing with our income.

Our solution was to take a small windfall (tax refund) to bootstrap two months
of basic expenses, and dump money from direct deposit into a specific account.
We did that to get current.

That eliminated many dopey expenses (Starbucks, shiny things in the grocery,
etc). It’s harder to spend money when it’s in your hands. I have a no debit
card policy, so we setup a dedicated credit card for things like gas that cash
is onerous for.

~~~
diminoten
This just sounds penny wise, pound foolish. Starbucks isn't breaking the bank,
something larger is.

And your credit card policy hurts your family, to the tune of thousands of
dollars every year.

~~~
war1025
Starbucks might not be breaking the bank, but it and the 10 other "not
breaking the bank" habits all added together very well could be.

Also in order to same "thousands" every year, you either need to be spending a
significant amount of money, or be carrying a significant amount of debt.
Neither are strictly necessary. Avoiding it is a good plan for a lot of
people.

~~~
diminoten
The logic you just gave is the classic penny wise logic, but the reality is
you can have as much Starbucks as you want if you stop buying more house or
car or education than you actually need.

Fucking up big decisions is how Starbucks matters, and one of those fuck ups
is to refuse to learn how to use a credit card.

People like to pretend constant denial of small pleasure is what makes a
difference because martyrdom feels righteous, but the reality is it's a huge
waste of energy, dollar-per-effort wise. It's not the smart way to live a
thrifty life.

~~~
war1025
I basically agree with you, but if you stop buying more house or car than you
actually need, then you aren't saving thousands a year from credit card use.

It's like any optimization problem, at different stages of it there is
different low hanging fruit. Yes, if you have the big expenses figured out,
you are in a pretty good place. But at that point, it is reasonable to
consider whether you have some small bad habits that you might be better off
without.

~~~
diminoten
The exclusive fixation on "thousands" vs. "many hundreds" or "tens of
thousands" is intellectually dishonest.

~~~
war1025
I disagree. Using credit cards for cash back is on the same order as going to
Starbucks or not. Using them to build better credit is also a small-scale gain
if you aren't taking on more debt than you can handle.

~~~
diminoten
No it's not, by an order of magnitude, and no you don't need to take on debt
to build credit, in fact that doesn't even work.

It just sounds like you also don't know how credit cards work...

~~~
war1025
Looks like you weren't the person who replied about using credit cards to
build credit and get lower interest rates on loans. So that probably explains
some of the disconnect here.

Cashback is definitely on the same order of magnitude as a Starbucks habit.

~~~
diminoten
> Cashback is definitely on the same order of magnitude as a Starbucks habit.

False. Starbucks habit is $10/week, or $520/year. A 2% cashback card will
return ~$2,000 annually for a family of 4 with a household income of ~$100,000
(the vast majority of HN users).

Please stop replying. Thanks.

~~~
war1025
Assuming your Starbucks habit is daily, you're looking at closer to $30/week,
or $1500/year.

If you are making $100k a year, your take home pay is probably closer to $70k.
Assuming you are financially responsible and saving a decent amount, that
means you are spending generously maybe $50k/ year. At 2% cash back, that
comes out to $1000/year.

Same order of magnitude.

~~~
diminoten
Your numbers are completely wrong, and you are engaging dishonestly, which is
in violation of the HN guidelines. _Please_ stop responding to me, you're
ruining this discussion.

~~~
war1025
Sorry I hurt your ego.

Those numbers are completely reasonable, and anyone who took half a second to
go over them would agree.

Further, at this point the post is old enough that no one besides us is likely
to read it. No discussion is being ruined.

I have been engaging in good faith. I have to conclude that you haven't been.

You can reply again to have the last word if that will make you feel better.

~~~
diminoten
You have not been engaging in good faith, and your continued replies are
further evidence of your lack of respect for me or the conversation I'm trying
to have with others.

My ego is irrelevant, you are objectively wrong and _also_ not using HN as it
is intended.

------
xtrimsky1234
I'm surprised I haven't seen anyone mentioning Dave Ramsey. His podcasts, his
youtube videos.

If you are living paycheck to paycheck, he is a great resource. It's very easy
to fall into the consumerism trap in the US. Plenty of people have iPhone,
iPads, Macbooks, seem to travel a lot, student debt, car loans, go to concerts
go eat out daily, etc... If you make 100k, or 200k or 300k, you feel you are
"rich", you don't need a budget, you don't need to keep track of every dollar,
you don't need a plan, a 2% car loan interest is fine, the S&P500 gives you a
return of 10% anyways... But Dave Ramsey stirs people in the right direction.
At first you will probably curse him because he goes head on against simple
math. But his teachings are great, they push you into making actual progress
and not postponing efforts. I think someone making 60k and following what he
teachers can easily become a millionaire.

------
TimTheTinker
[https://outline.com/duWzgx](https://outline.com/duWzgx)

------
BuckRogers
I spent most of my life trying to be sure I didn't end up that way. It's a
choice. It's not easy if you had no parental help, guidance or financial
backing. But that was me. I have done it, mostly through sheer personality
(persistence) and just-enough IQ points to put ideas into action. Some people
would say it's because of the color of my skin, which I assure you no one gave
a damn about when I've been interviewing nonstop for 6 months straight, 3-4
times a week (roughly half of those a 30minute-1hour commute across the city
on public transportation), and getting some rather rude rejections. Many
people wouldn't even do it, unless it was on a platter for them. They accept
less, what's easy.

I've seen poor people, the middle class and wealthy alike end up living check
to check. As my Depression-era grandmother always said, it's not what you
earn, it's what you save. There's many ways to do that. You can work more,
find a way to earn more while you do work, or spend less. I do all three to
ensure I remain in the middle class, with a growing savings account.

Most people have fanciful dreams they never achieve, shooting a little high
for their talents. My most important career goal has been to not make Walmart
greeter my retirement plan. I'm doing everything I can. Tomorrow morning in
effort to prevent that, I'm maxing out my yearly contribution to my Roth IRA,
which I opened up alongside my 401K/rollover traditional IRA. So what was I
doing before I saw this story show up on my Firefox Livemarks? Working on a
SQL query, while my wife is out eating burgers with her mom. It requires
dedication to stay afloat.

I know there's a lot of people here just like me. While I started on a
Commodore128 and it's my passion (I know of many ways to make money, much
easier), many people in this field found it because they simply wanted to
improve their lives, which I admire. There's also some that didn't really earn
their positions, carefully crafted and placed by their loving parents, and
will have a lot of issue with my story, not fully understanding that it has
been done and can be done from the bottom.

Most of us are dealt a mediocre hand. I remain steadfast in that living
paycheck to paycheck is ultimately a choice. A poor one at that.

------
buttholesurfer
I was getting paid 150k a year and living paycheck to paycheck...

Depression, debt and "education" can really blind you. Add in a gf/wife who
can't budget for anything, sick family members and some bad luck...

------
Zelmor
Now I'm talking from an Eastern European perspective, but this writing is
pretty one-sided with people working in (liberal) arts fields with 4 kids.
HVAC repair folks, plumbers, electrical repairmen have as much an income as a
software developer here.

So go get a blue collar job, if your libarts degree isn't paying for it.
Welding pays well, sure it's dirty, sure it's hard, but there is zero
competition in these fields.

------
lr4444lr
Something has been seriously wrong with the U.S. savings rate over the last
3-4 decades:
[https://fred.stlouisfed.org/series/PSAVERT](https://fred.stlouisfed.org/series/PSAVERT)

You would see by the graph that maybe we started to learn something after the
2008 meltdown, but nope - trend reverses again in 2012 or so.

------
hi41
I am in my forties and barely know the basics of finance. I have a checking
account that gets deposited with my salary and pay my bills. Does someone know
of resources that have sound financial advice. Few years back I had to borrow
money to pay rent.

------
known
I think UBI that promotes self-actualization in
[https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs](https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs)
is the solution

------
chibg10
There is astonishingly little actual data in this article. The only non-
anecdotal justification of the headline is from a study that received its own
article when it was originally published quite a while ago.

Makes me wonder why WaPo decided this article needed to be published.

------
NightlyDev
Living paycheck to paycheck is common most places in the world. It's definetly
a choice a lot of people make.

------
cheez
In all of these, nowhere does it state the biggest expense: taxes.

------
huffmsa
A college economics professor would say that this is behavior at the optimal
consumer utility boundary.

------
artfulcat
We can address huge swathes of this by linking immigration law with
unemployment numbers. That way companies are not allowed to simply demand
unrealistic exorbitant qualifications for open positions and they would be
more willing to increase wages and considering hiring and training people in
deficient areas.

------
melissarblevins
For the majority of Americans the simple fix is to spend less than you make
and stop acquiring debt to impress people you don’t like.

Cost of living and wages, of course, are factors to consider, but relocation
to a more affordable area is an option for many. It’s a matter of going
through with it.

~~~
Aeolun
Not all of us want to leave the place we grew up in and all our friends behind
just because a bunch of juppies have decided to move in.

------
fromthestart
From the executive summary of the Federal Reserve report linked in the
article:

>When asked about their finances, 74 percent of adults said they were either
doing okay or living comfortably in 2017—over 10 percentage points more than
in the first survey in 2013.

>Individuals of all education levels have shared in the improvement over the
past five years, though the more educated still report greater well-being than
those less educated.

>Three in five urban residents describe the economy in their local community
as good or excellent ver- sus two in five rural residents who offer this posi-
tive of an assessment of local conditions.

Etc. Far less bleak when one focuses on the whole picture. But don't let that
stop wapo et al. from implicating Trump while trotting out predictable sob
stories about people who spent half their lives pursuing 3 uneconomical
degrees, had 3 more kids than they could afford, in cities with some of the
highest costs of living in the world, and now complain that they're living
paycheck to paycheck.

I'm getting really tired of the agenda based fear mongering by wapo, huffpo,
and the like. Trust in media is rightly at an all time low[1].

1.[https://medium.com/trust-media-and-democracy/10-reasons-
why-...](https://medium.com/trust-media-and-democracy/10-reasons-why-
americans-dont-trust-the-media-d0630c125b9e)

~~~
vailprogrammer
> sob stories about people who spent half their lives pursuing 3 uneconomical
> degrees, had 3 more kids than they could afford, in cities with some of the
> highest costs of living in the world, and now complain that they're living
> paycheck to paycheck.

So the person who ....

\- never attended any sort of college, but did graduate high school

\- is single and childless, in fact have no family at all as their parents
died poor and young

\- is living paycheck to paycheck, whether in a city or rural area

...just doesn't exist? And if they do exist, please enlighten me on what steps
they should take to correct their situation?

Just curious, but are your parents college educated?

