This commonly cited ”survey” sponsored by LendingClub includes so many things in “paycheck to paycheck” that it devalues the spirit of the word entirely.
Do you use a credit card to pay for your goods, even if you have auto-pay on and pay it off easily each month?
You’re now living paycheck to paycheck, according to these folks. And because of that you should check out our fantastic offers over at LendingClub!
If you take a look at their somewhat-less-weakened definition of the term, “living paycheck to paycheck with difficulty”, the number is ~20%.
Can you support all your debt load (mortgage, auto, credit card) for a reasonable period of time ( say a few months ) if you suddenly lose your income this very second?
If not, you are by definition living paycheck to paycheck
It's problematic because it presumes people using a credit card are doing so because they have to, when there are other valid reasons.
E.g. I often use credit cards for purchases I have cash for (and them pay them off), because there are dramatically better protections for credit card purchases than debit card purchases. I also get benefits like cash back or miles which I do not get on my debit card.
I downloaded the report referenced in the article, and it is really bad in quality. Among other complaints, it never defines paycheck-to-paycheck. It does have this nugget:
> Job loss and income-related disruptions are the most common fi nancially stressful situa-tion, for instance, with 16% of respondents experiencing this in the last three years . Among paycheck-to-paycheck consumers with issues paying their bills, 30% experienced a job loss and income-related disruption in the last three years compared to 17% of paycheck-to-paycheck consumers without diff i culties and 10% of those not living paycheck to paycheck . Also 26% of paycheck-to-paycheck consumers with issues paying their bills and 15% of paycheck-to- paycheck consumers without diff i culties faced an illness or disability in the household in the past three years . One can conclude that these life-altering events have forced consumers to live paycheck to paycheck .
There is a population of paycheck to paycheck people who have lost income, but do not have issues paying their bills.
By this definition it doesn't matter at all. I could support myself for a decade without work and yet by the credit-card based definition I'm apparently living paycheck to paycheck. Scary!
I sympathize, really (having subsisted on zero means[1], however seeing redit posts of what $x buys in food which invariably contain cookies, potato chips, and soda makes me balk.
Americans do not know how to take care of themselves. You have lost your way.
There is this idea of lean living which applies to the wealthy and modest alike (without detracting from the plight of true impoverishment, which does exist.. and is not this!)
[1] have you checked out your local freegans? Such as http://foodnotbombs.net/ ; I’ve volunteered at food kitchens and free farmers markets, I know who’s wanting and who just doesn’t know how to care for themselves [menacing glare].
You are not the plucky resourceful America of generations past!
Maybe if our government would decide to subsidize healthy, local food instead of big corn syrup, more of us would A. Know what real food is supposed to taste like, and B. Would eat in a healthier way.
People making 250 grand living paycheck to paycheck is indicative of very poor planning and budgeting.
Either living above their means or they are spending unscrupulously.
For the poor person inflation sucks but you’re not holding onto the money so it depreciates less, unless your hourly rate isn’t going up enough to keep up.
Blame every president since and including GW Bush. At least Clinton tried to balance the budget. Everyone else thought you just have to mint more.
> For the poor person inflation sucks but you’re not holding onto the money to it depreciates less, unless your hourly rate isn’t going up enough to keep up.
This is the real problem. All of this newly-created money is put in the hands of the finance sector first, and wages are therefore much slower to inflate than financial assets (including housing).
If there really is a benefit to the money creation, we should put the new money in the hands of real people first. We don't obviously, because people aren't in charge, capital is.
We also don't because a lot of those poor people have decided or been taught that giving money directly to poor people "doesn't work" or makes them "lazy" and so they vote for politicians who don't give money to poor people.
If there is one thing the pandemic has illustrated for me it’s that half of everyone is lazy and will do just about the least required.
From your custodian to CEO and in between. There are exceptions everywhere but a great bulk are lazy and are not pursuing their true passion either. As Jimmy Carter said “malaise”.
I think I'd frame it as: lots of people are lazy much of the time.
What's really important here though is that some people can actually produce meaningful value as an employee, and others can't. For those who can, the question becomes "how often do they do it?"
I am sure everyone has encountered a person who just can't get their shit together and get something done. That could be a negative-value tech employee or someone at McDonald's who just can't get a simple order right.
I think only a very few of them absolutely CAN'T do better. Many can, but won't. And we absolutely should not be showering those people with free money made on the backs of people who worked for it.
What I find quite amazing is that in Britain something close to 90%[1] of cars bought are on finance. Looking around me I think that the average age of cars is well under 10 years, and many cars are super expensive compared to the median salary of the country.
I really don't think that most people budget with worst-case scenarios in mind, so that even middle to high income households can be hit hard by a lack of disposable income.
Do you use a credit card to pay for your goods, even if you have auto-pay on and pay it off easily each month?
You’re now living paycheck to paycheck, according to these folks. And because of that you should check out our fantastic offers over at LendingClub!
If you take a look at their somewhat-less-weakened definition of the term, “living paycheck to paycheck with difficulty”, the number is ~20%.