Nearly Half of America Lives Paycheck-to-Paycheck

[Gingersnap]

Nearly Half of America Lives Paycheck-to-Paycheck
By Christopher Matthews @crobmatthews
Jan. 30, 2014359 Comments

The economic picture is looking brighter these days. The federal government announced Thursday that economic growth had picked up to its fastest pace in two years, while employment growth over the past five months has averaged a healthy 185,000 new jobs. But as evidenced by a report out Thursday from the Corporation for Enterprise Development, nearly half of Americans are living in a state of “persistent economic insecurity,” that makes it “difficult to look beyond immediate needs and plan for a more secure future.”

In other words, too many of us are living paycheck to paycheck. The CFED calls these folks “liquid asset poor,” and its report finds that 44% of Americans are living with less than $5,887 in savings for a family of four. The plight of these folks is compounded by the fact that the recession ravaged many Americans’ credit scores to the point that now 56% percent of us have subprime credit. That means that if emergencies arise, many Americans are forced to resort to high-interest debt from credit cards or payday loans.

And this financial insecurity isn’t just affected the lower classes. According to the CFED, one-quarter of middle-class households also fall into the category of “liquid asset poor.” Geographically, most of the economically insecure are clustered in the South and West, with Georgia, Mississippi, Alabama, Nevada, and Arkansas being the states with the highest percentage of financially insecure.

This is terrible. There are so many ways to not do this. Even if you are deeply in debt, there are many proven ways to pay it off and get ahead. It's not easy or fun but it's something virtually anyone can do.


Read more: Nearly Half of America Lives Paycheck-to-Paycheck | TIME.com http://business.time.com/2014/01/30/...#ixzz2s2UDFUJH

[Curiosity's Dead Cat]

Immediate gratification is often too much for some to pass. Poverty isn't a lack of money, it's a symptom of problems with lifestyle and often a history of poor choices. After over 20 years of marriage to someone who chose to live this way, I'm on the path to actually living well with a modest income. I just make choices that most of the people around me don't make. Cheap apartment, old car, don't eat out, basic cable (for the internet), and not much of a night life. Most of my debt will be gone by summer, and I'll be debt free in a bit over a year and looking for a house to re-hab for some sweat equity.

Setting life's priorities isn't that hard if you are willing to see the bigger picture.

[Frostbit]

Immediate gratification is often too much for some to pass. Poverty isn't a lack of money, it's a symptom of problems with lifestyle and often a history of poor choices. After over 20 years of marriage to someone who chose to live this way, I'm on the path to actually living well with a modest income. I just make choices that most of the people around me don't make. Cheap apartment, old car, don't eat out, basic cable (for the internet), and not much of a night life. Most of my debt will be gone by summer, and I'll be debt free in a bit over a year and looking for a house to re-hab for some sweat equity.

Setting life's priorities isn't that hard if you are willing to see the bigger picture.

.
This is when Bok will call you his hero (sarcastically of course)

I thought you realized people aren't poor because of choices. They are poor because rich people and Corporations are evil.

[Novaheart]

Another way of looking at living from paycheck to paycheck is that they are making a living. It's when you don't make it to the next paycheck that life really sucks.

We play financial head games with ourselves in this country. The concept of "positive cash flow" is a bit of fiction we tell ourselves so that we can justify obscene long term debt. A person who makes $4000 per month and has a $1000 mortgage payment and $500 car expense somehow imagines that his head is above water because he has $2500 left to spend and pay taxes with.

[Adam]

Another way of looking at living from paycheck to paycheck is that they are making a living. It's when you don't make it to the next paycheck that life really sucks.

We play financial head games with ourselves in this country. The concept of "positive cash flow" is a bit of fiction we tell ourselves so that we can justify obscene long term debt. A person who makes $4000 per month and has a $1000 mortgage payment and $500 car expense somehow imagines that his head is above water because he has $2500 left to spend and pay taxes with.

If that person makes reasonable choices, then s/he does have his/her head above water. The problem is that lots of folks don't make those reasonable choices. If you (the Royal You) have $2500 after paying the mortgage and the car note, and you somehow can't manage to pay the electric, put food on the table, put gas in the car, insure the car, and pay the smaller things like water and trash collection, and not still have a not-insignificant amount of money left over at the end of the month, then you're doing something very seriously wrong.

[scott]

Another way of looking at living from paycheck to paycheck is that they are making a living. It's when you don't make it to the next paycheck that life really sucks.

We play financial head games with ourselves in this country. The concept of "positive cash flow" is a bit of fiction we tell ourselves so that we can justify obscene long term debt. A person who makes $4000 per month and has a $1000 mortgage payment and $500 car expense somehow imagines that his head is above water because he has $2500 left to spend and pay taxes with.

You're absolutely correct about that. The $500 car payment is the worst part because $1000 per month on a mortgage isn't bad given the alternatives for most people and owning a house almost always pays off over the long term (the key there is long term).

The problem is that people have forgotten how to count and don't look at their finances as a math problem. If your net worth isn't going up every month, there's a problem.

[Gingersnap]

Immediate gratification is often too much for some to pass. Poverty isn't a lack of money, it's a symptom of problems with lifestyle and often a history of poor choices. After over 20 years of marriage to someone who chose to live this way, I'm on the path to actually living well with a modest income. I just make choices that most of the people around me don't make. Cheap apartment, old car, don't eat out, basic cable (for the internet), and not much of a night life. Most of my debt will be gone by summer, and I'll be debt free in a bit over a year and looking for a house to re-hab for some sweat equity.

Setting life's priorities isn't that hard if you are willing to see the bigger picture.

Yes, but you are part of the minority who don't believe that they "deserve" a lifestyle a rung or two up the ladder right that minute.

Clearing debt and saving up enough to keep a setback from becoming a catastrophe is a huge lifestyle choice.