living paycheck to paycheck

[baldgriff]

I dont think I back tracked at all. I said I want everyone to pay equally in proportion to what they have/produce. That means they pay the same amount of tax based on what they make/earn. One guy may pay $10 and the other guy $1000 - solely based on what they make/earn. Whereas you would prefer to saddle the immigrant making very good decisions with his money a higher tax burden solely because "he has more". How is that fair or equitable?

Edit to correctly state - they should pay the same percentage of tax based on what they make/earn. One guy may pay $10 and the other guy $1000 - solely based on what they make/earn. Whereas you would prefer to saddle the immigrant making very good decisions with his money a higher tax burden solely because "he has more". How is that fair or equitable?

[TranaGreg]

I said over regulation, not no regulation.
But a better question to ask might be why you and BFly think the government, who’s very own Social Security program will be forced to reduce benefits by 23% in 2034 because of a lack of financial planning but is afraid of addressing the issue, is suited to nudge others in a paternalistic way to save for retirement?

well, simply because I haven't heard any other good suggestions

That would be proper education on how to spend money - how to invest money - and do it in schools. How about we teach our kids basic life skills in school - you know balance a check book, how to cook meals, how to budget your funds, etc....

do you think that will solve the problem that JJ outlined in the first post of this thread? maybe in 20 years ... but the problem outlined will have serious repercussions long before then

[baldgriff]

well, simply because I haven't heard any other good suggestions

do you think that will solve the problem that JJ outlined in the first post of this thread? maybe in 20 years ... but the problem outlined will have serious repercussions long before then

Its a starting point - is the best I can say. I mean holy crap we have millions of kids getting out of high school without any life skills - let alone marketable ones. How do we solve it? Stop doing what got us here in the first place. Quit putting money into quail fucking, or sending money overseas to countries that burn our flags, put more money into the hands of the poor and let that immigrant kid share with them how he is getting rich, by investing in companies (which create jobs and products). Empower people with the knowledge that they are in control of their life - and no dependent on a government handout to survive. Let people be responsible for their decisions - both failures and successes.

[Sour Masher]

There is a party like this - but you will end up wasting your vote..........

Libertairians don't fit, because they want less government across the board, and they are just as happy to cut what I'd consider important social programs as unnecessary military spending. I'm not for socializing everything, but there is enough evidence out there that socializing medicine is not only morally right, but fiscally responsible in the grand scheme. I libertarian would never be for that. You yourself have said you think putting more money in the pockets of individuals would help the social welfare issue, and I do not agree with that. It would help some communities but not others. We would not be fulfilling the social contract we have with our citizens.

Now, if there was a libertarian candidate who believed in government's role in keeping us safe from pollution and carbon emissions, and its function as a social safety net, and focused government cuts on graft, waste, programs that don't meet the basic, core needs of health and safety of a society, and the MIC, I think the person would gain a lot of traction. And if they focused their "less government is better" on things lots agree with like legal pot, instead of Rand Paul saying we should totally let business discriminate against black people, cuz it isn't the government's role to enforce basic moral standards of fairness, that would work too. But that wouldn't be a libertarian.

[Sour Masher]

As a financial adviser, especially as one who has a few 401k plans as clients (where I can see what an everyday "rank & file" employee saves and their financial habits), it's horrifying. The reality is that most people simply don't understand the necessity of saving money, or finding ways to cut bills. I had a discussion just the other day with a well-paid employee at one of the company's whose 401k plan I manage, and while he has savings that are more than the average American, they're not nearly enough considering his compensation. And trying to find ways to cut down on spending was fruitless. How much are your car payments? Why do you lease instead of buy? Why do you go out to eat 6-8 times a month?

The problem is ingrained habits in spending -- car leases, new $1,000 phones, nice apartments, high mortgages, expensive vacations, dining out frequently, entertainment, etc. -- and yet wages have, as JJ mentioned, stayed relatively stagnant. A "solid" wage in 2019 is almost on par with what I made as a new college grad in 1992 -- and that DOESN'T take into account inflation. Just the actual figure.

I'm going to admit that I fully understand these things, but still live pay check to pay check. So, while intellectually, I understand where JJ is coming from, he is also talking about me when he says suck it up buttercup about having a good job but not enough funds to go on for a month or two without a paycheck.

My situation is my wife and I both delayed making decent money for a long time as we both got PhDs. Student loans and low pay meant no savings until we got to about 30. Then,because of the competitive job market in academia and the relative low pay in relation to our degrees, we wiped out all of our savings moving twice to secure better jobs. I also have extended family--my mother and grandmother primarily, that both live off of social security and need some financial support from me. By the time we settled in our current well-paying positions in our mid-30s, we decided it was finally time to have kids. Now, we have two kids in pre-school eating up about 25K a year. All of this amounts to, right now, in our early 40s, making pretty good money, we live paycheck to paycheck and have significant credit card debt to boot.

I know a lot of the above is excuses, and we could have lived more modestly over the years. My wife and I actually don't see eye to eye on that. The compromise is I'm allowed to help my mother a bit, and she gets the travel to see family and go to the beach that she feels she needs to keep going. My hope is that once the kids are out of preschool soon, we will be able to pay off all of our credit card and student loan debt quickly and start saving. But I think we are a good example of how you don't have to be completely wasteful and dumb to live paycheck to paycheck making a good living. The only true waste we do imo is travel and eat out more than we should. There really isn't much else to tighten, yet we live paycheck to paycheck. Again, if I had my way, we would be doing those things. But I also understand my wife's position on travel. I fully admit we aren't living as smart as we could be, but I don't think we are super wasteful either. yet here we are.

[In the Corn]

Lots of generalizations and theorical conversation in this thread, but no one really will to open a vein and share the plight of the middle-class working Joe and Jane.

More than glad to help.

As most here now, I've spent my career working in the nonprofit world. I've work for big organization ($80,000,000 budget) to small organizations (just over $250,000). My first real big boy job, I received a salary of $18,500 to start with. This was back in 1995. I got the biggest raise of my life the week after I got married when my boss saw that I was responsible to raise two stepkids. I moved up to $22,000. I had no benefits other than vacation and sick time. My wife carried our insurance at the time. I wasn't there long enough to (3 years) to get an employer match to a 503b retirement account. I was fired from that job in February and started a new job in April at a reduced salary.

At the same time my wife lost her job and until the last year and half has never worked in between...long story, and pretty painful to get into. Suffice it to say, my wife and I have lived paycheck to paycheck for the 22 years we have been married. My wife cashed in her small retirement ($10,000) in 2000 so we could make a down payment on a house. Stupid some might say, but it was the only way we could get into a house.

My wife and I have lived a pretty frugal lifestyle. I've been blessed beyond measure by the generosity of friends and family. I've had four cars given to me in my lifetime. We have had friends and family purchase a fridge, washer, dryer and dishwasher for us. My wife and I have only ever paid for three vehicles: two minivans and an economy electric car that we currently own. We have one car, currently. If we need to make a road trip, I need to borrow a car.

So where are we at today: I draw a salary of just over $50,000 (this brings me just above what I made prior to the economic crash). Out of that, I need to cover our health insurance, no dental, no matching retirement from the organization. Not chump change by any means. My wife makes about $8,000 annually. After paying our bills (mortgage, utilities, insurance, student loans, life insurance, health insurance, etc. no cable just Netflix and Hulu), we have about $650 to cover food, clothing, medications, entertainment, medical bills, etc.

My wife takes three prescriptions everyday that cost $50/month, so now we are at $600
I purchase groceries for the month between $300-$400, so now we are at $200-300
I get dog food for the two dogs at $30, so now we are at $170-270
I'm not going to lie, we eat out more than we should, but not extravagant, probably $150, so now we are at $20-120

I haven't purchased any clothing, car maintenance, emergency, etc. And I haven't paid a medical bill, which I really should. So yeah, there isn't a whole lot of meat on the bone.

At the start of 2017, my wfe stopped taking one of her medications becuase even after insurance it was $150 a month.

You ask me what becomes of the money my wife brings in? Well, last year, she had major dental work done $3500. She just went yesterday to for a teeth cleaning and exam $150.

She uses that money for emergencies and vacation...our fridge just crapped out. We purchase a $300 refurbished fridge. As for the vacations...they're to see our son, daughter-in-law, and most importantly, garnd-daughter in Boston. What do our vacation consist of? Mostly babysitting for the week. I'm not complaining, I'm just saying these are not extravagant getaways. The closest thing Mrs. ITC and I have had for a vacation that wasn't paid for by someone else is a night at the local casino that we had a coupon for a free night stay.

I tell people that many years ago when the Social Security Administration use to send out your benefits with the line, if nothing changes your monthly benefit is $XXX, I've said too myself, "I've lived on less."

I fully expect I will work until I die. I also fully believe that people (family and friends) are going to support Mrs. ITC and me in my older age.

So there is one story of Joe Middle Class, and why there is a lack of savings.

Critique away, if you so want.

[baldgriff]

Libertairians don't fit, because they want less government across the board, and they are just as happy to cut what I'd consider important social programs as unnecessary military spending. I'm not for socializing everything, but there is enough evidence out there that socializing medicine is not only morally right, but fiscally responsible in the grand scheme. I libertarian would never be for that. You yourself have said you think putting more money in the pockets of individuals would help the social welfare issue, and I do not agree with that. It would help some communities but not others. We would not be fulfilling the social contract we have with our citizens.

Now, if there was a libertarian candidate who believed in government's role in keeping us safe from pollution and carbon emissions, and its function as a social safety net, and focused government cuts on graft, waste, programs that don't meet the basic, core needs of health and safety of a society, and the MIC, I think the person would gain a lot of traction. And if they focused their "less government is better" on things lots agree with like legal pot, instead of Rand Paul saying we should totally let business discriminate against black people, cuz it isn't the government's role to enforce basic moral standards of fairness, that would work too. But that wouldn't be a libertarian.

You may be correct about some of this - but its closer (in my mind) to anything else that you are looking for.

I did say I endorse putting money back into the hand of the people - poor and rich both. I dont believe that we should do away with some social safety nets. You agree that additional money would help some communities but not others. Thats an interesting thing - maybe once a community is "fixed" we can allocate from the pool more to that other community - or maybe a series of good decisions is what helps one community succeed over another community.

I dont buy everything that Rand Paul says - but lets consider this from the short clip I posted earlier. 3 programs totaling 3million dollars in government spending was wasted on - whether there was an "A" in a historical statement - (700k)
whether people will eat sneezed on food at a buffet line (2million)
whether Japanese quails are hornier on cocaine (300k)

There was also spending on Ugandan gambling habits and how to prepare the Philippines for global warming (undisclosed in clip).

Thats at a minimum 3million dollars and probably closer to 5 or 6million in FRIVOLOUS spending that could be better spent on real issues in our own backyard. That was money specifically wasted and is not spent toward fulfilling the social contract. Why do you believe that the government is any better at fulfilling the social contract than people?

Just because they provide a program doesnt mean that they are any better at it. They overspend on just about everything that they purchase and cant stay within any budget that they create.

[Judge Jude]

I'm going to admit that I fully understand these things, but still live pay check to pay check. So, while intellectually, I understand where JJ is coming from, he is also talking about me when he says suck it up buttercup about having a good job but not enough funds to go on for a month or two without a paycheck.

My situation is my wife and I both delayed making decent money for a long time as we both got PhDs. Student loans and low pay meant no savings until we got to about 30. Then,because of the competitive job market in academia and the relative low pay in relation to our degrees, we wiped out all of our savings moving twice to secure better jobs. I also have extended family--my mother and grandmother primarily, that both live off of social security and need some financial support from me. By the time we settled in our current well-paying positions in our mid-30s, we decided it was finally time to have kids. Now, we have two kids in pre-school eating up about 25K a year. All of this amounts to, right now, in our early 40s, making pretty good money, we live paycheck to paycheck and have significant credit card debt to boot.

I know a lot of the above is excuses, and we could have lived more modestly over the years. My wife and I actually don't see eye to eye on that. The compromise is I'm allowed to help my mother a bit, and she gets the travel to see family and go to the beach that she feels she needs to keep going. My hope is that once the kids are out of preschool soon, we will be able to pay off all of our credit card and student loan debt quickly and start saving. But I think we are a good example of how you don't have to be completely wasteful and dumb to live paycheck to paycheck making a good living. The only true waste we do imo is travel and eat out more than we should. There really isn't much else to tighten, yet we live paycheck to paycheck. Again, if I had my way, we would be doing those things. But I also understand my wife's position on travel. I fully admit we aren't living as smart as we could be, but I don't think we are super wasteful either. yet here we are.

I wish you well.

I think rewiring the thought process is key.
paying off your debts is critically important to your bottom line. basically, let's say the way you are living gets you 10 days of travel each year for 10 years. if you cut back to 5 for 5 years, and use all of the savings to pay off debt, you not only could afford to do 15 days of travel for the next 5 years, you'd still be ahead financially compared to how you do it now because of the saving on interest. so you get less travel this way.

as for you both getting PhDs at once, of course that is your personal choice. but once you make that choice, you have to make sacrifices elsewhere. but it doesn't sound like you are, really. you can't have the career path you both want AND travel as much as you want. you picked PhDs, so something has to give.

another, different way to look at it: is your lifestyle the right thing for your children? if they come first, your answer is no. what the two of you make decisions over is one thing; now the kids are pulled into the equation without them being able to consent. they will miss out on many things in life based on the decisions you are currently making. you have to decide if you are comfortable with that.

I realize that all seems shocking, because no one says any of these things and most likely your family, friends, and neighbors are stuck in the same cycle. but it's an insane cycle nonetheless.

it goes back to my being fortunate to have had parents who suffered through The Great Depression. that reality shaped them and shaped all of their children. most of society is so far removed from that now, and credit is so ridiculously easy to get, that our culture is in this collective state of lunacy.

now I'll put on my helmet and retreat back into my bunker.

[DMT]

Thanks for sharing your personal perspectives. Again, this is why my immediate response to JJ was one of scorn. Almost everyone living paycheck to paycheck are not living extravagantly.

[nots]

They overspend on just about everything that they purchase and cant stay within any budget that they create.

Truer words have never been written in the Sports Bar, but yeah, let’s let the folks with no fiscal discipline show us the way forward.

[DMT]

You may be correct about some of this - but its closer (in my mind) to anything else that you are looking for.

I did say I endorse putting money back into the hand of the people - poor and rich both. I dont believe that we should do away with some social safety nets. You agree that additional money would help some communities but not others. Thats an interesting thing - maybe once a community is "fixed" we can allocate from the pool more to that other community - or maybe a series of good decisions is what helps one community succeed over another community.

I dont buy everything that Rand Paul says - but lets consider this from the short clip I posted earlier. 3 programs totaling 3million dollars in government spending was wasted on - whether there was an "A" in a historical statement - (700k)
whether people will eat sneezed on food at a buffet line (2million)
whether Japanese quails are hornier on cocaine (300k)

There was also spending on Ugandan gambling habits and how to prepare the Philippines for global warming (undisclosed in clip).

Thats at a minimum 3million dollars and probably closer to 5 or 6million in FRIVOLOUS spending that could be better spent on real issues in our own backyard. That was money specifically wasted and is not spent toward fulfilling the social contract. Why do you believe that the government is any better at fulfilling the social contract than people?

Just because they provide a program doesnt mean that they are any better at it. They overspend on just about everything that they purchase and cant stay within any budget that they create.

Again you're completely whiffing on the issue. You can't complain about $6,000,000 in spending while supporting $1,500,000,000 in tax cuts. It's not even close.

[baldgriff]

Again you're completely whiffing on the issue. You can't complain about $6,000,000 in spending while supporting $1,500,000,000 in tax cuts. It's not even close.

And you have accused me of being intentionally obtuse??? Seriously my friend (and I do mean friend) - there is WAY WAY more than 6million in wasteful spending - its only a small example of the vast other wasteful spending. You know that to be true - but hey lets call out the guy only detailing 6 or 7 Million....

I havent done all of the research to total it up, but I bet we could take a good 15% out of the military budgets and reallocate that, cut the wasteful spending and shrink other bugets

Did I support the tax cut? From a general perspective, I think the government takes way more than they should (so I suppose by default I supported it). Honestly I never actually got involved in that conversation.

I would prefer to see that we have BALANCED SPENDING AND BUDGETS (which if I recall is a more Libertarian idea now than any Rep or Dem).

We have to stop doing what we have been doing for the last 30 years. Doing the same thing over and over again and expecting a different result is insanity!

[In the Corn]

I wish you well.

I think rewiring the thought process is key.
paying off your debts is critically important to your bottom line. basically, let's say the way you are living gets you 10 days of travel each year for 10 years. if you cut back to 5 for 5 years, and use all of the savings to pay off debt, you not only could afford to do 15 days of travel for the next 5 years, you'd still be ahead financially compared to how you do it now because of the saving on interest. so you get less travel this way.

as for you both getting PhDs at once, of course that is your personal choice. but once you make that choice, you have to make sacrifices elsewhere. but it doesn't sound like you are, really. you can't have the career path you both want AND travel as much as you want. you picked PhDs, so something has to give.

another, different way to look at it: is your lifestyle the right thing for your children? if they come first, your answer is no. what the two of you make decisions over is one thing; now the kids are pulled into the equation without them being able to consent. they will miss out on many things in life based on the decisions you are currently making. you have to decide if you are comfortable with that.

I realize that all seems shocking, because no one says any of these things and most likely your family, friends, and neighbors are stuck in the same cycle. but it's an insane cycle nonetheless.

it goes back to my being fortunate to have had parents who suffered through The Great Depression. that reality shaped them and shaped all of their children. most of society is so far removed from that now, and credit is so ridiculously easy to get, that our culture is in this collective state of lunacy.

now I'll put on my helmet and retreat back into my bunker.

JJ, I understand what you're saying. And yes, we have to live with the decisions that we make. Where do you draw the line of living today vs. living tomorrow?

I don't think it is unrealistic to expect to travel for 10 days every year? It's not over the top to take some vacation for both mental and physical well-being. Masher's wife, IMO, isn't asking too much.

As for their pursuit of PhD's, were do we draw the line in fulfillment of life? Perhaps they could have stopped at a Master's but then maybe they couldn't teach at the university which is their passion?

Sometime the sacrifice of money, security and knowing I can have the winter house in AZ, just don't mean enough to me, and others to slog through life completely unfulfilled.

[B-Fly]

Im generalizing here..... Ultimately if the kid keeps making good investment decision - he will be in a higher earned tax bracket than his co-worker. Im making this oversimplified to find out why it is fair or equitable to have one person pay more solely because they made really good decisions with their money?

People should pay an equal amount based solely on what they make/earn. The kid with the 50k in equities is at some point going to be in a higher tax bracket based on solely good decisions - and those good decisions will then require him to pay more than his co-worker.

I'm still lost here. We have two people with a $40,000/year job. One guy lives paycheck to paycheck or even takes on massive credit card debt. The other invests and makes $9,000/year from his investments. Both guys are still paying the same income tax rate on their first $40,000 of income. Maybe, depending on the tax code that day, the investor is paying a higher marginal tax rate on his additional investment income (but probably not), but no, we're not cutting the "bad decision" co-worker a break. They're still paying the exact same rate on their gross income from the identical job.

[baldgriff]

I'm still lost here. We have two people with a $40,000/year job. One guy lives paycheck to paycheck or even takes on massive credit card debt. The other invests and makes $9,000/year from his investments. Both guys are still paying the same income tax rate on their first $40,000 of income. Maybe, depending on the tax code that day, the investor is paying a higher marginal tax rate on his additional investment income (but probably not), but no, we're not cutting the "bad decision" co-worker a break. They're still paying the exact same rate on their gross income from the identical job.

Hypothetically, if he decides to cash in the 50k in investments that will move him to a higher tax bracket. He is responsible to pay more in taxes - solely based on the fact that he made good investments - even though his base earnings were the same as the other guy. Sorry, I didnt lay it all out - in that he actually took a realized gain from his investments which moved his earned income up........

Ultimately what I am trying to demonstrate is that the immigrant kid made really good decisions. The fruits of those good decisions is paying a higher tax, because of some "social contract" that the government gets to enforce. I believe that he may have to pay more - but while he pays 10% of the 90K (job plus realized gain) his friend should pay 10% of the 40K. Its a tax that holds people equally responsible and is based solely on what they make/earn.