Nearly 1 in 3 American workers run out of money before payday—even those earning over $100,000

We made a calculated decision to go paycheck to paycheck last year so that I could finish my master's full time. In May, I'll be done and can go back to work. Then most of what I make will go straight to savings to try to build for the future (house, kids, etc). Only debt right now is my wife's car. Thankfully it has worked out for us in that no major unexpected expenses came up during this time. It does help a lot that we have plenty of deer meat (that didnt involve a bunch of lease fees and corn).
 
np307 said:
It does help a lot that we have plenty of deer meat (that didnt involve a bunch of lease fees and corn).
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This has been a HUGE cost savings for my family. We use a lot of deer meat and I try to harvest what I can any time I'm able to hunt. Will have a decent size chest freezer added to the garage of my house we're building now. It'll be nice to store meat for future use, but for right now I've been storing a lot at my parent's freezer.
 
Jeppo said:
How is it that Personal Finance isn’t mandated study for kids?
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NC recently added Personal Finance to the High School curriculum as a required course for graduation. I believe that goes into effect 2020-2021 school year.

https://www.dpi.nc.gov/districts-sc...s-and-initiatives/personal-financial-literacy

The law calls out these topics specifically:
  1. (1) The true cost of credit.

  2. (2) Choosing and managing a credit card.

  3. (3) Borrowing money for an automobile or other large purchase.

  4. (4) Home mortgages.

  5. (5) Credit scoring and credit reports.
(5a) Planning and paying for postsecondary education. (6) Other relevant financial literacy issues.
 
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JimB said:
I bought a Miele, it was about $800. It’s the best sucker on the planet, got it in 1994 and it’s still going strong. Did have to replace the lid once, the kids were riding it like a horse. Also had to replace the little wheels in the powerhead once, they break off eventually if you vacuum tile floors with deep grout lines. They’ve stopped making the hose for this model and I think that means that it’ll be dead soon, maybe as soon as 2030.
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Really??
 
Grim said:
This has been a HUGE cost savings for my family. We use a lot of deer meat and I try to harvest what I can any time I'm able to hunt. Will have a decent size chest freezer added to the garage of my house we're building now. It'll be nice to store meat for future use, but for right now I've been storing a lot at my parent's freezer.
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:D

I have 4 freezers and they stay pretty full.
 
Talking about (not) learning finance and budgeting in school. Kelly's son Matthew, his g/f Alley, needed a car a few years ago, but was still in HS, she could only work p/t so she didn't have much money, and her mom didn't have money to help, and her dad had just died. So I went and bought a Pontiac Vibe from a guy on the forum for her. We worked out a payment plan, and I told her I wouldn't charge her any interest in the note, just pay me what I paid for it. She asked me what was interest........she had no idea about interest rates, credit scores, nothing. So here goes the lesson in all that, and about savings. Got her to open a checking and savings account, and to auto set a certain amount to go into savings, etc, and don't touch it. Fast forward to now, she has about $7000 in savings, and a decent amount in checking, and pays for her own tuition at UNCC. Reason I know the numbers, is she tells me, and thanks me for helping her learn. She's very proud and should be. At 21, if she keeps on, she should be good to go later on in life.

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gc70 said:
Some people don't make much, but do just fine by living within their means.

Some people spend much more than they make regardless of how much they make, which is why we often read about high-earning celebrities in bankruptcy.
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Trooth
They say you should keep housing costs at just under 1/3 of your income.
We're sitting at about 1/6th and were that way in our old house too.
Toss in our other utility bills and stuff and then we're up to about 1/3.

We don't eat out much, we don't buy $10 lunch every day at work, we don't buy a $7 starbucks in the morning and again in the afternoon. I am constantly astounded by how much people spend on luxuries and then complain about how they need a raise because they can't afford stuff.
Example - at ALL locations for my company we provide unlimited free coffee of different blends, cream, flavored cream, sugar, tea, etc in the break room. Mars brand coffees, so they don't even have to make anything, just insert packet and get coffee... People come in with their starbucks that you know cost them $10 and then go for another on their lunch break. They complain about how they don't make enough and I say "hey, i can give you a $2.50/hr raise right now - stop spending $20 a day on starbucks for your 8hr shift. That's $100 a week, $400 a month. That's almost 2 car payments."
And people give me a look like I just tried to eat their baby.

Sorry folks, but people aren't likely to just give you free money. Work hard, save your money, limit yourself to one or two expensive hobbies. Live well within your means and you'll have enough money to step up when the chance comes. Other people have probably done more with less.
 
So many people have this weird thing about credit. I only use credit card. I get free money for doing so. I also drink alcohol. Maybe once a month. Responsibility.

You NEED to be establishing credit history as an adult. I have zero late payments. Autopay set to full amount each month so never any interest. Went to state school for undergrad and paid off. State school for grad school also paid off. Put 40% down on new vehicle (could have paid for it outright, but There many advantages to structures debt). 100% payment history on mortgage. Mine and my wife’s credit score fluctuate between 780-810. This score gets us access to the lowest interest rates on anything we need to borrow for plus advantages elsewhere that credit score used as a metric of risk profile.

We have enough saved in cash for both wife and me to lose our jobs and maintain the SAME spending for 6 months— could stretch that to 10+ as we would obviously cut back on everything—and we been there. We have investments earning us money for retirement.

We know we should be investing more and saving a bit more but we enjoy our lifestyle and have nothing to be shameful about. We’ve taken care of all the basics. We want to enjoy our money while we are young, not when we are bitching about knee joint and hip pain or just not able to the same way.

just like “bigger people fall harder”, people who spend more “have much more potential to scale back” when times are tough—so long as you are squared away on debt and all that Jazz. We’ve gone through times where we need to cut, and we literally cut more than our entry level salaries payed us when first entered job market. It was crazy how much we spent but also how much we could n out spend if needed. Again, responsibility is name of game.
 
Sigequinox220 said:
So many people have this weird thing about credit. I only use credit card. I get free money for doing so. I also drink alcohol. Maybe once a month. Responsibility.

You NEED to be establishing credit history as an adult. I have zero late payments. Autopay set to full amount each month so never any interest. Went to state school for undergrad and paid off. State school for grad school also paid off. Put 40% down on new vehicle (could have paid for it outright, but There many advantages to structures debt). 100% payment history on mortgage. Mine and my wife’s credit score fluctuate between 780-810. This score gets us access to the lowest interest rates on anything we need to borrow for plus advantages elsewhere that credit score used as a metric of risk profile.

We have enough saved in cash for both wife and me to lose our jobs and maintain the SAME spending for 6 months— could stretch that to 10+ as we would obviously cut back on everything—and we been there. We have investments earning us money for retirement.

We know we should be investing more and saving a bit more but we enjoy our lifestyle and have nothing to be shameful about. We’ve taken care of all the basics. We want to enjoy our money while we are young, not when we are bitching about knee joint and hip pain or just not able to the same way.

just like “bigger people fall harder”, people who spend more “have much more potential to scale back” when times are tough—so long as you are squared away on debt and all that Jazz. We’ve gone through times where we need to cut, and we literally cut more than our entry level salaries payed us when first entered job market. It was crazy how much we spent but also how much we could n out spend if needed. Again, responsibility is name of game.
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There is a small population of adults who don't have credit, buy everything with cash, and make it work. But it IS a small population, and few can or want to live like that. One couple I know who do it live in a $400K house. So, it can work.

My wife and I, we like the comfort if things fell apart today we could get a car, or a new roof, or pretty much anything on credit if we need to. I like the psychological edge of having good credit, but if I had $100K or more saved up in cash, I would not need the credit.
 
Chuckman said:
There is a small population of adults who don't have credit, buy everything with cash, and make it work. But it IS a small population, and few can or want to live like that. One couple I know who do it live in a $400K house. So, it can work.

My wife and I, we like the comfort if things fell apart today we could get a car, or a new roof, or pretty much anything on credit if we need to. I like the psychological edge of having good credit, but if I had $100K or more saved up in cash, I would not need the credit.
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For sure im with you. Ironically, as alluded to by the things you mention, THEY are the ones taking on huge risk. 'everything in moderation' as they say. both extremes are bad. By far, the largest composition of that non-credit having population are those with no credit and low wage jobs. Before we relocated we had a nanny. Her car was an old POS and we didn't allow her to drive our baby in it. Finally that car eventually died completely. We gave her a $1500 bonus (she was great to us and our kid) to help with a downpayment on something newer than 10 years old. Guess what? She Still couldn't afford such a car because she had no credit score. no card, no loan history no anything. Her interest rate was going to be so high she wouldn't be able to afford the payments. Thankfully her parents co-signed for her, and their mediocre credit was enough to get much better loan. She was so happy to have her nice, clean, safe Camry (she was driving like a 1999 Pontiac or something). I think the car was a 2014 model year. We got an extra car seat for her car so she could take our daughter to library, park, town kids events and such. I never seen her so happy (she was definitely getting cabin fever). That happiness was not possible without SOMEONE having credit history. Period. Her bonus could not seal the deal itself
 
Grim said:
#1 reason people are in debt is they keep using credit cards, and keep buying the latest technology that they don't need.

My neighbors who are on government assistance still wind up having the absolute latest phone technology. Wish they'd put some of that money back into taking care of their property.
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Government phones?
 
Tailhunter said:
Sounds great doesn’t it? The thought of the government teaching your kids about debt and budgeting. Yippee!!
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I'd guess that the reason they don't is that they'd have to tell kids as young as 13 that the govt is going to skim 30% off the top and you only get some of it back if you spend time and money justifying why you deserve it.
That would run counter to them lowering the voting age to 16 since "kids" don't get jobs now until their mid 20s.
 
Hammer21b said:
I do! When I was overseas, most of my Soldiers were making good money. But their wives/girlfriends/babymomma was home spending it as fast as they got it! Mine paid off my truck, her car and put a good bit into savings and we had some to spend on a trip together when I got home. I always had a fairly new truck while I was in. The guys that were the same rank as me were always asking how I could afford it as we were making the same money. No, we were the same rank but I made more money than they did as I was in longer. And my wife was a nurse whose specialty was wound care and burns. She made very good. The other guys wives either couldn’t or wouldn’t work. We are going to Germany next Spring to do a river cruise and she will make sure it’s paid for before we depart. When we built our house, the bank tried to get us to build something bigger than we did saying with our combined income we could afford it. We didn’t want to afford it and built so it was paid for before my retirement. That’s how you come to not live payday to payday. Pay cash when you can, dont use credit cards unless you have to and pay them off ASAP!
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I get that a lot from peers. Always asking how I can afford things I have or saying “must be nice” whenever I get a new gun or take a trip. They may be the same rank as me but definitely have more than most, my wife is a nurse and we don’t have any kids.
 
noway2 said:
Years ago, I punched some numbers into the ORBIT calculator....
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I usually go to that site 2-3 times a month and play around with the numbers.

All the retired guys I’ve talked to said the estimates on ORBIT are pretty close.
 
wsfiredude said:
I usually go to that site 2-3 times a month and play around with the numbers.

All the retired guys I’ve talked to said the estimates on ORBIT are pretty close.
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Should be, given what the state spent on that Orbit program.
 
Jerzsubbie said:
It doesn’t matter how much you make, it’s no surprise that Americans suck at saving, suck at budgeting, and love to spend. Heck, look at the example our government sets for us!

When I worked retail, I did tons of credit apps for the in-house card, and I saw plenty of $8-10k/mo people who couldn’t qualify for a $2k credit card. Seemed ridiculous but if you’re carrying $100k in cc debt, I can see why they got declined.
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I used to insure a doctor whose wife was a PhD instructor. Together they made over $300K a year and he was ALWAYS broke. Seriously. I will bet his car insurance lapsed at least 3 times a year. He owned 4 dwellings and we had to put his houses in the FAIR plan b/c none of the accepted companies in NC would touch them.
 
tanstaafl72555 said:
I used to insure a doctor whose wife was a PhD instructor. Together they made over $300K a year and he was ALWAYS broke. Seriously. I will bet his car insurance lapsed at least 3 times a year. He owned 4 dwellings and we had to put his houses in the FAIR plan b/c none of the accepted companies in NC would touch them.
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I have a good friend who is a trauma/critical care doc. He went to undergrad, med school, residency, and fellowship all at UNC, where he met his wife (a nurse). The entire time he (and his wife, when they married) lived in a crappy 700 square foot apartment and drove old junkers. Even when he became an attending, they did not move, and they drove the same cars. He also moonlighted at Wake Med. Between the two of them they were making probably $300K. But his student loan debt was ginormous. They lived like that, never went out, ate PB&Js, double-paid the student loans. When they paid off student loans, he got a job out west, making a bit more. He upgraded to a used Toyota with 60K miles, and they bought a 1,200 square foot house in a modest neighborhood.

It is utterly and totally a mindset and a way of living.
 
Chuckman said:
I have a good friend who is a trauma/critical care doc. He went to undergrad, med school, residency, and fellowship all at UNC, where he met his wife (a nurse). The entire time he (and his wife, when they married) lived in a crappy 700 square foot apartment and drove old junkers. Even when he became an attending, they did not move, and they drove the same cars. He also moonlighted at Wake Med. Between the two of them they were making probably $300K. But his student loan debt was ginormous. They lived like that, never went out, ate PB&Js, double-paid the student loans. When they paid off student loans, he got a job out west, making a bit more. He upgraded to a used Toyota with 60K miles, and they bought a 1,200 square foot house in a modest neighborhood.

It is utterly and totally a mindset and a way of living.
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I am NOT a wealthy man, but a few years back I had a very healthy income. We did not upgrade our house. Instead we paid off our old one, and focused on stockpiling prepper stuff (gold/silver/guns/foodstuffs/medical). I drove old cars (my pickup had 200,000+ miles), and ran around town on a scooter. We just dont' live extravagantly. Never have, and don't want to. If the currency armageddon hits and gold goes to $10K an oz (silver maybe 200 an ounce or more?) STILL I want to live modestly. I may buy up good, income producing property, but I have never wanted cars, bling, and showy houses. Just makes you a target for criminals, both the private sector and public sector type.
 
DrScaryGuy said:
I'd guess that the reason they don't is that they'd have to tell kids as young as 13 that the govt is going to skim 30% off the top and you only get some of it back if you spend time and money justifying why you deserve it.
That would run counter to them lowering the voting age to 16 since "kids" don't get jobs now until their mid 20s.
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Heh. There was some guy in the 60s in Arizona (I think he was a machinist) who would call his employees in on Friday and sit them down and "pay" them. This is just an example, but he would take a thousand dollars in say, 20 dollar bills and say "this is your paycheck/salary." Then he pulled out Social Security, he explained to them that HIS "contribution" was the same as what they saw, so for example if $85 dollars came out, he threw in another 85 out of his pocket, saying "that WOULD go to you, by the way, but I have to pay it to the government, so you don't see it." Then he pulled out income taxes, state taxes, and any local taxes, federal unemployment insurance, etc etc etc. Then he pulled out the benefits, (health care, pension, etc) and gave them the remainder, usually about half what they made.

They got furious when the guy simply showed them what their social security would return over a 30 year period if invested in the crappiest bonds available, compared to their "trust fund" would pay thru social security.

The IRS came down on him like a plague, and just launched a series of hostile audits, painstakingly combing thru everything.... every year.

If every small business paid their employees this way we would have a tax revolt within a month, and you would not even have to go so far as detailing out where this money all goes..... that might bring forth a gallows.
 
Chuckman said:
I have a good friend who is a trauma/critical care doc. He went to undergrad, med school, residency, and fellowship all at UNC, where he met his wife (a nurse). The entire time he (and his wife, when they married) lived in a crappy 700 square foot apartment and drove old junkers. Even when he became an attending, they did not move, and they drove the same cars. He also moonlighted at Wake Med. Between the two of them they were making probably $300K. But his student loan debt was ginormous. They lived like that, never went out, ate PB&Js, double-paid the student loans. When they paid off student loans, he got a job out west, making a bit more. He upgraded to a used Toyota with 60K miles, and they bought a 1,200 square foot house in a modest neighborhood.

It is utterly and totally a mindset and a way of living.
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Drs have a tremendous amount of debt after med school which is why there are shortages in specialties like primary care because you can't make enough money to pay back your loans and live a upper middle class life like you should after all of that schooling. Most Drs are really in the hole coming out of med school but if you do it right you have a long career making a lot of money over your working life. I have lots of Dr friends and they live well.

I get that mentality but at the same time if you put in all that time and work I think it is a shame not to enjoy the fruits of your labor. Money is worthless until you spend it on something. I have never understood hoarding it for the sake of hoarding it. Having a ton of money in the bank but still living in a crappy house driving a crappy car and eating crappy meals makes no sense to me. I don't advocate spending more than you have or more than you make but life is to be lived. Money is made to be spent. I don't want to be one of those people who never did anything with their money and died with millions of dollars that get left to other people. I earned it and I am going to spend it. My wife and I live high on the hog by a lot of measures but at the same time we don't have expensive furniture. We don't wear expensive clothes. We live in a nice house but not one so nice that it puts a strain on us. There are a handful of things we spend real money on but on a daily we are cheap. We save on stuff on the everyday so we can have the extravagances in a few areas that bring us joy. To me I am all about making as much money as you can and spending it reasonably on things and experiences that make you happy.
 
Jeppo said:
I didn’t notice any mention of education here. In school I studied topics that have contributed absolutely nothing to the progression of my life. How is it that Personal Finance isn’t mandated study for kids?
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I think it is, now, at least in NC. Forrest was pushing pretty hard for it last year.
 
tanstaafl72555 said:
If every small business paid their employees this way we would have a tax revolt within a month, and you would not even have to go so far as detailing out where this money all goes..... that might bring forth a gallows.
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Regular withholding is one of the most insidious evils ever concocted, for exactly this reason.
 
wvsig said:
Drs have a tremendous amount of debt after med school which is why there are shortages in specialties like primary care because you can't make enough money to pay back your loans and live a upper middle class life like you should after all of that schooling. Most Drs are really in the hole coming out of med school but if you do it right you have a long career making a lot of money over your working life. I have lots of Dr friends and they live well.

I get that mentality but at the same time if you put in all that time and work I think it is a shame not to enjoy the fruits of your labor. Money is worthless until you spend it on something. I have never understood hoarding it for the sake of hoarding it. Having a ton of money in the bank but still living in a crappy house driving a crappy car and eating crappy meals makes no sense to me. I don't advocate spending more than you have or more than you make but life is to be lived. Money is made to be spent. I don't want to be one of those people who never did anything with their money and died with millions of dollars that get left to other people. I earned it and I am going to spend it. My wife and I live high on the hog by a lot of measures but at the same time we don't have expensive furniture. We don't wear expensive clothes. We live in a nice house but not one so nice that it puts a strain on us. There are a handful of things we spend real money on but on a daily we are cheap. We save on stuff on the everyday so we can have the extravagances in a few areas that bring us joy. To me I am all about making as much money as you can and spending it reasonably on things and experiences that make you happy.
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You sound like me.

For some people it's all just a game. Hoarding money IS the point. They can't enjoy things if they know it cost money.

Sent from my SM-J737V using Tapatalk
 
Tim said:
NC recently added Personal Finance to the High School curriculum as a required course for graduation. I believe that goes into effect 2020-2021 school year.

https://www.dpi.nc.gov/districts-sc...s-and-initiatives/personal-financial-literacy

The law calls out these topics specifically:
  1. (1) The true cost of credit.

  2. (2) Choosing and managing a credit card.

  3. (3) Borrowing money for an automobile or other large purchase.

  4. (4) Home mortgages.

  5. (5) Credit scoring and credit reports.
(5a) Planning and paying for postsecondary education. (6) Other relevant financial literacy issues.
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My son took the class this year as a freshman. His particular teacher went high school to grave. Taught all of the above plus estate planning. I was very impressed with everything he picked up.
 
Ferrisfan said:
My son took the class this year as a freshman. His particular teacher went high school to grave. Taught all of the above plus estate planning. I was very impressed with everything he picked up.
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I wish this were a Senior year course. Get them just before they walk on campus and start getting handed CC applications at every turn.
 
wvsig said:
Drs have a tremendous amount of debt after med school which is why there are shortages in specialties like primary care because you can't make enough money to pay back your loans and live a upper middle class life like you should after all of that schooling. Most Drs are really in the hole coming out of med school but if you do it right you have a long career making a lot of money over your working life. I have lots of Dr friends and they live well.

I get that mentality but at the same time if you put in all that time and work I think it is a shame not to enjoy the fruits of your labor. Money is worthless until you spend it on something. I have never understood hoarding it for the sake of hoarding it. Having a ton of money in the bank but still living in a crappy house driving a crappy car and eating crappy meals makes no sense to me. I don't advocate spending more than you have or more than you make but life is to be lived. Money is made to be spent. I don't want to be one of those people who never did anything with their money and died with millions of dollars that get left to other people. I earned it and I am going to spend it. My wife and I live high on the hog by a lot of measures but at the same time we don't have expensive furniture. We don't wear expensive clothes. We live in a nice house but not one so nice that it puts a strain on us. There are a handful of things we spend real money on but on a daily we are cheap. We save on stuff on the everyday so we can have the extravagances in a few areas that bring us joy. To me I am all about making as much money as you can and spending it reasonably on things and experiences that make you happy.
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Don't get me wrong, once he eliminated his student loan he had more financial freedom. last I heard, about a year ago, he's doing pretty well for himself, and living his life commensurately, but still well within his means. But he understands the nature of debt.

also less I heard, he's still driving a Toyota with 200,000 miles on it though.
 
Tim said:
I wish this were a Senior year course. Get them just before they walk on campus and start getting handed CC applications at every turn.
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My daughters get CC offers for 0% for twelve months.... then 24-26% after that, all go into the paper shredder.
 
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