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I don't think these things are necessarily mutually exclusive. A fair bit of financial literacy should enable someone to save at least some income even at minim

I don't think these things are necessarily mutually exclusive. A fair bit of financial literacy should enable someone to save at least some income even at minimum wage (barring catastrophes and good old fashioned bad luck). The lifestyle you'd need to save on a minimum wage is pretty unsavory, though, and not many would enjoy living that way forever.

imsofuture 7y ago
And of course, billions of dollars are being spent to convince you that you shouldn't actually live that thrifty lifestyle, even if you are able to.
- brighter2morrow 7y ago
  This is the bigger thing. "Go to the movies, buy Netflix, buy Amazon Prime" etc etc etc. There's so much more things the financially illiterate feel compelled to buy these days.
zanny 7y ago
I feel like this might be coming from a position far above minimum wage, because in practice the poor aren't that stupid. You get trapped in cycles of incredible housing expenses keeping you in constant short term debt and the lack of income leading you to constantly seek new revenue sources, but being in that condition is inherently expensive and money in is always trying to fill up a bucket with a hole in it.
- bluGill 7y ago
  Back in my college days I was able to live on minimum wage, including paying tuition. I knew several other people doing the same thing and even supporting a family on their income. Their housing expenses where a lot lower than you would believe possible: they lived in a tiny apartment in the bad part of time: they had a warm place (hot in summer: no AC), a dry roof, a kitchen and bathroom. We all had a cheap car, with enough money set aside to fix it as required. Of course we were the minority. Most people live exactly at their means (including whatever they can borrow). I understand, I like more space as well: I like my toys as much as everybody. I just believed my future was better if I didn't get myself into debt now.
  - Spellman 7y ago
    But this was temporary pain for future gain. Imagine doing that for your whole life.
    - ndiscussion 7y ago
      The thing is.. when you refuse endure this temporary pain, the natural consequence is that the rest of your life will be filled with more pain. Sadly for some of us (myself included at many times in my life), we just can't make those decisions as easily as we hoped. Willpower and determination seemed so easy when I was young.
    - the_gastropod 7y ago
      This is where a little knowledge can go a long way. Assuming a ~10% interest rate (just to make the math easy, and is approximately what you'd expect in the stock market), it takes ~6.5 years of constant savings before your saved money earns more than the amount saved each year. In other words, you can give future you (6.5 years in the future) a raise over 100% of your current income by beginning to save some percentage of it (e.g. 10%). At 6.5 years, the 90% you can spend will be greater than your 100% from 6.5 years prior, and you get to continue to save 10%, further increasing both your income and your nest egg.
- SkyBelow 7y ago
  >because in practice the poor aren't that stupid I think it would be far better defined as learned helplessness in financial matters instead of being stupid. They can be overall smart people, but past experience has taught them views of money that are not beneficial to financial stability. They might even be able to give a lesson on good financial decision making, but on an emotional level they have trouble applying it to themselves. A much more jarring example of this is behaviors resulting from food insecurity in children. Children who come from very food insecure situations will hoard food even when they are now in a food secure environment. Often this will include hoarding food that does not keep, and any attempts to change this behavior just result in the hoarding being better hidden. From what I remember the advice of foster/adoptive parents in this situation is to provide food meant for hoarding that the child can stockpile and to let the next few years of food security slowly get the child to adjust, recognizing that some level of food hoarding might occur throughout their lifetime.
monocasa 7y ago
Not when a minimum wage isn't a living wage. That sort of by definition means you don't have enough extra to save.
- tdhoot 7y ago
  How is a living wage defined, precisely? Is it defined as the wage an "average" person would need to earn to live? Or the wage a "frugal" person would need to earn to live?
  - monocasa 7y ago
    https://en.wikipedia.org/wiki/Living_wage https://en.wikipedia.org/wiki/Living_wage
    - the_gastropod 7y ago
      From this page: "Due to the flexible nature of the term "needs", there is not one universally accepted measure of what a living wage is and as such it varies by location and household type" Which I think is to the gp's point...
      - monocasa 7y ago
        Cool, the lack of a living wage _under all of those definitions_ means the lack of ability to save.
        tdhoot 7y ago
        Is your claim that there is no way to live under a minimum wage in America right now?
        monocasa 7y ago
        For the vast majority of people in the US, completely supporting themselves on 40 hours a week of a minimum wage is impossible, yes.

imsofuture 7y ago

And of course, billions of dollars are being spent to convince you that you shouldn't actually live that thrifty lifestyle, even if you are able to.

brighter2morrow 7y ago
This is the bigger thing. "Go to the movies, buy Netflix, buy Amazon Prime" etc etc etc. There's so much more things the financially illiterate feel compelled to buy these days.

zanny 7y ago

I feel like this might be coming from a position far above minimum wage, because in practice the poor aren't that stupid. You get trapped in cycles of incredible housing expenses keeping you in constant short term debt and the lack of income leading you to constantly seek new revenue sources, but being in that condition is inherently expensive and money in is always trying to fill up a bucket with a hole in it.

bluGill 7y ago
Back in my college days I was able to live on minimum wage, including paying tuition. I knew several other people doing the same thing and even supporting a family on their income. Their housing expenses where a lot lower than you would believe possible: they lived in a tiny apartment in the bad part of time: they had a warm place (hot in summer: no AC), a dry roof, a kitchen and bathroom. We all had a cheap car, with enough money set aside to fix it as required. Of course we were the minority. Most people live exactly at their means (including whatever they can borrow). I understand, I like more space as well: I like my toys as much as everybody. I just believed my future was better if I didn't get myself into debt now.
- Spellman 7y ago
  But this was temporary pain for future gain. Imagine doing that for your whole life.
  - ndiscussion 7y ago
    The thing is.. when you refuse endure this temporary pain, the natural consequence is that the rest of your life will be filled with more pain. Sadly for some of us (myself included at many times in my life), we just can't make those decisions as easily as we hoped. Willpower and determination seemed so easy when I was young.
  - the_gastropod 7y ago
    This is where a little knowledge can go a long way. Assuming a ~10% interest rate (just to make the math easy, and is approximately what you'd expect in the stock market), it takes ~6.5 years of constant savings before your saved money earns more than the amount saved each year. In other words, you can give future you (6.5 years in the future) a raise over 100% of your current income by beginning to save some percentage of it (e.g. 10%). At 6.5 years, the 90% you can spend will be greater than your 100% from 6.5 years prior, and you get to continue to save 10%, further increasing both your income and your nest egg.
SkyBelow 7y ago
>because in practice the poor aren't that stupid I think it would be far better defined as learned helplessness in financial matters instead of being stupid. They can be overall smart people, but past experience has taught them views of money that are not beneficial to financial stability. They might even be able to give a lesson on good financial decision making, but on an emotional level they have trouble applying it to themselves. A much more jarring example of this is behaviors resulting from food insecurity in children. Children who come from very food insecure situations will hoard food even when they are now in a food secure environment. Often this will include hoarding food that does not keep, and any attempts to change this behavior just result in the hoarding being better hidden. From what I remember the advice of foster/adoptive parents in this situation is to provide food meant for hoarding that the child can stockpile and to let the next few years of food security slowly get the child to adjust, recognizing that some level of food hoarding might occur throughout their lifetime.

monocasa 7y ago

Not when a minimum wage isn't a living wage. That sort of by definition means you don't have enough extra to save.

tdhoot 7y ago
How is a living wage defined, precisely? Is it defined as the wage an "average" person would need to earn to live? Or the wage a "frugal" person would need to earn to live?
- monocasa 7y ago
  https://en.wikipedia.org/wiki/Living_wage https://en.wikipedia.org/wiki/Living_wage
  - the_gastropod 7y ago
    From this page: "Due to the flexible nature of the term "needs", there is not one universally accepted measure of what a living wage is and as such it varies by location and household type" Which I think is to the gp's point...
    - monocasa 7y ago
      Cool, the lack of a living wage _under all of those definitions_ means the lack of ability to save.
      - tdhoot 7y ago
        Is your claim that there is no way to live under a minimum wage in America right now?
        monocasa 7y ago
        For the vast majority of people in the US, completely supporting themselves on 40 hours a week of a minimum wage is impossible, yes.