5 ms·

Big mortgage + 2 big car loans + private school for your kids + sports for your kids + the expensive yearly vacation you’ve been taking and don’t want to skip +

Big mortgage + 2 big car loans + private school for your kids + sports for your kids + the expensive yearly vacation you’ve been taking and don’t want to skip + name brand clothes for your kids + meal services, etc, etc. And sure maybe student loans in there, credit card debt, maybe medical debt, care for extended family members. It’s super easy to blow through a 250K salary (which is not 250k in your pocket each year.)

autoexec 4y ago
more realistically for most people than private schooling and expensive vacations are day care and routine medical bills (as opposed to debt). Day care costs some families nearly what I spend on rent, and that's just for standard run of the mill understaffed day care services, not private/in-home or specialized care. Medical expenses get insane very quickly, with many people spending hundreds every month on medications alone, but add recurring costs like dental, vision, and mental health services to that and you can blow through huge amounts of cash every year. Most people in the US were already living paycheck to paycheck before the pandemic which ate into what little savings they had or forced them into credit card debt and now sky-high prices are putting even more pressure on people's budgets. It'd be crazy if the number of people living paycheck to paycheck wasn't expanding.
gopalv 4y ago
> It’s super easy to blow through a 250K salary (which is not 250k in your pocket each year.) As someone in that side (if I made 180k post-tax, I would be living paycheck to paycheck - I became aware of it because I'm funemployed with a big spreadsheet), it is not at all poverty, but it is more of a cashflow quirk when they say this. They're saying their outflow matches their in-flow, but not that all of it is actually being spent (the mortgage at 2.5% is equity). Not having a bunch of cash in the bank or merely maintaining a 100k rainy day balance isn't paycheck to paycheck, even though these people might describe it so. So the people who make 250k who live "paycheck to paycheck" are actually sitting on top of a big comfort cushion which they are loathe to remove for financial cushion. That is okay if it is a deliberate choice instead of a "save face, keep with the joneses" peer pressure to keep spending. This is not even remotely comparable to actual poverty where the floor is fast approaching you if you miss a month. These articles can be described as feeding some people's "more money can't fix money problems" and some other's mistaken belief that spending everything you get is what paycheck to paycheck means. Also totally different if it is debt you are paying off instead of actually spending. Also a hit-piece on the "earn and spend" millenials, which is somewhat fair because I don't know if I could be this affluent in my retirement, the way the economy is tilting.
- sparker72678 4y ago
  This is a great point.
- flave 4y ago
  All great points and I agree. What's different about this generation (esp in the UK where I live) is that they're becoming reasonably asset rich but they feel poor day to day. This is because they spend a lot of their income on mortgage payments (much of which is equity) and they're auto enrolled into pretty decent pensions which also is a building asset (but not one that they 'feel'). Getting things you can certainly afford on credit (which may be the right decision given low rates plus high inflation) compounds the problem. You're going to buy a car for 40k after a year of saving. You spend 11 months looking at a big number building up in your account thinking 'hey I'm rich' or you spend 12 months with 'no money in your account' feeling poor. But the outcome is the same. Cheap credit creates many situations where credit is better than cash - so will make the feeling of 'no money' worse.
2Gkashmiri 4y ago
- iancmceachern 4y ago
  My parents don't live where my career is, where my career is its too expensive to buy a home even at my relatively high salary until you've saved for 10 years. Had I stayed where my parents are geography my career would have stagnated and peaked 10 years ago. Where there are good jobs and upward mobility home prices are also high with a high barrier to entry ($250k+ down payment).
  - namecheapTA 4y ago
    Do you think this was a worthwhile trade-off? Would life be that much worse back home near family, with a stagnated career owning your own cheaper home?
    - 2Gkashmiri 4y ago
      you can earn 100k, blow 90% of that for rent/mortgage and general living expenses in a big city or get to live with your parents and earn half while saving much more. maybe that doesn't appeal to a lot of people, they look at the CTC as opposed to your net savings
    - iancmceachern 4y ago
      I didn't for a while, now I think it was.
  - 2Gkashmiri 4y ago
    in 2020, there were massive layoffs across the world and in india, workers from the city simply moved back to their native homes to weather the storm. why didn't americans do that and decided to penny pinch/take more loans rather than saving costs? In the world of remote-first, do you really think geography matters as much?
    - 4y ago
throwaway0a5e 4y ago
And all these people look at the man living within his means and think he's "doing it wrong" because he's piling his family into an old Ford Taurus and wearing Walmart jeans instead of spending twice as much for a Camry and Levis.

autoexec 4y ago

more realistically for most people than private schooling and expensive vacations are day care and routine medical bills (as opposed to debt). Day care costs some families nearly what I spend on rent, and that's just for standard run of the mill understaffed day care services, not private/in-home or specialized care. Medical expenses get insane very quickly, with many people spending hundreds every month on medications alone, but add recurring costs like dental, vision, and mental health services to that and you can blow through huge amounts of cash every year. Most people in the US were already living paycheck to paycheck before the pandemic which ate into what little savings they had or forced them into credit card debt and now sky-high prices are putting even more pressure on people's budgets. It'd be crazy if the number of people living paycheck to paycheck wasn't expanding.

gopalv 4y ago

> It’s super easy to blow through a 250K salary (which is not 250k in your pocket each year.) As someone in that side (if I made 180k post-tax, I would be living paycheck to paycheck - I became aware of it because I'm funemployed with a big spreadsheet), it is not at all poverty, but it is more of a cashflow quirk when they say this. They're saying their outflow matches their in-flow, but not that all of it is actually being spent (the mortgage at 2.5% is equity). Not having a bunch of cash in the bank or merely maintaining a 100k rainy day balance isn't paycheck to paycheck, even though these people might describe it so. So the people who make 250k who live "paycheck to paycheck" are actually sitting on top of a big comfort cushion which they are loathe to remove for financial cushion. That is okay if it is a deliberate choice instead of a "save face, keep with the joneses" peer pressure to keep spending. This is not even remotely comparable to actual poverty where the floor is fast approaching you if you miss a month. These articles can be described as feeding some people's "more money can't fix money problems" and some other's mistaken belief that spending everything you get is what paycheck to paycheck means. Also totally different if it is debt you are paying off instead of actually spending. Also a hit-piece on the "earn and spend" millenials, which is somewhat fair because I don't know if I could be this affluent in my retirement, the way the economy is tilting.

sparker72678 4y ago
This is a great point.
flave 4y ago
All great points and I agree. What's different about this generation (esp in the UK where I live) is that they're becoming reasonably asset rich but they feel poor day to day. This is because they spend a lot of their income on mortgage payments (much of which is equity) and they're auto enrolled into pretty decent pensions which also is a building asset (but not one that they 'feel'). Getting things you can certainly afford on credit (which may be the right decision given low rates plus high inflation) compounds the problem. You're going to buy a car for 40k after a year of saving. You spend 11 months looking at a big number building up in your account thinking 'hey I'm rich' or you spend 12 months with 'no money in your account' feeling poor. But the outcome is the same. Cheap credit creates many situations where credit is better than cash - so will make the feeling of 'no money' worse.

2Gkashmiri 4y ago

iancmceachern 4y ago
My parents don't live where my career is, where my career is its too expensive to buy a home even at my relatively high salary until you've saved for 10 years. Had I stayed where my parents are geography my career would have stagnated and peaked 10 years ago. Where there are good jobs and upward mobility home prices are also high with a high barrier to entry ($250k+ down payment).
- namecheapTA 4y ago
  Do you think this was a worthwhile trade-off? Would life be that much worse back home near family, with a stagnated career owning your own cheaper home?
  - 2Gkashmiri 4y ago
    you can earn 100k, blow 90% of that for rent/mortgage and general living expenses in a big city or get to live with your parents and earn half while saving much more. maybe that doesn't appeal to a lot of people, they look at the CTC as opposed to your net savings
  - iancmceachern 4y ago
    I didn't for a while, now I think it was.
- 2Gkashmiri 4y ago
  in 2020, there were massive layoffs across the world and in india, workers from the city simply moved back to their native homes to weather the storm. why didn't americans do that and decided to penny pinch/take more loans rather than saving costs? In the world of remote-first, do you really think geography matters as much?
  - 4y ago

throwaway0a5e 4y ago

And all these people look at the man living within his means and think he's "doing it wrong" because he's piling his family into an old Ford Taurus and wearing Walmart jeans instead of spending twice as much for a Camry and Levis.