“There’s this wild disconnect between what people are experiencing and what economists are experiencing,” says Nikki Cimino, a recruiter in Denver.
The floor is rising! But, the floor is lava.
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Yep. That’s the truth. I didn’t even feel like I was treading water until my late 40s and we were making decent money by any standard. A mortgage, a single car payment, all the insurances (family health, dental, home, car) you need to pay for, data connections (we don’t have cable tv), taxes (FSaLT), and skimming money off the top for a 401k and there’s very little left. Especially with the all the rising prices of groceries (our bill feels like it’s almost doubled) and being subscription-fee’d to death.
Inflation is hitting people hard. And it’s happening globally not just in the USA.
Last night I ordered some food and the delivery agent told me she is living in her car because people are not tipping well and she can’t afford rent anymore. Paid for her stay in a motel for now.
“I just made the most expensive purchase of my life and I can’t figure out why I am living paycheck to paycheck.”
To be fair, they don’t actually own their house if they’re paying a mortgage.
It wouldn’t be any different if she was renting.
I’m not sure why they call her a homeowner when the bank actually owns her house.
They get to treat the property as if they own it from day one. Additions, changes…etc. lots of differences from renting.
The bank does not own her house. She owns her house. The bank holds a lien on it. Holding a lien on something is not the same as owning it.
In theory, over time you own more and more of a share of the house while the bank owns less and less. That’s different from renting.
Still, if you literally can’t afford the mortgage payments then it’s still a bad deal.
Why would buying a house have you living cheque to cheque? Do you think you buy something on credit and then all your income gets taken until it’s paid back? I’m genuinely confused about what you’re trying to say, here.
Probably because she bought more house than she could afford, and prioritized that over paying off get credit cards.
Right, so then, her issue wasn’t the size of the purchase, is that she didn’t do the maths beforehand to make sure it was a good idea.
So why are you trying to insist that the problem is the amount of money spent, rather than this lady not doing the maths?
I don’t understand the difference. It sounds like two ways of saying the same thing.
There’s not much of a difference when the size of the purchase determines “the maths” of the monthly payment.
I did the maths before I purchased my home. The maths should inform the size of the purchase, not the other way around. I don’t get why you lot insist the problem is just how much she bought, rather than the fact that she didn’t do the maths.
We insist because “the monthly payment” is directly proportional to the purchase price of the home. You’re the one who seems to think the monthly payment is somehow completely independent of the price.
I’m sorry you can’t tell the difference, let me try again with a question: Does everyone who “makes the most expensive purchase of their life” end up living cheque to cheque because of that purchase?
No.
Why not, if the size of the purchase is the dominant factor in the equation? Which, remember, is quite literally what the OP here said: https://lemmy.world/comment/8540177
“I just made the most expensive purchase of my life and I can’t figure out why I am living paycheck to paycheck.”
So I ask again: why are you trying to insist that the problem is the amount of money spent, rather than this lady not doing the maths? Surely it makes sense that the not doing the maths is the problem here?
If I borrow a half million from the bank, I have to pay it back in monthly installments, commonly known as a mortage. Those costs are now added to your regular expenses.
Most rents are cheaper than mortages. So taking on a giant purchase + the cost of the mortage is a huge financial cost. Yes, she gets an asset (which she could sell at any point) but it’s going to be more expensive.
A quick look at Denver apartments for rent confirms this, a lot of 1 bedrooms available for between $400 and $500 cheaper a month.
Most rents are cheaper than mortgages
Laughs in Canadian
Most rents are cheaper than mortages.
Yeah because rental properties are often shitholes and it skews the numbers
For the same exact property, rent is absolutely more expensive than a mortgage. Rent is usually paying for someone’s mortgage for them, why would they make it lower? Who are these generous landlords?
Yeah because rental properties are often shitholes and it skews the numbers
Sure but my point is that this lady has made an extremely expensive purchase and now continues to pay for it.
Most rents are cheaper than mortages.
Yeah because rental properties are often shitholes and it skews the numbers
Rent is usually paying for someone’s mortgage for them, why would they make it lower? Who are these generous landlords?
Ahhh, there’s the misunderstanding. Local/single owner rentals are actually a small proportion of tenancies. Most are large organizations which have purchased a large building etc. It’s actually a kind of fascinating issue but worth reading about!
You are surprisingly comfortable condescending to people when you’re incredibly wrong and clearly have no idea how any of this works.
- A mortgage doesn’t get added to your expenses, a mortgage replaces some of them. Specifically, it replaces rent, most peoples’ largest expense;
- Mortgage payments repay some interest and the rest goes straight into equity;
- If your home gains market value, you don’t pay more mortgage, but you do get more equity;
- A fixed rate mortgage means your housing costs stay the same for the term of the mortgage.
Seriously, if you’re in the US you can get a fixed rate mortgage for a term of 30 years. There’s literally no way to lose that one. Rates go up? Haha fuck my bank I pay the same mortgage. Rates go down? Haha fuck my bank I refinance so now I pay less even if rates go back up again.
Buying property as soon as I was able was one of the best decisions I’ve ever made, and I was not able to buy it particularly early. My head hurts a little bit whenever I think about how much money I’ve burned on rent in my life. And that phrasing is deliberate, I may as well have set the money on fucking fire for all the future good it bought me.
Edit: By the way:
Yes, she gets an asset (which she could sell at any point) but it’s going to be more expensive.
It’s going to be more expensive than what? Renting it? If someone rents something, they don’t get an asset. You only get assets when you buy them, because they have to be legally yours to call them an asset. So no, buying isn’t a more expensive way to get the same asset. It’s the only way to make it your asset.
Also, it’s not like she’s paying for her mortgage in addition to whatever she was doing previously (presumably rent). The mortgage payment replaces your rent payment.
She’s paying like 17-18% on credit card debt that she didn’t pay off because she saved a down payment. This is just financial illiteracy
True but there is also the added expense of maintaining the property and having a rainy day fund for emergencies related to homeownership.
There’s also taxes in addition to that. Which can cost the same as rent.
Taxes are usually included when people say how much their mortgages is per month because most people pay their property taxes through an escrow account attached to it
True, though home property taxes can grow surprisingly quickly and catch people off guard.
It kind of does, though. She look out a mortgage and those have a monthly cost.
What OP is probably saying is that if you have a certain income level and then you choose to take on a debt that you’re going to have trouble paying back, that’s mistake that you made and should have seen coming. This wasn’t an unforseen medical bill, the person in the article could have chosen to buy a cheaper condo or rented until rates were more favorable.
What OP is probably saying is that if you have a certain income level and then you choose to take on a debt that you’re going to have trouble paying back, that’s mistake that you made and should have seen coming
If that’s what they’d said, I wouldn’t take issue with it. Of course a person has to do the maths, buying a home isn’t a light decision. But the size of the purchase isn’t at all related to living cheque to cheque, which was in the words they chose.
Yes it is. Higher home cost = higher monthly payment. Why would it not be related?
Because the purchase is broken up into installments and paid back monthly. That is why, despite my home being the most expensive thing I have ever purchased, I am not living cheque to cheque. If her problem were the size of the purchase alone, then I too would be living cheque to cheque and so would all other homeowners with mortgages.
Edit: I should point out that my cost of living has actually dropped since I bought my home, because I did the maths to be sure it would. Most expensive purchase of my life saved me money. Go figure, right?
What the fuck is this hair splitting pedantry
She also really should have finished paying off that CC debt and delayed the down payment; that’s just a killer and is almost certainly at 3 or 4 times the interest rate of her mortgage, which incidentally could have been a bit lower if her debt-to-income ratio were better. Shit sucks, but somebody who’s doing okay and fucks it up gets less sympathy from me than people who would do anything to be living paycheck to paycheck with a steady income and home ownership.
Also gotta love how many of these people remember Trump fondly because he was president WHILE THE GOVERNMENT WAS CUTTING THEM CHECKS! That’s absolutely not gonna be his plan in round two.
Hey, somebody’s gotta pay for the highest corporate profits in 70 years.
Exactly that. On average the economy is doing fine but it’s skewed very heavily towards the top and nothing much for the 90%. The median income is actually decreasing.
That’s not true. The bottom 10% are actually doing better than the wealthy, you just don’t have any of those people in your social circles.
Yes, bottom 10% are doing better and the top 10%. That means the middle is getting hollowed out and the while thing turns into a very divided society. That’s not a good thing.
It’s not a good thing, but it’s better than the blatant “rich get richer, everyone else gets fucked” economy we’ve had for the past few decades.
And doesn’t it make sense that we improve the situation of the poorest first?
blatant “rich get richer, everyone else gets fucked”
and now you have a rich get richer, almost everyone else gets fucked economy. Yay, progress.
Looking at history, it feels more like an attempt to make sure the poorest don’t fall into the “nothing left to lose” category that can cause so much trouble.
Oh no, what a…terrible…thing…?
and now you have a rich get richer, almost everyone else gets fucked economy. Yay, progress.
Yes. Things were more bad, and now they are less bad. Vote in more Democrats, and things will continue to get less bad. Eventually, things will be good. That’s how progress works.
I would LOVE to see a source on this, but I have a feeling I already know where it is coming from.
Would you prefer the Economic Policy Institute, Politico, or CNBC?
None of this matters when low income people have been getting screwed for 30 years. 3 years of growth means almost nothing when you put it in proper context. It’s just a way for the upper class to gaslight people.
There are people out there still getting paid $9 an hour which wasn’t liveable 15 years ago when that was my wage. If this trend continues, calling it wage slavery won’t be hyperbole anymore.
Plus none of these articles talk about the middle 80% who have not seen their pay keep up with inflation over the last 5 years, or the fact that the price of many goods has exceeded inflation on top of that. Not to mention the housing crisis.
It’s not hard to figure out why people think the economy sucks.
There are people out there still getting paid $9 an hour
There are now fewer people out there still getting paid $9 an hour. Why are you against progress?
“Things are better but still not perfect therefore this is meaningless” is a terrible take.
I think the wording in your original comment is pretty misguided. Nowhere does it say the poor are “doing better than” the wealthy. They just had the strongest short-term wage growth since covid. This does not equate to prosperity. Perhaps it is you that has the restrictive social circle.
The wording is obvious to anyone with a brain. So given that this is lemmy, you’re absolutely right and I’ll dumb it down. My apologies.
I think it’s unfortunate that you’re being so hostile. It was an interesting point and very good sources that you brought to the discussion. But you’ve decided to play the "you’re all ‘autists’ " card.
The wording was obvious. If someone though OP meant “the bottom 10% can afford more yachts than the wealthy” that’s a logic problem.
I disagree. The connotation and literal meaning of the phrase “doing better than”, combined with the comment on social circles indicates that they’re trying to suggest the poor are somehow doing well, whatever that means.
That’s how I read it, anyway. And I think that’s why they’re getting down voted as well.
Important to note:
Companies aren’t just raising prices enough to cover costs, they’re padding their margins on top.
Just saying that their profit is higher means nothing because of inflation. Inflation will mean that their profits are more often than not the highest they have ever been every year. But the highest margins? That shows they are price gouging.
If you want to know how bad we’re being fucked, search for the PPI, the producer price index. CPI, the one we always hear about, is the measure of inflation to us, the consumer. The PPI is the measure of inflation to producers, what they pay for goods and services to produce the goods and services we buy.
The PPI has been back to “normal” for a while now. Pretty much as soon as the post COVID logistics issues were mostly ironed out. The difference between PPI and CPI changes is almost all profit.
We don’t get daily articles on the PPI though, I wonder why.
Tell people about PPI whenever you can, online or off, the more people know, the better. It’s easy enough to say inflation is just down to greed but being able to back it up by comparing two simple charts will help people really understand.
My favorite part was how PPI reversed inflation every month from Feb 2023 onward, but CPI only continued to show positive inflation. 😃
I couldn’t find a comparable historical CPI chart on the BLS website, just a 12 month average and historical data by region. Are you able to find something to compare that chart to? It’s kind of difficult to grasp intuitively (without a comparison, that is).
I edited the links to try to get more apples to apples. For the PPI just deselect the blue line and compare red lines between the two. Those should give 12 month change numbers for all goods and services unless I screwed it up.
Thank you! And thank you for finding and linking all that, it is very informative!
I’m in this article and don’t like it.
Her mortgage is $1650/mo, which is incredibly reasonable in Denver. I think this specific person’s problems have more to do with her recent divorce. She was used to splitting costs, and probably spent quite a bit on the divorce itself
…that’s more than I’d make with minimum wage in my state, which I don’t think is that far behind colorado. Yikes.
ETA: ok nvm I did math and if you make a little over $10/hr 40 hrs a week, your entire paycheck would go just toward that.
Someone making minimum wage is unfortunately not likely to be getting a mortgage.
You’re still off unfortunately.
Full time at $10/hr is $1600/month before income tax. For simplicity, we’ll say federal+state tax is 15% so now we’re at $1360. Social security is 6.2% so take away another $100.
Then, of course, this is the United States where most people have to rely on their employees for “affordable” health insurance - and often still have money taken out of their check for it.
So now we’re at $1000-1260 monthly take home pay for a full time job at $10/hr
The standard deduction is $13850 so there’s no way you’re paying 15% tax on an income of $20,000
You’re paying about a little over $600 federal plus whatever state tax and usually state tax is less than federal, but depends on the state. In some states you don’t pay state income taxes.
So best case scenario you pay a little over 3% federal and no state.
At that salary you’d also get EIC and likely pay no taxes at all.
“affordable” health insurance
At that income, you would qualify for Medicaid.
Also I don’t think you pay income tax when your income is that low.
As someone with mortage of 520€/month there’s nothing reasonable in what she’s paying. I don’t care if it comes with 6 bedrooms, a maid, cook, gardener and a chauffeur - I’m not paying that. I’m more than fine in my tiny granny cottage on the outskirts of a middle sized city.
You couldn’t rent a shack that had a floor made of perpetual dirty needles for $520/month.
She’s paying $1650 for a house? You’d pay more for a house in a neighborhood where every night is the purge here.
That’s supply and demand, for you.
It’s always been pretty interesting to me how crazy the price of living changes. $1650 a month for a house seems insane to me.
$1650/mo for a mortgage in Denver, CO at 5.25% interest is a fantastic price. You’re going to find it can be a lot less in a lot of places in the US, but not in highly desirable major metropolitan areas
lol i’m looking at paying ~4500/mo for a 3br 2ba ~1300sqft.
In order to keep your mortgage at 1/3 your income, you would need to be making $700,000/yr.
You’re calculating it based on take home pay or something? because 1/3rd of 700,000 / 12 = $19,250/mo
Household income is about 230k. Mortgage comes out to less than 50% of take home pay. 230k/12 = 19166/mo (gross) 4500 is 23% of gross income.
Afaik every couple around here by 30 with professional experience and a degree is making over 200k (so 100k per person.) I’ve seen IT support roles for 100k+ (example from the highest paying company i’ve ever seen, liberty mutual insurance: https://searchjobs.libertymutualgroup.com/careers?location=Boston%2C Massachusetts%2C United States&department=Technology&pid=618496295577&domain=libertymutual.com&sort_by=relevance )
Nah I’m probably just dumb and did the math wrong. Those figures are still dizzying to me, as a BA in the Midwest. $100,000/yr is considered pretty decently middle class, I can’t imagine anyone here paying $4,500/mo on rent. Maybe I’m just very lucky.
A room is basically ~1k/mo here if you’re renting with roommates, maybe up to 1500 if the place is really nice. 1800 for a studio, give or take.
Entry level roles are usually 60kish+ but everybody hits 100k very quickly in any kind of white collar gig. With the pharma industry being here a huge portion of roles in greater Boston are pharma or pharma adjacent with 200k-400k salaries(+bonus/options) which drive up the cost of housing like crazy. Plus some finance and legal too. There’s a few ad agencies, plenty of healthcare companies and some world class hospitals. Plus a significant amount of highly desirable colleges that lure in the rich foreign exchange students. It makes for a really expensive housing situation unfortunately.
That is absolutely ridiculous
You must be in an area like SF or NYC. Or this is a luxury space.
At a certain point - isn’t it just cheaper to move to a cheaper area?
Not that it’s easy. It’s what I had to do. 6 hours away from friends/family.
Wages took a 25% hit. Bills took a >50% hit so came up on top.
Wife refuses.
$1650/mo hopefully includes taxes and homeowners insurance
Yes, mortgages include an escrow payment for these
It’s as if workers can only improve their condition in a capitalist society when the pie grows exponentially, but continual exponential growth is an impossibility in a physical world.
Do you even know what exponential growth means? Because if you feel qualified to criticize capitalism you should know.
It doesn’t need to grow exponentially, just faster than the population.
There’s a term for this, HENRY. High Earner, Not Rich Yet. The lie is the “Yet”. Millennials and Gen Xers have been struggling to reach the middle class that is kept perpetually out of reach. They have given up on the idea of financial solvency and are going into debt to indulge in luxuries like having children, going on vacations, and living somewhere that isn’t a complete shithole. Saving for retirement is as realistic as training to live on Mars, so why bother? Keep digging a financial hole and then lie down and die in it.
What most people don’t realize is that once you have excess income, you have options. What you do with the excess is what matters. If you don’t save and invest it, you’ll be living paycheck to paycheck for the rest of your life.
A lot of folks think being rich means just spending money on whatever you want. That’s not really the case. If you spend the excess on fancy cars or luxury items that make others think you’re rich, the irony is you’ll be working for a long time and never actually become financially independent.
I try to save whatever extra I have, because everyone says I need to have six months of expenses saved.
The problem is that before I can save up enough to cover that there’s some huge expense that I need to cover that empties it out and puts me even more into debt.
If I could manage to save up a year of expenses, I could probably start my own consulting agency and start making a lot of money, but I just can’t get there.
Ah the ol’ deserving poor schtick. Classic.
This is really stupid.
You’re basically telling people “just be rich” like it’s that simple.
People living paycheck-to-paycheck are not able to invest money because they don’t have excess income, they get to decide if they want to pay for rent or want to pay for food. Combine that with astonishing inflation rates and salary raises that don’t match cost of living increases or simply layoffs, and we have one fucked up situation.
This is a systemic problem. Billionaires shouldn’t exist. Billionaires are a societal problem.
edit: Oh, I see your comment isn’t directed at people living paycheck-to-paycheck, that’s a bit more reasonable then but I still think you’re missing the mark. It’s not as simple as “just increase your income” like you seem to be thinking it is.
because it is that simple.
be rich or forever be poor.
this is the system we have setup and the system that we worship.
The problem in this thread is that there are people - such as the one mentioned in the title of this article - that are living paycheck-to-paycheck by choice. They choose to spend their entire paycheck on stuff. They don’t need to spend it all, they could save some, but instead they buy the biggest houses they can afford or build a deck they don’t actually need.
There are people who would literally die if they tried to significantly reduce their spending. Those are the people who don’t have a choice, and I sympathize with them and want solutions for this because it’s a serious problem. The others I have somewhat less sympathy for.
The problem is that for many folks the amount they are making isn’t enough for them to live a very reasonable life AND they have nothing to invest in the first place. Suppose a household in a given area needs $100,000 to afford a VERY modest house in that area, health insurance, savings, healthy food etc. Now suppose the house has one disabled breadwinner and one fellow working for $40,000.
Because of this they live in shit town in a tiny apartment a building full of drug addicts in a not so great part of the state wherein the average life expectancy is about 10 years less than one of the good parts of the country.
The first 40k of “excess” would be spent on having a decent life, working a sane number of hours, moving into an actual home. For fully half the country the idea of having excess is laughable. It’s a crass joke.
My SO has a medical condition that limits her income. I’m in academia, so I don’t make much and work crazy hours. We get to have happy day to day, and save money to invest by renting a shity apartment. As in, my investment account is worth more than that of some friends in software development, cus they wanted to live in good apartments.
It doesn’t matter that average life expectancy is 10 years shorter. It matters why. Are people randomly getting murdered or constantly exposed to high air pollution? Don’t live there. Is it shorter cus they are mostly stupid fucks that eat shity food and their only hobby is smoking on the bench below the building? You can live there fine, those are my neighboors. Doesn’t stop me from eating healthy home made food, staying in shape and saving money.
Am I happy about it? No, I will never own a house, and it sucks cus I love to tinker, and enjoy growing plants. But I can live a full filling live, better than any king that ever lived up till around the 18-19 century, and save money.
The economic system is dead, it died in 2008. Combine that with climate change, and things are only going to get worse. Unless some politician is going to pull out free, infinite, energy machine out of their arse they can’t do much as the system is already collapsing.
You can be smart about it, and have a few more happy years before we all die. Or you can be stupid about it, and suffer till we all die.
- am not a USA citizen, the problem is global.
Most areas don’t need $100,000 a year to afford a “very modest house”, you could get a nice mobile home and afford to pay off the loan in just a couple years.
the areas where most people live, however, do.
nobody wants to live in trailer park in Mobile, AL.
Everybody wants everything at no cost. That’s not how the world works, though. If you earn $X a month and want to save some of it as a long-term investment, you simply cannot spend $X a month. You can’t have both.
There are indeed some people who have no choice but to spend $X a month, their basic expenses just can’t go any lower without literally ending up on the street or straight up dying. Those people do have a real problem and I sympathize with them.
People who say “I want to save money but I also want to live in the nicest possible house in the nicest possible neighborhood” I have less sympathy with, because they have a choice. I face that choice myself and instead of griping about how I can’t have everything I want with no sacrifice I just go ahead and make the choice. I don’t spend all my money each month, and as a result I don’t take vacations as nice as I could take and I don’t have as nice a car as I could have. But in exchange for that I’ve got plenty of savings built up.
Why not?
Lets define “most”. Herein I define most as the area immediately surrounding the majority of people. 70% of people live in urban areas not out in bum fuck.
I live in a small city of 50,000 in Washington. A house around here starts at about 400k. I would have to pay about 3100 per month including taxes and insurance. I would take home about 6500 per month after taxes if I made 100k. At current interest rates I would need to spend 3100 per month to service such a loan.or about 47% of my take home pay. It is difficult to see how I could afford a home with a household not individual of less than 100,000.
Adjacent to me is a much bigger city with about 20x the jobs and opportunities. I would need more like 900k to buy into there. Realistically to afford a home there we are talking about my household making more than 200k. Why so much? Because housing has got very expensive and interest is very high.
A ton of urban areas have much options cheaper than the west coast though, mobile homes, townhouses, duplexes, etc. $400,000 is much more than a very modest house. For example I would consider a shotgun house very modest, and short of very high income areas they’re usually much less than $400,000
Cheaper places are cheaper for a reason. Worse health care. Worse education for your kids. Worse life expectancy. Worse Opportunity. For instance St Louis has a median home price of 207k but they also have 10x the murder rate of Seattle a worse jobs outlook. You’ll make less money etc.
Who in their right mind would want to live in a red state?
Cheaper places are cheaper for a reason.
Yes, and I agree I prefer higher density, but ultimately some people living in less desirable areas is more reasonable than trying to build ever taller skyscrapers in city centers- in a country with massive amounts of empty land.
Worse health care.
It depends, there are plenty of cheaper cities with very good healthcare, I grew up in Louisville, KY, spent a lot of time in LA, CA, and now live in Prague, CZ. Louisville has had the cheapest rent/purchase price and had by far the best quality healthcare(at least that I and my family received) out of anywhere I’ve lived.
Worse education for your kids.
This is valid in some cases, and there are plenty of valid reasons to desire living somewhere else more, that doesn’t mean there aren’t costs to that. Furthermore, there are plenty of expensive places with terrible school systems, plenty of cheap places with passable school systems, but more importantly traditional schools systems in general suck. Kids now days have access to the internet, that combined with parents who encourage curiosity and creativity will be much more important to them learning than the school system they go to.
For instance St Louis has a median home price of 207k but they also have 10x the murder rate of Seattle a worse jobs outlook.
That is cherrypicking, compare Chicago to Fargo, ND. Or a less distant example, Seattle to Spokane.
You’ll make less money etc.
Assuming you don’t work remotely, but you’ll also spend less.
Who in their right mind would want to live in a red state?
Not about being red or blue, its about not being a HCOL megalopolis. You can also move to Maine.
Every time ive tried investing, i had to take it out after a few months to pay for something thats popped up in life after other things have raided my savings.
Investing is for people with a lot of excess cash.
Precisely, which is why I don’t think my comment is directed at you. If you’re always trying to get ahead of the latest unexpected big expense, you’re not a “HENRY.”
That’s what living pay check to pay check is though…
Not necessarily. It’s what living paycheck to paycheck is if you’re poor. If you make a lot of money but spend a lot of money on unnecessary things you can also be paycheck to paycheck.
I don’t know your situation, but investing is riskier than a savings account, that currently yeilds a high interest rate.
If you need an emergency fund, make one in a high yield savings account first. My rough number is $10,000. “You’re missing out on the gains” is an incredibly shortsighted view people have in the stock market. “Gains” are made over 20 year periods.
What are those “somethings” that pop up every few months?
Broken phone, hot water heater, HVAC, fridge, washer, dryer, toilet, stove, oven, microwave, tv, personal computer, new shoes, new clothes, friend is getting married, friend is having a baby, the car needs a new set of tires, the car was rear ended, windshield was shattered by a rock that kicked up off the road on my way to work, need a new lawnmower cause the second hand Toro mower’s gas powered engine is shot, property taxes went up because home values went up, kids got sick and went to the doctor, dentist appointment found a cavity, accidentally sat on your glasses, suit doesn’t fit anymore and you have a funeral to attend, older windows on your house built in the 90’s are starting to go bad, storm damage to your out of warranty roof, deck needs to be rebuilt because the old wood is starting to dry rot, time to replace the bed(I know you’re supposed to replace them every 8 years, but you went ahead and stretched 15 out of this one because you’re frugal)…must I continue?
No need to continue. I see a bunch that could have been postponed or omitted.
Like what
Stove, oven, and microwave are redundant; it’s convenient to have all of these but you don’t need all of them. The TV, also, is a luxury item. I don’t know what part of your friend’s wedding you paid for, but that’s not a necessity either. Did the person who rear-ended your car not have insurance? A gasoline lawnmower is excessive, get a push mower. Attend the funeral in less-expensive clothing. Windows starting to go bad haven’t actually gone bad. Deck wood starting to dry rot doesn’t mean it’s nonfunctional, and even if it is a deck is not a necessity; get rid of it instead. Replacing your bed “just because it’s time” is weird, was there actually something wrong with it?
I’m not saying it would be awesome to cut or postpone those expenditures. But you said you had to take your savings out to do these things, and that doesn’t seem true to me. You chose to take your savings out to do those things. If you value those things more than you value having savings, fine, that’s your choice. But “Investing is for people with a lot of excess cash” isn’t true. You could have chosen to have savings instead in exchange for a less expensive lifestyle.
What are you doing to those appliances that’s making the break down so rapidly, anyway? I’ve got a microwave that’s lasted me at least a decade. I’ve never had a TV or toilet “go bad.”
New shoes and new clothes should be part of your budget. You shouldn’t be blinds idea by this.
Everything else, do some reseaech into ‘emergency fund’. You need one before you start investing, else yes you’ll be dipping into your investments the moment you need some extra cash and you might end up loosing money if the market has gone down when you sell.
That’s the point. Financial security is extraordinarily tough to come by so people can’t set aside the money for an emergency fund and invest. It’s not just poor budgeting, everything is getting more expensive for the middle class. Five years ago, my fiancee and I could buy 2 weeks of groceries for $100 at Aldi. Its doubled in that 5 years. Ironically, the most stable consumer good in the last 5 years has been gas and republicans bitch about that too.
Youbare mixing things up.
Groceries have gone up, no one is questioning this, we all feel it.
When questioned about what your emergency, unexpected expenses were, that made you dip into money that you had invested, you listed real emergencies (cavities) and stuff that should be in a budget - new shoes.
Read about personal finance. You have money that you spend as part of your budget bills, shoes, rent etc.
if you manage to have any left, you put them against an emergency fund, typical recommendation is you try to build a nest that allows you to leave for six months.
Then if you still manage to have any left, you start investing.
It looks like you did the wrong way, invested money that you actually needed.
Also, if you are redoing your deck and don’t have an emergency fund, toubare living on the edge. Shit happens like lose your job and break a leg and you don’t have money to pay your mortgage. But at least you have a new deck.
This is basic personal finance, has nothing to do with the price of groceries and you are not poor since you obviously have extra disposable income that you are using wrongly. The other guy isnright BTW you don’t need a new bed ffs, if you have money to throw away start building an emergency fund.
But obviously this is lemny and my logic is in the way of the narrative that the greedy corporations are causing everyone to leave one pay check to another. Hence all the downvotes.
If you don’t save and invest it, you’ll be living paycheck to paycheck for the rest of your life.
I don’t think you really know what “living paycheck to paycheck” actually means if you think it, in any way, involves investing.
You can have very high income and still live paycheck to paycheck if you spend every paycheck
“living paycheck to paycheck” generally means that all money is spent on living expenses and there is very little, if anything, left over. If you have any appreciable discretionary income, you are not living paycheck to paycheck.
Tell that to the people who make 150K and spend 200K a year.
Hint: they dont’ give a shit what you say.
I think his point is people are only living paycheck to paycheck out of choice when they could save and invest if they tightened their belts.
Not saying I agree, just explaining his perspective.
There are peple who are genuinly struggling.
Then there are those who choose to spend 10-20K on vacations every year and ‘feel’ they are struggling.
And these latter people will forever tell you how they are living ‘paycheck to paycheck’ and talk your ear off about how theri struggles are more genuine and ‘real’ than people who are actually poor.
Maybe if they ate less avocado toast right!
In some cases genuinely yes. If you are earning $X and you are spending $X every month, but some of those expenditures are on luxury items like fine foods, then complaining about how you’re living paycheck-to-paycheck and don’t have the “choice” to invest rings hollow. You do have the choice to invest, you’re just choosing to spend that investable money on immediate luxuries instead.
Dude, i pay near $400 a month in just student loan payments. I had to buy a “new” car last year and this 8 year old Subaru cost me $360 a month. I could have bought another $4000 beater, but that’s a hole you never get out of because you are constantly having to replace cars that aren’t worth the scrap they are made of. Everyone has been on a knifes edge for the past 16 years and now everything costs double from them but wages have been the same. No amount of budgeting is gonna fix that.
Didn’t you just say you improved your budget situation by buying a more reliable car?
No, they said that their choice was either an extra expense of $360 a month for the car that they bought, or $4,000 for a cheap beater that’s guaranteed to die on you at some point and be a hole that you perpetually shovel money into if you keep replacing it with more junkers.
That doesn’t mean that they can afford the extra $360 a month. Just that it was the cheaper option.
Just that it was the cheaper option.
Yes, that’s what I was pointing out. He reduced his expenditures.
I suppose he could also go without a car entirely, depending on the circumstances.
He’s still paying $360 a month more than he was before he had to buy a car. His expenditures have increased overall, though not by as much as they possibly could have. But that doesn’t mean that they’ve reduced, unless you’re for some reason considering the cost of the previous car as being more expensive than the new payment in some way.
In fact, if he had bought the $4,000 beater and had to replace it after a year, it actually would’ve been cheaper than the new car - $4,000 over 12 months comes out to $333.33 a month. Of course, that doesn’t include anything like gas or maintenance, but neither does the monthly payment on the other car.
He didn’t specify how frequently he had to replace the beater. Since he was complaining about how it would be more expensive than the car he did bought, logically I would assume it would be more frequent than that (or would require costly repairs more frequently, with the same result).
If he chose the less economically efficient option, that’s even sillier. Why would he do that and then complain about it? This is really the whole point here - budget your money and choose the expenditures that make sense within your budget.
I didn’t say that… my comment isn’t directed at people who are living paycheck to paycheck. It’s directed at people who think they should be rich because they have a high income, yet always seem to have found some unnecessary thing to spend their money on, which prevents them from building wealth.
If you’re always struggling to pay your bills, you need to increase your income. Not saying it’s your fault, just that practically that’s the best thing you can do for yourself in an imperfect system rigged against everyone but the very rich.
“just make more money” lmaooooo
You’re maliciously trying to misrepresent my comment.
On Lemmy financially irresponsible people don’t exist, and when making any statement to the contrary, all they can hear is “blah blah blah avocado toast”.
Except that’s not at all what OP said or was implying. Nice way of pushing the blame on the people affected rather than the broken system we live in.
Most people are struggling with the basics, not disputing that. But, then I wouldn’t consider those people HENRYs.
When I look around, I also see a lot of people with high income making boneheaded moves like buying expensive vehicles, renting luxury apartments, etc. For some people the problem isn’t the system, it’s their own lack of self-control or planning. If you’re making $200,000 and still feel broke. Maybe that $1,500/month car payment was a mistake. Maybe you shouldn’t have used the raise to move into a luxury apartment building.
When I was starting my career all my coworkers lived in $2200/month luxury buildings. I knew we all made roughly the same amount of money, so was shocked that they would pay this much for rent. Meanwhile, I sought out roommates and paid $650. With the money I saved, I paid off my student loan debt aggressively. Now all these people are struggling to get to the next step in life. Yeah, I could’ve seen that coming 10 years ago for you.
I see the same thing with cars. Everyone wants to own some luxury SUV. And, they make fun of me for driving a Prius. I won’t be surprised in another 10 years when they’re still struggling.
This isn’t an attack on people who don’t have the money. This is an attack on people who do and can’t plan well, but then act surprised when they’re broke still.
I gotta back your position here, especially because I think you’re being downvoted unfairly. There is a lot of unfairness in this economy for sure but on this thread that started with HENRY and literally “They have given up on the idea of financial solvency and are going into debt to indulge in luxuries” your comments are totally in line and fair.
Want to add too, that even the first subject in the article ‘Making the most I’ve ever made’ isn’t the best example of a tough economy. She went through a divorce and then bought a house in one of the most competitive housing markets in the US. The high interest rates certainly make that tougher but that’d be hard to afford even before without it.
I don’t make 200k, but together with my wife, we make a little under that. We both have cars, and both are paid off. I still have the first car I ever brought, which is a Nissan Sentra 2006 basic model. So, 17 years on the same car and hers is a 2015 Toyota. We do have 2 kids and brought a house in 2015. The last 4 years have been almost impossible to make ends meet, and all we try to do is survive with the very occasional do something for the kids. I have tons of housework I can’t do but also can’t pay for either. Because of this, we also can’t move until it’s taken care of, so we’re kind of stuck here as well. We have no money to save or invest. Did we make some bad decisions? Sure, probably shouldn’t have had kids for starters. They cost a fortune. But my point is we aren’t doing anything crazy here, it’s just that more and more things are taking our money and prices also went up. It sucks because all I want to do is live and get by, I don’t really have any grandiose dreams of doing crazy things or buying tons of stuff. I just want to get by as my parents did, which seems impossible today.
Even if you do nothing, if you don’t get into debt, you will have millions in equity in the house when it’s paid off.
You’ve basically invested into real estate so you’re saving money even if it doesn’t go into your savings account.
We purchased the house for around 300k, and even with the market today, it’s about 500k. Sure, it could go for higher whenever we do sell, but it’s not an investment. With our current loan we will have paid over 500k over 30 years, so I really am not expecting to make out from this. The only way this makes me money is when I retire (which is close to payoff anyway) and move someplace way cheaper than we’re we live now.
You’re going to pay it off in what, like 25 years? Yeah, it will be worth over a million by then.
My dad bought his house for $600,000 in 2008 peak, and it is now worth maybe 2 million. It hasn’t even been twenty years and it’s more than tripled, despite being underwater on the mortgage in 2009 (owed more than market value)
How much did you pay for your house? Assuming you live in a HCOL area? Making almost 200k you shouldn’t be struggling at all, unless you’re living in some crazy high cost of living area.
I live in North NJ. From my understanding, it’s about as bad as it gets. House was 330k 10 years ago. We also have crazy property taxes, so that alone is 13k a year. I also live in a very rural area which was the only option for the area if we wanted some space and also keep house prices semi cheap.
How damn costly is everything else there, that’s crazy high for property taxes though.
I think there’s a difference between High Earner and High Income that is causing a discrepancy here. Somebody making six figures is a High Earner, but isn’t really a High Income anymore. In 2020, I made about $40k, which was more than about 55-60% of Americans made that year. That puts anybody making $100k or more in the top 25%, at least, of incomes in the country. And yet the prices of things mean that more and more of them are living paycheck to paycheck, regardless of their financial planning.
In a lot of ways, what’s in the market dictates what people can buy more than what they can afford does. I had to buy an SUV the last time I bought a car because I need the 4 wheel drive for the winters here. I had a front wheel drive car once, and couldn’t get it out of my neighborhood when there was more than a half inch of snow on the road. That same SUV today is at least 25% larger than the model I bought, because “that’s what the market wants”, according to Toyota.
When I was first looking for apartments in 2010, studio apartments in my town started at the $1,500 to $1,700 per month range. The lowest rent I could find was a single room in somebody’s house with “occasional kitchen access” for $1,000 a month. And now there are cities where landlords are telling people making $100k that they need to find roommates to afford rent. A 2 bedroom house on a tiny plot of land that’s falling apart just down the street from my parent’s house got bought last week for $1.2 million. 10 years ago that house was probably worth $500k at best. The new owners intend to tear it down and replace it with an Air BnB, taking it off the housing market and further driving up housing prices in town. Builders are making luxury apartments and condos, and single family suburbs, instead of medium density multi-family housing because “that’s what the market wants” and definitely not because that’s what has the highest profit margins. I think there’s been 1 new mixed-use development built in my hometown since I was living there as a kid, but the number of condo developments has increased from 1 to 17 in that same time frame. Every year more kids leave because it’s simply unaffordable to live there. It was even when I was trying to live there, and it’s only gotten worse.
There’s people living above their means, and then there’s people making a six figure salary who just had to replace a car in a market where car prices spiked 30% in the last 3 months of 2023 alone. Personally, I probably wouldn’t even own a car if our country wasn’t built for cars instead of people. They’re priced as a luxury but considered a necessity by the powers that be. Even if you do a lot of the routine maintenance yourself, like me, it’s still prohibitively expensive for the majority of people. Even those we could consider High Earners.
Both can be true. There are many people who barely (or don’t) make enough to survive. There are also many people who spend money frivolously and then complain that they’re broke because of the economy.
OP is like: Even if you have highly-valuable skills, you can’t get ahead, because the game is stacked in favor of renting out your assets instead of delivering valuable labor.
Reply is like: Yeah, but have you considered renting out your assets though?
Come up with a better idea besides complaining.
Gen X here and I can’t afford to contribute to my retirement. Even had to withdraw some during unemployment. I’m either working until I die or hoping assisted suicide becomes legal in 20 years.
Yep. Same. I do pretty good for myself and I’m more fortunate than most, but I had to borrow money from my dad recently for a series of expenses I couldn’t absorb in real time. I got the “you don’t know how to budget” sermon. It felt as fun as you’d expect
I said fuck it and gave him a list of earnings and expenses (I’m pretty frugal) and he was like, “oh…”
Did he clap afterwards?
Oh hey, this is what my partner and I have been experiencing for the last year or so.
assisted suicide
Is that when you die but take a billionaire with you?
On the bright side, 9mm is cheaper than a retirement home. Somebody’s getting a blowjob on my 60th birthday, and it ain’t gonna be me!
Damn, that’s dark. Like my favourite kind of humour.
Assisted suicide vs… illegal suicide? What’s the difference?
Illegal doesn’t pay out insurance claims. Not that I can afford life insurance….
X here too, 53yo, cannot contribute to retirement. At 67 I will have to sell my house because I’ll not be able to afford taxes, insurances, power, repair, etc
Gen Millennial here. I can assist you on your suicide that day for a hot meal so I can at least eat on that day. Maybe someone from Gen Z can assist my suicide if I leave him my blanket then.
A hot meal? If you’re eating the person who just suicided then you could probably stretch those left overs out for at least a week or two.
You might be on to something here…
Sounds like a modest proposal
I might be “rich” when my parents die, depending on how much elder care they need.
I’m actually kind of looking forward to the day I look my kids in the eye and say “I’m going out to look for firewood” and just walk out into the snow and die.
But there won’t be any snow anymore so I’ll just wander off into a slightly chilly night.
I’d rather look forward to the improvements in technology that make elder care less expensive.
As if regular people can afford whatever improvements happen
You didn’t finish reading the end of the single sentence in my comment.
the improvements in technology that make elder care less expensive.
There is a possibility of that being happening but the last half-century of economic trends makes this unlikely, unfortunately. This decade, especially, makes it likely that the gouging will continue and any advances making care less expensive will just see an increase in profits at the top. Every industry seems to have give into overdrive on driving up profits at the populace’s expense, with the exception of basic consumer entertainment electronics but, they are, realistically also driving up effective costs as they are being used to harvest customer data for sale.
If we’re getting out of this, we’re going to have to do it ourselves because none of the established holders of power have shown the slightest inkling of being interested in stopping it.
The last half-century of economic trends supports my expectations, actually. Treatments have been getting cheaper as technology advances. New treatments tend to be expensive, yes. But then as they become older they too get cheaper.
Insulin was discovered over 100 years ago and it took policy, not improvements in manufacturing, to lower the price (which only happened last year).
In America, they don’t get cheaper because it got easier to make.
What if we just financed all our kids advantages on our own credit for them and then promptly died?
What would happen to the debt?
Say I max out my credit card for their down payment on a house and then go “get firewood”.
They definitely try to track large cash gifts when putting down a down payment on a house.
Then the credit card companies crank their interest rates higher and restrict the credit they extend to your kids to compensate. It’s not “free money.”
slightly chilly night.
You’re a glass half full kind of person, aren’t you?
Like Dubya said, you should get 2 or 3 more jobs so you can put more food on your family.
Anecdotal
Yeah welcome to the fuck guy.
A higher quality of living is being gatekept by the wealthy.
Honestly, same boat. Our power bill has gone up over 20% this past year like it’s insane. Our grocery costs have easily doubled in that time, too. Like I’m doing the math and seeing the numbers like I’m making more than I was 3 years ago, but I wasn’t living paycheck to paycheck then, and I’m rationing food today.
I also can’t count the number of times prices have gone up on common groceries in the last year. Every time I go in I’m spending more than I did the previous time. And the grocery stores around here have started phasing out their cost saving brands. More and more lately what used to be the expensive brand is the only one left, and I’m paying twice as much for half as much compared to what I was getting before. They’re not even trying to hide what they’re doing.
I went grocery shopping Saturday. Grapes were $6/pound. It’s getting so we can’t afford produce anymore.
Grapes were $6/pound. It’s getting so we can’t afford produce anymore.
Are we talking regular red/black/green non-organic grapes or some of the more exotic varieties? I track grape prices myself and $2.99/lbs mark for out-of-season-domestic grapes. This is the current price a regular grocery stores right now here with the exception of warehouse clubs which have them at $2.29/lbs. The normal in-season non-warehouse price can be as low as 89c/lbs, but is usually $1.25/lbs.
Is there something special about your geography that makes it more expensive?
Is there really some kind of nation wide grape price standard? Don’t they have to add costs for transportation to places where they do not grow grapes?
I’m in the southern emisphere and just started eating grapes. Assuming you are in the US, consider looking for produce that is in season. Besides helping with your budget, it contributes to addressa number of other issues around shops and producers trying to focus on growing stuff that doesn’t want to grow at a particular time of the year.
I usually try to but here in the Northeast USA almost nothing is in season except mushrooms.
Grapes are in season the exact opposite time of year as we are now.
Imported/greenhouse produce is expensive. Always has been.
Ordinarily I’d totally agree. But they’ve been going up in price constantly for the last 2 years and never come down.
I’m in this same boat. I get letters from the power company all the time about how I’m using more power than anyone around me. The heat in my place has been kept around 62 all winter, occasionally allowed to get colder. It’s a pretty modern build for a house too. I actually used my PC to heat just my bedroom over winter which should be far more power efficient the heating every room. The letters I get try selling me how I need to or could be more efficient like genius ideas like “turn down the thermostat”… its already nearly almost off, just enough to make sure pipes don’t freeze.
Only thing that really changed was they installed a new smart meter last fall, of which I had no say.
My bill also shows I use way more electricity than similar houses. My best guess is they have a heat pump or gas heat/water heater. Whereas I have forced air electric.
I recently installed an emporia energy monitor. It’s basically a kill-a-watt meter that you connect to the circuit breakers for full house monitoring. And while I see some areas that I could improve to cut my bill, no where near enough to get to what the power company is saying similar houses are using. Saving up for a heat pump now as I think that’s the best thing I can do to get my bill down. And as a plus I’d have central AC instead of having to use window units in the heat.
Yes that actually makes sense. Gas is used in most homes, and is considerably cheaper than resistive electric heating. Probably you can get a subsidy for the heat pump.
I’m convinced those statements are wrong in some way. Either not comparing houses of similar size or unoccupied units are skewing the numbers. Or they just tell everyone they’re doing horrible to try and sell energy efficiency stuff.
When I compare using figures from my thermostat via beestat.io my house is in the top 40% (uses less energy than 60% of similar homes in my area).
it’s* already nearly almost off
In Canada those so-called smart meters turned out to be sending incorrect data (or no data at all) AND causing fires.
Best of luck in getting the powers that be to check them tho. :/
Maybe you’re getting incorrectly billed, have you checked the meter readings? Smart meters don’t have a great reputation.
