Jul 10

Living Paycheck to Paycheck

There was recently an article on CNN Money that a staggering 76% of Americans are living paycheck to paycheck, something that was very disheartening to read. About 16% of Americans are considered to be below the poverty line in America [1], so it’s crazy to think that 76% of people are also living paycheck to paycheck. One would think that this number should be lower?

If we dig into the article a bit more, I think a more accurate way to display the information that is presented in the article is that 27% of Americans have no savings at all. That is what I would qualify as living “paycheck to paycheck” – which still isn’t that great of a rate. But it isn’t as drastic as the headline that lures us into the article and that actually lines up pretty well if you factor in the people living right at the poverty line or slightly above it.

We can also see that 22% of people have less than $100 in savings, while 46% have less than $800 in savings. I think that in this case we are actually dealing with two groups of people. There are the people working hard just to pay their rent, feed their families, and pay the bills. There is no way this person or family is going to be able to save money without increasing their income and there is a legitimate reason they are working paycheck to paycheck.

We then have a second group of people who are making enough to live comfortably but nothing extravagant, but spend every last dollar of their paycheck on stuff they might not really need. They keep up with the latest iPhone, they have an unlimited data plan, and they might get a more expensive car than is really needed on a loan. They probably also have a large amount of credit card debt as a result of living “paycheck to paycheck” and splurging on going out every night or buying expensive furniture and clothes.

And while the second group definitely does exist and is a sizable amount, I don’t think it’s as bad as the article makes it out to be. I think they use the 76% statistic to draw you in right away, and while almost half of the people not having at least a three-month cushion there was another half that at least did have an emergency fund. I think if you wanted to really stretch, you could say that half of all Americans are living paycheck to paycheck and make a valid argument for it.

What do you think of these statistics? Was there a time in your life when you were living paycheck to paycheck? Was it out of need or overspending?

Photo Credits for this post: aeropw

May 24

Putting Your Wallet in Your Back Pocket

You might read this post title and think I’m trying to come up with some clever expression, but that is not the case here. I am literally talking about putting your wallet in your back pocket. This might be slightly off topic from my normal blog topics, but I had to share my new found knowledge with you! And hey, some of your money does have to go into your wallet doesn’t it (probably not as much as we’d like)?

Some of my coworkers and I had a discussion about wallet and key placement in pockets at work a few days ago. Super exciting conversation, right? I had never thought that anybody really did differently than me. It was one of those things where I just assumed that most everyone always put their wallet in their back pocket without even thinking about it.

Sure, when I visited a crowded city or went to a concert I would move my wallet to the front pocket – but this was only a temporary solution. Right after this, the wallet went right back to it’s normal location. But as I found out – ost of the people I talked to during this conversation keep their wallet in their front pocket, and someone actually mentioned that you could have a lot of problems later on in life with your hips, legs, back, etc. from years of sitting on your wallet.

This part of the conversation intrigued me, and I decided to do a little bit of research. I spend most of my day sitting in an office as well as driving in a car, though I don’t always sit directly on my wallet. A lot of the times it is somewhat off to the side, but I’m sure this still makes a difference. I’m not completely level on both sides in that case (especially because my wallet is so fat – I wish!).

The first article that I stumbled upon was this one from the BBC. It doesn’t really give any numbers or statistics, but they do recognize it as being an actual thing and the wallet in the back pocket being the cause. It definitely stresses the back pain part, and I know that my dad deals with that on a daily basis so it’s definitely something I’ve been trying to avoid.

The second article I found was in the NY Times. It once again re-iterated the chronic back and hip pain, and that definitely gets my attention. I also found several discussions on forums and other articles debating whether this is just an old wives tale or not, but it definitely seems to have some validity behind it and the logic makes sense.

Since reading these and talking with my coworkers, I have made an effort to start putting my wallet into my FRONT pocket all of the time. It just seems to make too much sense and if it can prevent problems down the road, it seems like a simple change. It is a bit frustrating for me though, as most people now have smartphones so they put that in one pocket and their wallet in the other. I, on the other hand am still rocking my ‘dumb’ phone so I also carry my iPod around with me for quick googling on WiFi. I also use it for listening to music in my car and the extreme cold in the winter is not good for the battery, and the extreme heat of the inside of a car is not good for electronics in general. So that’s why I keep the iPod in my pocket, forcing me to have slightly crowded pockets with the wallet moving to the front. I think this minor inconvenience is worth avoiding potential pains!

If you keep your wallet in your pocket, where do you keep it? Front or back?

Photo Credits for this post: Pixabay

Apr 30

How to Waste all Your Money on a Giant Banana!

Have you ever wanted to win at a game so bad or just prove somebody wrong that you just kept insisting? I’m sure we’ve all been there before, or even gone so far in an argument to finally realize you are wrong even though you were so confident you were right? The following man may have just taken this to the next extreme, one that I would hope nobody would ever do:

http://abclocal.go.com/wls/story?id=9085164

Yes, you just read that story correctly. He spent over $2600 on a carnival game trying to win an Xbox Kinect which can be bought for around $150 retail. If he wanted it that badly, he should have definitely went out and just bought the thing!

I’m going to go ahead and assume he was right about it being rigged, but that still doesn’t justify this crazy decision. I mean, I’m not sure how the carnival itself could offer such a simple game and an expensive prize and actually hope to make a profit. They are in the same business as a Casino – making more money than they lose. But even after that point, you should file the complaint after spending maybe $20…tops.

I know nothing about this man or his life situation, so I’m not going to make any assumptions – but when your entire life savings is $2600 you probably shouldn’t be deciding to blow $300 on a carnival game even before going back to home to pull your savings out. Hell – you probably shouldn’t be spending $300 on any one purchase with that type of savings unless it is absolutely critical to your job, housing, or life. Though a counter argument would also be that you could end up his situation anyway, with decisions one might see as ‘wise’.

You almost feel bad for the guy, knowing the game was probably rigged but I also just can’t help but laugh when looking at the story and his persistence. As you read through my blog, I hope that we can find such ‘crazy purchases’ that I make (though hopefully not quite this crazy) and maybe you can share some of your own! It’s all in my journey to becoming more frugal and making my way towards financial independence. Let’s also to make a promise to never blow our emergency funds unless it is an actual emergency – I don’t think wanting to prove a carnival game is rigged or winning an Xbox Kinect counts as an emergency.

But hey, it did seem like a pretty sweet Rastafarian banana? Right?

Photo Credits for this post: Pixabay