Current Events > A third of americans making 150k or more a year live check 2 check

(+) Yeah! (+)

Edit: This isn't me being judgemental as I have some these stuff listed as well. It is just an observation.

Wow

Information gathered in a June survey conducted by the personal finance software firm Quicken indicates that 32% of individuals in the United States with annual incomes of at least $150,000 are presently experiencing a situation where they rely on each paycheck to cover their expenses. In comparison, 36% of those earning between $50,000 and $150,000 annually and 55% of households earning less than that income threshold reported being in a similar paycheck-to-paycheck financial position.

I have a few guess on why and the biggest two are inflation and lifestyle creep. Lifestyle creep is that if you make more money. You spend more on higher quality things in life. I always notice, that our bill is different from a few decades ago.

• Casual dining is heavily look down on now a days - Lifestyle Creep (LC from now on)
• We have bills such as the internet and streaming service (new Bills -NB)
• More of us are " health conscious " so we have gym bills and eat healthier and more expensive bills (LC and NB)
• We show off for friends (LC)
• We buy new phones every two or three years (both?)
• We having gaming subscription (bothish?)
• We eat out more in general.
• We are not getting married or there is less marriage. Therefore, not combining income.
• We take more vacations (LC)
• Inflation - but that's not our fault
• Employers drag their feet on paying us right.
• We get tax hard, right in the tax area.
• Corporation, knows how to get money out of our pocket due to psychological tactic and social media data
• Social Media hyperinflate the luxurious lifestyle. Thus influencing poor Ole us more.

Source: https://tinyurl.com/ync9s75b

omniryu posted...

Source: will be back soon

Lol

MarcoRubio posted...

Lol

Lol I fixed it. The Url was too long.

Nothing to see here, the system is working as designed.

omniryu posted...

Inflation - but that's not our fault
Employers drag their feet on paying us right.
We get tax hard, right in the tax area.

These are the big ones. People shouldn't be punished for enjoying the finer things in life that their hard-earned money affords them to.

Sry4PartyRockin posted...

Nothing to see here, the system is working as designed.

But we can be rebels. Please

"Stop buying coffee and blenders and toasters" - Some idiot

Solar_Crimson posted...

These are the big ones. People shouldn't be punished for enjoying the finer things in life that their hard-earned money affords them to.

Oh, I didn't want it sound like there is a penalty of success. It just an observation of how things are different from the past as what we considered bills and lifestyle creep is just the name of the transition you make in your life when you make more money.

Is it lifestyle creep, or is it inflation catching up to our lifestyle

TheGoldenEel posted...

Is it lifestyle creep, or is it inflation catching up to our lifestyle

A bit of both.

Yikes. People are bad with money. I spend more than I'd like to bc I'm easily persuaded by colleagues to go out to lunch and I'll occasionally get a boba or a $6 coffee.

But I'm not paycheck to paycheck. Still squirrel some away into savings, some into investments. Oh well.

Everyone is in a unique and different situation.

they are living beyond their means

very simple

lilORANG posted...

Yikes. People are bad with money. I spend more than I'd like to bc I'm easily persuaded by colleagues to go out to lunch and I'll occasionally get a boba or a $6 coffee.

But I'm not paycheck to paycheck. Still squirrel some away into savings, some into investments. Oh well.

I do think it is important to cut back and save. From what I understand, retirement is a bitch.

And I am not saying we should be punished for buying what we want but on an individual level, you have control over your finance and not inflation.......

Unless we all want to protest and cause anarchy?.... please

I don't think those people know what living "paycheck to paycheck" means

A big reason I could see is if they have kids. Raising kids isn't cheap and some people do choose to live in a high cost of living area so that their kids will be in a good school district.

People making $150k a year aren't simply struggling to get by due to inflation. Otherwise then it would be logically impossible for someone making $50k to even stay alive, but such people exist, with children too. The phenomenon of 6 figure income workers "just getting by" was around before COVID.

Someone with $150k is "living pay check to pay check" because they choose to spend their entire pay check. We're talking stuff like child services and more expensive housing and/or nicer cars. Long term expensive commitments that one cannot easily scale down from (as opposed to reducing your meal budget by cutting Doordash for example).

emblem-man posted...

I don't think those people know what living "paycheck to paycheck" means

This. I make a combined 50K a year and while we are dirt ass poor, we don't live paycheck to paycheck. These people seriously don't understand the meaning of the word and usually elect to live in stupidly expensive places or fundamentally don't understand the difference between something like the kind of cars I drive and the kind of cars they drive or the kind of health insurance we need

WingsOfGood posted...

they are living beyond their means

very simple

Yeah.

Now it's true that a lot of it is due to societal pressure pushing them to spend beyond their means, which is bad. But unless they got stuck with a really bad mortgage / property tax situation or something, almost all of them could probably be able to save some money for retirement if they changed their spending habits.

Had no problem growing savings a couple years ago, now doing the same stuff eats more and more of the barely larger paycheck.

action52 posted...

Yeah.

Now it's true that a lot of it is due to societal pressure pushing them to spend beyond their means, which is bad. But unless they got stuck with a really bad mortgage / property tax situation or something, almost all of them could probably be able to save some money for retirement if they changed their spending habits.

likely multiple brand new luxury cars that are bought on credit

I think this is the most common offender, even more than housing

but also these types tend to sell their house and upgrade to an even more expensive one so while they could have stayed in the old house a bit longer and maybe paid it off they keep increasing their debt

We make a combined 100k, we go out to eat a lot, basically buy whatever we want usually whenever we want, have 2 kids, our mortgage keeps going up every year, and we don't live paycheck to paycheck.

So I can't imagine what kinda spending a person making 150k a year does to live paycheck to paycheck, but I imagine it is outside of their means.

How on earth can people making THAT much be living paycheck to paycheck? Thats almost insane to me. I make like $38K a year (you can keep your insults to yourself, I beat myself up a lot for this already) and Im living comfortably. Always make rent, utilities, car payment, etc. and put money into retirement.

150K in New York

https://gamefaqs.gamespot.com/a/user_image/9/0/0/AATsAmAAE3_M.jpg

rexcrk posted...

How on earth can people making THAT much be living paycheck to paycheck? Thats almost insane to me. I make like $38K a year (you can keep your insults to yourself, I beat myself up a lot for this already) and Im living comfortably. Always make rent, utilities, car payment, etc. and put money into retirement.

Cost of living is really high in places like LA and Manhattan. It's nuts.

rexcrk posted...

How on earth can people making THAT much be living paycheck to paycheck? Thats almost insane to me. I make like $38K a year (you can keep your insults to yourself, I beat myself up a lot for this already) and Im living comfortably. Always make rent, utilities, car payment, etc. and put money into retirement.

Don't feel bad for yourself. If you are comfortable, that's all that matter.

TheGoldenEel posted...

Is it lifestyle creep, or is it inflation catching up to our lifestyle

Depends on people and circumstances.

For some it is most definitely lifestyle creep andor inflation catching up to their lifestyles. Most Americans don't even make half that and live paycheck to paycheck too.

So if you don't have major bills out of your control like legit medical expenses bogging you down, or natural disaster that sent you and your family into ruin, I'm not feeling sorry for someone making 150k/year living paycheck to paycheck. That's more to do with your lifestyle making you paycheck to paycheck.

rexcrk posted...

How on earth can people making THAT much be living paycheck to paycheck? Thats almost insane to me. I make like $38K a year (you can keep your insults to yourself, I beat myself up a lot for this already) and Im living comfortably. Always make rent, utilities, car payment, etc. and put money into retirement.

I don't know what you do but I would almost guarantee I would prefer that your job to exist more than CEOs.

rexcrk posted...

How on earth can people making THAT much be living paycheck to paycheck? Thats almost insane to me. I make like $38K a year (you can keep your insults to yourself, I beat myself up a lot for this already) and Im living comfortably. Always make rent, utilities, car payment, etc. and put money into retirement.

ever heard the idea that chicks dig fancy cars?

that is the type of person this thread refers to

then they have a kid who turns 16, what kind of car do they buy them?

like I know people who drive BMW who definitely cannot afford one

Doe posted...

People making $150k a year aren't simply struggling to get by due to inflation. Otherwise then it would be logically impossible for someone making $50k to even stay alive, but such people exist, with children too. The phenomenon of 6 figure income workers "just getting by" was around before COVID.

Someone with $150k is "living pay check to pay check" because they choose to spend their entire pay check. We're talking stuff like child services and more expensive housing and/or nicer cars. Long term expensive commitments that one cannot easily scale down from (as opposed to reducing your meal budget by cutting Doordash for example).

Agree, it's a mix of lifestyle creep and, really, cost of living for a particular area.

I'm in a situation wherein I am a single father with a mortgage, car payment, cover child care for two kids, and still put a decent little bit into my 401k while having fallback money. I work solid overtime to support this but none of the aforementioned expenses are ungodly either - I've yet to hit $90k in a year and I would be up shit creek if I lived in a high cost of living area.

WingsOfGood posted...

likely multiple brand new luxury cars that are bought on credit

I think this is the most common offender, even more than housing

Yeah but they could probably sell those cars and switch to more affordable ones pretty easily. Whereas it might not be possible to sell their house for enough to pay back the debt, let alone cover the down payment on a new one. And even if the market value of their house is high, it could take years to find a buyer.

So people who made a mistake buying their housing are the ones who really might be stuck in a financial situation they can't escape, is what I'm saying.

action52 posted...

Yeah but they could probably sell those cars and switch to more affordable ones pretty easily. Whereas it might not be possible to sell their house for enough to pay back the debt, let alone cover the down payment on a new one. And even if the market value of their house is high, it could take years to find a buyer.

So people who made a mistake buying their housing are the ones who really might be stuck in a financial situation they can't escape, is what I'm saying.

sure, but they don't want to or they wouldn't be in the situation

Realistically if youre making over $100k a year you should be able to splurge and still live comfortably. The issue is probably their $800k house.

whats embarrassing is that this is common in San francisco

$150k a year and I'd be able to save like 2/3s of that and still have a sizeable life upgrade.

I manage on $35000, having that much more than what I make now would be wild.

That's insane...has to be housing,family costs mainly I would guess. I'm currently at around $3,600/yr in monthly bills lol.

modena posted...

That's insane...has to be housing,family costs mainly I would guess. I'm currently at around $3,600/yr in monthly bills lol.

Do you drive?

omniryu posted...

Do you drive?

Yep, on a typical work day about 12miles total.

At some point people will realize that the condition "paycheck-to-paycheck" is meaningless and has very little connection to financial struggle.

Keeping up with the Jones is what's keeping my in-laws in endless debt.

modena posted...

Yep, on a typical work day about 12miles total.

So I am guessing you have cheap car insurance.

People just refuse to live below their means.

Nothing wrong with being a millionaire and still living in a middle class house.

emblem-man posted...

I don't think those people know what living "paycheck to paycheck" means

Mhm

omniryu posted...

150K in New York

https://gamefaqs.gamespot.com/a/user_image/9/0/0/AATsAmAAE3_M.jpg

That calculator does not seem to take into account tax deductions (not even the standard deduction). Your effective tax rate should not be close to your marginal tax rate.

In many cases, 150K is the minimum you can make to consider owning a stand-alone home realistically. For example where I live, a 1200 sq. foot house (what used to be considered a "starter" home") start at roughly $580,000.

So with that, a mortgage of around $2,800 / mo, then tack on another $300 / mo for homeowners insurance, and there's a big chunk of money gone. Add to that, yearly property taxes (roughly $5,000 per year here), break that down into another $400 per month to budget. That $42k of take-home pay gone right away.

Just owning that home, assuming nothing goes wrong (which it does) eats up $3,500 / mo - or about 1 two week paycheck, if you account for a 401k or other voluntary deductions.

Now, of course, you could live somewhere like West Virginia or Alabama where home prices are incredibly low but... then you're living in West Virginia or Alabama, states with a lot of shortcomings in education, health services, and so on. If you want good schools, access to health care (i.e., non-red states), good police and civic services, you'll likely have to move into a more expensive area.

So I can very realistically see $150k being a paycheck-to-paycheck existence. As someone else already said, the system is working exactly how it's designed. It's keeping most of the wealth out of the middle class, even those who look to be high earners on paper.

tankboy posted...

That calculator does not seem to take into account tax deductions (not even the standard deduction). Your effective tax rate should not be close to your marginal tax rate.

Oh, I see. I did know this wasn't 100% accurate but I wanted to see where was the ballpark guess was.

It's a psychological effect of debt. You know how much you can get by on with your current lifestyle, so you become accustomed to it. Even if you make more money, you spend more money because you can afford it. Not surprised by this at all.

El_Marsh posted...

Mhm

What if paycheck to paycheck means that if they lose their job right now, it means they can't pay their next month mortgage or rent?

Most people making that much money also live in very high cost of living areas so its not entirely shocking. Lets say for simplicitys sake that you net 100k after taxes. Which is close to $8300 take home.

If you have a kid, daycare alone can be $2-3k a month. Some have multiple kids in daycare. Rent can be another $2-3k or more. There goes most of your money already. Now add in the fact that most have degrees in order to be making the kind of money they are and likely also have student loans. Add in car, insurance, electricity, gas, phone, food and its very easy to live paycheck to paycheck. Yeah making more money means youll probably opt for more comforts. You will want to live in a safer neighborhood which will cost more rent or mortgage. But not always some huge house that is over their means. A one bedroom apartment in an ok neighborhood is like $2500 a month around where I live. Many people making that much money have families to support and need more than a one bedroom apartment though. And they also need neighborhoods with better schools. Theyre not all being financially irresponsible like people here are making it out to be. Shit is just really expensive in some areas, especially if you have a family.