Paycheck to Paycheck

[Danoff]

Do you live paycheck to paycheck? Do you find yourself saying that you'll go buy (insert item) as soon as payday comes by? Do you borrow money to get through the month, or bounce checks often? How often do you stress about having enough money to make rent at the end of the month?

 

[miata13B]

Originally posted by danoff
Do you live paycheck to paycheck? Do you find yourself saying that you'll go buy (insert item) as soon as payday comes by? Do you borrow money to get through the month, or bounce checks often? How often do you stress about having enough money to make rent at the end of the month?

Not much as of this past year, the past several years I suffered through a ton of bounced checks and paycheck to paycheck living. Lately I find that able to save upwards of $100 + which is truly nice now. . .

 

[Danoff]

I saw a show that mapped walmart's cash intake over the months and it showed spikes on the first and third weekends of the month indicating that people would come out and spend a bunch of cash right when they got paid and then sales would fall off until the next payday.

It astounded me that so many people do that that it can be mapped. I happen to be close to some people that do that and it's pretty scary to watch.

 

[LoudMusic]

Yeah, it's pretty messed up. There can be lots of social and psychological studies done on it. I believe a lot of it has to do with children being spoiled, then growing up and thinking they can still have everything they want.

Doesn't work that way, kids! (:

 

[///M-Spec]

Not anymore. This was one of the hardest of my bad habits to break. When I was a bachelor, I had the worst financial discipline imaginable. Monkey see, monkey buy. Nothing got paid on time. Payday was a spending feast followed by 13 days of famine. I regularly made purchases on the two days of bank "float" for a check to clear. I had a 52" projection TV in my living room and a BMW in the driveway, but I was scraping the change bin at the end of the month for grocery money. It was stupid. But hey, you're only 25 once.

Thankfully, my wife put an end to that nonsense even before we got married. The dot com boom and bust also taught me a thing or two about fiscal responsibility. Those days are long behind me. There's no way you can live like that after you settle down and have kids.


M

 

[Danoff]

There's no way you can live like that after you settle down and have kids.

You'd think so right? You'd especially think that after the kids are all out of the house and it's time to concentrate on retirement that you'd stop living that way right?... not always the case.

 

[///M-Spec]

Originally posted by danoff
You'd think so right? You'd especially think that after the kids are all out of the house and it's time to concentrate on retirement that you'd stop living that way right?... not always the case.

Some people don't really 'come to their senses'. Ever. I know a woman who is declaring bankrupcy for the SECOND time. She is over fifty. It boggles my mind. I mean, when you're young, I can see being irresponsible easily. But 50+???


M

 

[ExigeEvan]

I get 2 pound a week then 10 pound at the beginning of the month. I think my parents are doing well to prepare me for future life (as in looking after you money).

 

[miata13B]

Originally posted by ///M-Spec
Some people don't really 'come to their senses'. Ever. I know a woman who is declaring bankrupcy for the SECOND time. She is over fifty. It boggles my mind. I mean, when you're young, I can see being irresponsible easily. But 50+???


M

My father had to declare Bankrupcy after the age of 50+ because of a business associate, the economy in the late 90's and a second divorce. . . It wasn't that he did not have his shiz together, it was more along the lines of getting screwed over and out that did it. . . Plus it was a construction company and other businesses that jumped on the "Sue Me for building code" from the late 70's and 80's I believe. . .

 

[Duke]

Originally posted by danoff
It astounded me that so many people do that that it can be mapped. I happen to be close to some people that do that and it's pretty scary to watch.

I know a number of people who live that way, or nearly so. When I was in my late 20s and had a 18-month-old child, one woman I worked with was around 30 and was having her second house built around the time we were buying our first house. I came to work after closing on our house, and she said "How does it feel to be broke? Both times I left closings I had less than $100 in the bank." I had to pick my jaw off the floor. I looked her right in the eye and said, "I wouldn't have bought this house unless I could lose my job tomorrow and still make my first three mortgage payments." I couldn't imagine cutting things that close to the bone. We put away 10% off the top (and never miss it since we never see it) and always keep a few month's padding available in case of emergency.

I've also known a person who refinanced his 4-year old Isuzu Rodeo, which was a year from being paid off, for an additional 3 years just so he could pick up about $60 a month by reducing his payment.

Idiocy. I can't imagine putting myself through that kind of stress, let alone my family. Save that 10% off the top - you'll never miss it, and it will pay off HUGELY in later years. Then do your best to live within your means. It's really not much hardship once you get used to it.

 

[Danoff]

Then do your best to live within your means

I try very hard to live beneith my means. I like the saying "you can't spend yourself rich". They key to having money is not spending it.

I'd like to describe how it's possible to live paycheck to paycheck when you have kids.

You figure out about what it costs to run electricity, water, buy food and gas. Then you take what's left and figure out what kind of monthly payments you can afford. The dictates what you can buy. For example, you can buy an expensive house as long as the monthly payments are low enough to fit within you monthly budget. Sure you're losing tens of thousands of dollars in interest on your loan, but you're within your monthly budget.

Then whenever a monthly expense opens up (ex: you finish paying off a car), you simply add a new one. That way at the end of every month you're totally out of cash and you planned it to be that way.

Anything unexpected is for the credit card.


That's just about the most irresponsible way of living I can think of and I'm amazed at how many people think it makes sense.

 

[Duke]

Originally posted by ///M-Spec
Those days are long behind me. There's no way you can live like that after you settle down and have kids.

danoff, were you being excessively literal for a reason? ///M wasn't saying that it's not physically possible. He was saying that it is not justifiable to live that way when there is more than you and perhaps a spouse depending on your income.

On the subject of cars, many people I know trade them in almost as soon as they are paid off. Just when it is becoming cost-effective to own, they get rid of it. One person even told me he didn't want to "get used to" having that extrra money to spend.

 

[///M-Spec]

Originally posted by miata13B
My father had to declare Bankrupcy after the age of 50+ because of a business associate, the economy in the late 90's and a second divorce. . . It wasn't that he did not have his shiz together, it was more along the lines of getting screwed over and out that did it. . . Plus it was a construction company and other businesses that jumped on the "Sue Me for building code" from the late 70's and 80's I believe. . .

A string of business bad luck is certainly different from poor judgement and bad planning. I have an in-law that is in the commerical contracting business --it can be a rocky line of business.

My wife works in divorce law so I also know quite well from her that a divorce can hit people extremely hard financially --especially when a custody battle ensues.

Danoff and I were talking about the irresponsible --people like me 6-8 years ago -who just blow money when they get it.


M

 

[Danoff]

were you being excessively literal for a reason?

Ah... I see how that came off. No I just wanted to illustrate further what I started this thread about. It wasn't about proving that it was possible... just wanted to complain about the mentality.

 

[Duke]

I read and replied while you were editing in the last paragraph.

 

[///M-Spec]

Originally posted by neon_duke
On the subject of cars, many people I know trade them in almost as soon as they are paid off. Just when it is becoming cost-effective to own, they get rid of it.

Hehe. This is a 'problem' I still have, actually. Heck, let's call it a vice. I like to change cars every 3-4 years. No matter how good a car is, eventually, I will get tired of driving it. Its not that I don't appreciate or understand that cars will run great for a long time as long as you take care of them. I just need change. Some people have a 'wanderlust' and need to travel. I have a 'wanderlust' for new, shiny sheetmetal.

I told my wife when we started dating: "Babe, I won't play around behind your back. I don't drink excessively. I don't gamble. But every few years, I need a new car."

BTW, anyone one interested in a 1998 M3 Sedan? 5-speed. 76k. Slightly autocrossed and tracked, but fanatically maintained and in otherwise mint condition? Lots of pics avail. PM me.


M

 

[miata13B]

How much???

Originally posted by ///M-Spec

Danoff and I were talking about the irresponsible --people like me 6-8 years ago -who just blow money when they get it.


M

I used to be like that less then a year ago. . . It took a woman to set me straight and I thank her each day for it.

Originally posted by neon_duke

Always pointing out problems. . . I guess you have to be totally serious at all times and no fun :|

 

[Duke]

Originally posted by miata13B
How much???

Originally posted by ///M-Spec
PM me.

 

[Danoff]

Just when it is becoming cost-effective to own, they get rid of it.

People are really big on buying new cars too, even though it's a lot more cost effective to buy at like 15-25k. At the moment my plans for saving some cash on cars is to buy at 15-25k mi and sell at about 60-80k mi.

 

[Solid Lifters]

Having kids has slowed my wife down, a lot. No only that, but being a one income family for the past two years has really helped. She would spend money like water; and any item she thought looked cute, (clothing mostly) she bought.

However, she is back on a spending spree, of sorts. We finalized a business deal that would net us a large some of money, and already she's looking for a new summer cabin home in Big Bear, and furniture for our current home that I'm to embarrassed to mention the cost of. BTW, Big Bear just had controled burn go out of hands near the area we were looking at.

I told her now was not a good time for a new cabin, when we have the old one to pay off, the house and business costs to take care of, not including setting aside more money for the boys' education. Plus, I would like to buy a boat, instead of renting the crappy ones at the lake.

I haven't spent much in the past three months, when she has spent a great deal. I'm planning to talk to her about it later this afternoon.

When I was younger I lived paycheck-to-paycheck, but I wasn't on a spending spree. I needed guitars and equipment, and that stuff was very pricey. Everybody goes through this in life, unless you start off with a great job, and don't have expensive hobbies or tastes.

But I had friends that saved nothing. As soon as they got a check, it was gone in a week. For example, after getting paid, they would fly out to Vagas, spend most of the paycheck, then borrow money until next paycheck. They did this over, and over again. They were ridiculous with their money. I saved my pay for an item I needed, or wanted, then bought it with cash after shopping for a great price. No credit or credit cards. I was strictly a cash man, and I still am today.

 

[miata13B]

Originally posted by danoff
People are really big on buying new cars too, even though it's a lot more cost effective to buy at like 15-25k. At the moment my plans for saving some cash on cars is to buy at 15-25k mi and sell at about 60-80k mi.

I think this isse with changing cars and getting into a hole with them is the main reason why I will not purchase a new car. There is nothing wrong with finding a car used maybe with some slight flaws but nothing presenting a major problem and purchasing that. . . I find it more cost effective as long as the car is the "right" pick. "right" - meaning mechanically sound. . .

 

[Duke]

Since I've been buying my own cars, I've bought 2 new and 2 used. I would still own both of the new cars if it were not for an accident, since I keep cars running myself until they are D-E-D dead. I bought my Neon used because it was too good a deal to pass up, and I bought the replacement 'van used because for an as-needed-only car that gets less than 5k a year on it there is no point in buying new.

I'm looking around for something for my wife and it will come down to the quality of the deal as to whether I buy new or used. My next car will definitely be used because I want to buy something with some serious sport to it, and that won't be cheap.

If you want a new car every three years, you might as well lease it.

 

[Solid Lifters]

Originally posted by miata13B
I think this isse with changing cars and getting into a hole with them is the main reason why I will not purchase a new car. There is nothing wrong with finding a car used maybe with some slight flaws but nothing presenting a major problem and purchasing that. . . I find it more cost effective as long as the car is the "right" pick. "right" - meaning mechanically sound. . .

We buy a new family car, then sell it after a few years. Currently my wife wants to buy a new SUV, but I had to put my foot down on that idea. Read my previous post why I had to. We have a 2001 that is just over three years old.
I told her we should keep it one more year before buying a new one.

 

[Danoff]

If you want a new car every three years, you might as well lease it.

If you add up the lease costs, they go over what you would pay buying and selling in that amount of time. That's because you probably start the lease at the beginning of the life of the car. Plus you have mileage caps.

The depreciation curve is steep at the beginning of the life of the car, then it starts to level out somewhere between 15 and 25k miles. Then it starts to head down sharp at like 80-90 k miles and flattens out again at like 125 or so.

The curve looks different for each car and it has a shorter life for sports cars, but if you're careful you can own a car during the flat portion of it's depreciation curve and not end up paying very much to own it for some of the best years of its life.

This is my understanding of the situation, I'm not sure how it works in practice because I'm still in the flat portion of the curve on my current car.

 

[vat_man]

We do, sort of, but that's because we deliberately pay the mortgages on the house and rental property, plus our 'saving' money, out first, before we get our hands on it. So, I guess we make it 'artificially' hard, but we do have funds to fall back on. There's a fair bit of fat there, spending-wise, too.

 

[Famine]

Originally posted by ///M-Spec
Payday was a spending feast followed by 13 days of famine.

Take that back! I've never met you!

I'm just spending this month's salary (well, last month's ) now...

 

[High-Test]

Some kids think i'm kind of spoiled, but I work at my dad's office and put most of my pay in the bank, so i'm not really a monkey see-monkey spend type person. (for now) hopefully it stays that way.

 

[///M-Spec]

Originally posted by Famine
Take that back! I've never met you!

Oh, so now those thirteen days didn't mean anything to you anymore? All those late nights, the talking, the laughing, the sharing? Will you deny it all?


M

 

[Pako]

Interesting thread.... I tend to buy things on credit card, then eventually take out bank loans to pay of the credit cards, and repeat as necessary. I play GT series games to try and get my fill of expansive rides, as a result I have a tendency to buy a car/truck cheap and run it until the wheels fall off, then weld the wheels back on and get another 40k miles out of it. If I can drive a vehicle for what I paid for it for under a $100 per month, I feel pretty good. Example: I bought a Buick for $6000 just a little over 6 years ago. All I have done is change tires and standard maintenance on it. It figures out to less than a $1000 per year, under a $100 per month. We own all our vehicles so that helps. With interest rates as low as they are now, we have also managed to consolidate all our debt into our mortgage reducing our over monthly output considerably.

I'm really not that good about saving money, but I'd like to be a lot better. If I had the discipline, I'd love to work in a cash world. Save the money for what you want then buy it, instead of buying it now, and trying to pay it off later.

There's just a lot to think about. If you have kids, you have to consider higher education, and any additional financial support that you can give then...etc. Then you also have to consider retirement programs that take monthly income away, insurance premiums, other insurances....that will all help in the long term goals of not having to work until your 90 years old.

Whew....That's me, my wife on the other hand is compulsive with money....She's an instant gratification type of gal..., so no...she doesn't handle our joint finances, but handles here money as she pleases.

Can we just get back to the bartering system?

 

[emad]

every payday, I'll pull $60 cash from the atm to last me 2 weeks till the next one. In between, this time, I use my debit card only for really big school-related purchases like my my monthly train passes. That $60 usually has to cover food and entertainment...Unfortunately, I've spent waaay too much on my computer since I realised that the thing is just 10 degrees from hitting dangerously high temperatures. I won't be ready/able to afford a new rig for at least another year so I can't take any risks with this one. Until i get a real job, I'll be doing this. My money currently comes out of my parent's business since I do part time work for them. This is also their way of helping me cover school fees.