45% of Six-Figure Earning Americans Live Paycheck-to-Paycheck?

Saw this headline recently. It surprised me.

Why are Americans so awful at saving money? Do so many people fall victim to “keeping up with the Joneses”? Spending above their means, being flashy, trying to show off a fake persona. Willing to bet a good portion of finance workers fall into this trap too…

 

It’s not just an American thing. Go look at other countries - families don’t even have any money to save. Keep in mind the median salary for a household in America is $71k according to census.gov

Yeah lots of people overspend in America, but that seems like a better problem than not even having the money to spend.

 
Arroz con Pollo

Yeah lots of people overspend in America, but that seems like a better problem than not even having the money to spend.

Preach! I feel like I could hear this in a rap song.

The poster formerly known as theAudiophile. Just turned up to 11, like the stereo.
 

American culture in itself is very embedded into consumerism compared to other countries so that is one of the contributing factors.

Another one would be the mandatory use of credit cards (basically mandatory because of your credit score) and I think studies have shown you use more when you use credit vs. debit card.

But tbh like above comments, this isn't just a US problem but more a prevalent one than it seems.

 
Most Helpful

It's not a ton of money...however, most live above their means. It's so important to learn to live within and preferably below your means. Have done well in life, earned a good living, etc., but our comfortable lifestyle is primarily due to having learned to live beneath my means in my 20s while investing for the long term. It just became a habit. So we've had money working for us for 30+ yrs. 

I do think you need to reward yourself from time to time. Otherwise there's no point in earning $X. The "time to time" is the key and actually makes you appreciate things. Personally I'm not a spender. I don't buy things per se. We spend our money on doing things. Taking trips, nice meals, etc. When we need something for the house, we get really good quality stuff that lasts a long time.

I've basically approached spending as, "If I can't just pay for it, write a check, then I don't buy it". Makes me question whether I really want something. Have no problem spending on things that I really care about.

 

These surveys ask something like “if you had an unexpected $500 expense next month, how would you pay for it?” and count anyone saying “credit card” as actually paying on credit and thus “living paycheck to paycheck”. 
 

It is meaningless. 

 

Yes using cards is fine provided you pay it off entirely within the month (no fees) AND you don't purchase things you normally wouldn't if you didn't have the card. That's key. For years, actually until recently (so yes, missed out on the whole points thing but felt better about it), I paid for everything with my debit card so I had a true sense of how much money I actually had available. Recently I moved to purchasing everything with a CC. I pay it bi-weekly so I'm not in shock with the monthly amount. I know sounds stupid, but it helps me reign in spending. Having that attitude has given us the ability to basically do whatever we want. We continue the same methods to keep it that way.

 

If you took out $100k for MBA and chose a profession paying less than $200k post mba that’s your own problem

 

It has something to do with how it gets more and more difficult to feed your family on a global level. Couple that with the 'need' to keep pace with your similarly situated neighbor, and yeah - the façade looks the same but it's far more brittle nowadays. Even if the world is shaken by viruses and wars, most people who are not directly affected still enjoy buying the things they think makes them look stable. New TVs, consoles, cars, phones, gadgets, etc. All (probably) pointless expenditures. 

Inflation due to the war in Ukraine hit some countries harder than others, but the wave does reach even the US, it seems. As everything gets more expensive, precautions can be taken to keep both hands up and escape a downward slope. Things like limiting your supermarket shopping lists and keeping an eye on the gas bills. Also, once Black Friday comes up again, one can look for QR codes and get a discount when buying presents for their nephew's birthday, etc. 

The fact is that the economy won't improve anytime soon, but a few simple changes in our everyday habits can make it a bit more manageable.  

 

Aut qui reprehenderit culpa facilis corporis sed sint. Ipsa sed in quisquam corporis cum ea. Et ut sed id autem sequi id asperiores. Corporis commodi eaque ex dolor ipsum. Facilis cupiditate et quidem quibusdam praesentium. Ratione rerum voluptatem provident rem aperiam.

Aut praesentium quas culpa soluta distinctio. Ipsam dicta sit amet quis odio nisi et. Impedit dolorem repellat quod animi. Atque rerum saepe illo.

Consequatur dolorum accusamus necessitatibus earum. A amet sequi eligendi aut quasi exercitationem vel. Placeat ullam rem vel ipsa et.

Career Advancement Opportunities

May 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. New 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 04 97.1%

Overall Employee Satisfaction

May 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

May 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

May 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (87) $260
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (67) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (146) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Betsy Massar's picture
Betsy Massar
99.0
3
Secyh62's picture
Secyh62
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
dosk17's picture
dosk17
98.9
6
GameTheory's picture
GameTheory
98.9
7
CompBanker's picture
CompBanker
98.9
8
kanon's picture
kanon
98.9
9
Kenny_Powers_CFA's picture
Kenny_Powers_CFA
98.8
10
numi's picture
numi
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”