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…

Comments (13)

1mo
Longjohngold, what's your opinion? Comment below:

100k isn't even that much. 75k (if you're lucky) after tax. Likely 2k+ for rent. 10k for groceries, utilities, etc.

That's already half and you haven't even done anything except just pay for existing

1mo
Arroz con Pollo, what's your opinion? Comment below:

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.

1mo
theAudiophile, what's your opinion? Comment below:
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.

  • Analyst 1 in IB - Gen
1mo

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
1mo
rickle, what's your opinion? Comment below:

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.

1mo
PeterMBA2018, what's your opinion? Comment below:

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. 

Array
1mo
rickle, what's your opinion? Comment below:

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.

24d
PaulTwodoorJones, what's your opinion? Comment below:

Was asking myself something very similar; how levered up is the average, middle class family ?I was in the suburbs and saw relatively younger families (early thirties, kids <4 years ) with brand new SUVs (new Escalade V, tahoes, Q8) think $80k+, and the surrounding homes were easily $500k +.

21d
chacharat, what's your opinion? Comment below:

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.  

19d
sfbroker, what's your opinion? Comment below:

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