40-year-old homeowner says economy doesn’t add up: ‘I’m making the most money I’ve ever made, and I’m still living paycheck to paycheck’
40-year-old homeowner says economy doesn’t add up: ‘I’m making the most money I’ve ever made, and I’m still living paycheck to paycheck’
'I’m making the most money I've ever made, and I’m still living paycheck to paycheck'
“There's this wild disconnect between what people are experiencing and what economists are experiencing,” says Nikki Cimino, a recruiter in Denver.
You're viewing a single thread.
There's a term for this, HENRY. High Earner, Not Rich Yet. The lie is the "Yet". Millennials and Gen Xers have been struggling to reach the middle class that is kept perpetually out of reach. They have given up on the idea of financial solvency and are going into debt to indulge in luxuries like having children, going on vacations, and living somewhere that isn't a complete shithole. Saving for retirement is as realistic as training to live on Mars, so why bother? Keep digging a financial hole and then lie down and die in it.
Gen X here and I can’t afford to contribute to my retirement. Even had to withdraw some during unemployment. I’m either working until I die or hoping assisted suicide becomes legal in 20 years.
Yep. Same. I do pretty good for myself and I'm more fortunate than most, but I had to borrow money from my dad recently for a series of expenses I couldn't absorb in real time. I got the "you don't know how to budget" sermon. It felt as fun as you'd expect
I said fuck it and gave him a list of earnings and expenses (I'm pretty frugal) and he was like, "oh..."
Did he clap afterwards?
Oh hey, this is what my partner and I have been experiencing for the last year or so.
Gen Millennial here. I can assist you on your suicide that day for a hot meal so I can at least eat on that day. Maybe someone from Gen Z can assist my suicide if I leave him my blanket then.
A hot meal? If you're eating the person who just suicided then you could probably stretch those left overs out for at least a week or two.
You might be on to something here....
assisted suicide
Is that when you die but take a billionaire with you?
On the bright side, 9mm is cheaper than a retirement home. Somebody's getting a blowjob on my 60th birthday, and it ain't gonna be me!
Damn, that's dark. Like my favourite kind of humour.
X here too, 53yo, cannot contribute to retirement. At 67 I will have to sell my house because I'll not be able to afford taxes, insurances, power, repair, etc
Assisted suicide vs... illegal suicide? What's the difference?
Illegal doesn’t pay out insurance claims. Not that I can afford life insurance….
I might be "rich" when my parents die, depending on how much elder care they need.
I'm actually kind of looking forward to the day I look my kids in the eye and say "I'm going out to look for firewood" and just walk out into the snow and die.
But there won't be any snow anymore so I'll just wander off into a slightly chilly night.
slightly chilly night.
You're a glass half full kind of person, aren't you?
What if we just financed all our kids advantages on our own credit for them and then promptly died?
What would happen to the debt?
Say I max out my credit card for their down payment on a house and then go "get firewood".
They definitely try to track large cash gifts when putting down a down payment on a house.
So I buy a bunch of gold and leave a map and then bury it in the woods and when I "get firewood."
Then the credit card companies crank their interest rates higher and restrict the credit they extend to your kids to compensate. It's not "free money."
You should watch the movie The Road if you haven't already.
I'd rather look forward to the improvements in technology that make elder care less expensive.
As if regular people can afford whatever improvements happen
You didn't finish reading the end of the single sentence in my comment.
the improvements in technology that make elder care less expensive.
There is a possibility of that being happening but the last half-century of economic trends makes this unlikely, unfortunately. This decade, especially, makes it likely that the gouging will continue and any advances making care less expensive will just see an increase in profits at the top. Every industry seems to have give into overdrive on driving up profits at the populace's expense, with the exception of basic consumer entertainment electronics but, they are, realistically also driving up effective costs as they are being used to harvest customer data for sale.
If we're getting out of this, we're going to have to do it ourselves because none of the established holders of power have shown the slightest inkling of being interested in stopping it.
The last half-century of economic trends supports my expectations, actually. Treatments have been getting cheaper as technology advances. New treatments tend to be expensive, yes. But then as they become older they too get cheaper.
Insulin was discovered over 100 years ago and it took policy, not improvements in manufacturing, to lower the price (which only happened last year).
In America, they don't get cheaper because it got easier to make.
That's not true. Originally insulin had to be isolated from animal pancreases, a costly procedure. The first handful of humans to be treated with it were literally the children of wealthy politicians, a congressman and the secretary of state. They were the only ones who could get access to it. It's now produced in industrial quantities using recombinant bacteria to synthesize it. It's routine.
I'm speaking about large-scale trends here. Obviously the prices of things have their localized ups and downs when you look at them on the scale of a few years. But I'm not expecting to need elder care for quite a few decades yet.
Here's the first picture I found on Google for the search "insulin prices worldwide"
Yes, again, I'm talking about large-scale trends, not the current spot prices. I don't live in the United States anyway, most people don't. Note how cheap it is everywhere else?
What most people don’t realize is that once you have excess income, you have options. What you do with the excess is what matters. If you don’t save and invest it, you’ll be living paycheck to paycheck for the rest of your life.
A lot of folks think being rich means just spending money on whatever you want. That’s not really the case. If you spend the excess on fancy cars or luxury items that make others think you’re rich, the irony is you’ll be working for a long time and never actually become financially independent.
Edit: well, if I’ve learned anything from this comment, it’s that everyone on Lemmy identifies as a HENRY with bad spending habits no matter how much money they make. Or, at least a temporarily embarrassed one.
Except that's not at all what OP said or was implying. Nice way of pushing the blame on the people affected rather than the broken system we live in.
Most people are struggling with the basics, not disputing that. But, then I wouldn’t consider those people HENRYs.
When I look around, I also see a lot of people with high income making boneheaded moves like buying expensive vehicles, renting luxury apartments, etc. For some people the problem isn’t the system, it’s their own lack of self-control or planning. If you’re making $200,000 and still feel broke. Maybe that $1,500/month car payment was a mistake. Maybe you shouldn’t have used the raise to move into a luxury apartment building.
When I was starting my career all my coworkers lived in $2200/month luxury buildings. I knew we all made roughly the same amount of money, so was shocked that they would pay this much for rent. Meanwhile, I sought out roommates and paid $650. With the money I saved, I paid off my student loan debt aggressively. Now all these people are struggling to get to the next step in life. Yeah, I could’ve seen that coming 10 years ago for you.
I see the same thing with cars. Everyone wants to own some luxury SUV. And, they make fun of me for driving a Prius. I won’t be surprised in another 10 years when they’re still struggling.
This isn’t an attack on people who don’t have the money. This is an attack on people who do and can’t plan well, but then act surprised when they’re broke still.
I don't make 200k, but together with my wife, we make a little under that. We both have cars, and both are paid off. I still have the first car I ever brought, which is a Nissan Sentra 2006 basic model. So, 17 years on the same car and hers is a 2015 Toyota. We do have 2 kids and brought a house in 2015. The last 4 years have been almost impossible to make ends meet, and all we try to do is survive with the very occasional do something for the kids. I have tons of housework I can't do but also can't pay for either. Because of this, we also can't move until it's taken care of, so we're kind of stuck here as well. We have no money to save or invest. Did we make some bad decisions? Sure, probably shouldn't have had kids for starters. They cost a fortune. But my point is we aren't doing anything crazy here, it's just that more and more things are taking our money and prices also went up. It sucks because all I want to do is live and get by, I don't really have any grandiose dreams of doing crazy things or buying tons of stuff. I just want to get by as my parents did, which seems impossible today.
How much did you pay for your house? Assuming you live in a HCOL area? Making almost 200k you shouldn't be struggling at all, unless you're living in some crazy high cost of living area.
I live in North NJ. From my understanding, it's about as bad as it gets. House was 330k 10 years ago. We also have crazy property taxes, so that alone is 13k a year. I also live in a very rural area which was the only option for the area if we wanted some space and also keep house prices semi cheap.
How damn costly is everything else there, that's crazy high for property taxes though.
Even if you do nothing, if you don't get into debt, you will have millions in equity in the house when it's paid off.
You've basically invested into real estate so you're saving money even if it doesn't go into your savings account.
We purchased the house for around 300k, and even with the market today, it's about 500k. Sure, it could go for higher whenever we do sell, but it's not an investment. With our current loan we will have paid over 500k over 30 years, so I really am not expecting to make out from this. The only way this makes me money is when I retire (which is close to payoff anyway) and move someplace way cheaper than we're we live now.
You're going to pay it off in what, like 25 years? Yeah, it will be worth over a million by then.
My dad bought his house for $600,000 in 2008 peak, and it is now worth maybe 2 million. It hasn't even been twenty years and it's more than tripled, despite being underwater on the mortgage in 2009 (owed more than market value)
Past performance is no guarantee of future results.
So? Someone spending $300,000 on loan shouldn't complain about not having money. Maybe manage finances better?
Like half the country should be so lucky to own their home
I gotta back your position here, especially because I think you're being downvoted unfairly. There is a lot of unfairness in this economy for sure but on this thread that started with HENRY and literally "They have given up on the idea of financial solvency and are going into debt to indulge in luxuries" your comments are totally in line and fair.
Want to add too, that even the first subject in the article 'Making the most I've ever made' isn't the best example of a tough economy. She went through a divorce and then bought a house in one of the most competitive housing markets in the US. The high interest rates certainly make that tougher but that'd be hard to afford even before without it.
I think there's a difference between High Earner and High Income that is causing a discrepancy here. Somebody making six figures is a High Earner, but isn't really a High Income anymore. In 2020, I made about $40k, which was more than about 55-60% of Americans made that year. That puts anybody making $100k or more in the top 25%, at least, of incomes in the country. And yet the prices of things mean that more and more of them are living paycheck to paycheck, regardless of their financial planning.
In a lot of ways, what's in the market dictates what people can buy more than what they can afford does. I had to buy an SUV the last time I bought a car because I need the 4 wheel drive for the winters here. I had a front wheel drive car once, and couldn't get it out of my neighborhood when there was more than a half inch of snow on the road. That same SUV today is at least 25% larger than the model I bought, because "that's what the market wants", according to Toyota.
When I was first looking for apartments in 2010, studio apartments in my town started at the $1,500 to $1,700 per month range. The lowest rent I could find was a single room in somebody's house with "occasional kitchen access" for $1,000 a month. And now there are cities where landlords are telling people making $100k that they need to find roommates to afford rent. A 2 bedroom house on a tiny plot of land that's falling apart just down the street from my parent's house got bought last week for $1.2 million. 10 years ago that house was probably worth $500k at best. The new owners intend to tear it down and replace it with an Air BnB, taking it off the housing market and further driving up housing prices in town. Builders are making luxury apartments and condos, and single family suburbs, instead of medium density multi-family housing because "that's what the market wants" and definitely not because that's what has the highest profit margins. I think there's been 1 new mixed-use development built in my hometown since I was living there as a kid, but the number of condo developments has increased from 1 to 17 in that same time frame. Every year more kids leave because it's simply unaffordable to live there. It was even when I was trying to live there, and it's only gotten worse.
There's people living above their means, and then there's people making a six figure salary who just had to replace a car in a market where car prices spiked 30% in the last 3 months of 2023 alone. Personally, I probably wouldn't even own a car if our country wasn't built for cars instead of people. They're priced as a luxury but considered a necessity by the powers that be. Even if you do a lot of the routine maintenance yourself, like me, it's still prohibitively expensive for the majority of people. Even those we could consider High Earners.
Both can be true. There are many people who barely (or don't) make enough to survive. There are also many people who spend money frivolously and then complain that they're broke because of the economy.
Dude, i pay near $400 a month in just student loan payments. I had to buy a "new" car last year and this 8 year old Subaru cost me $360 a month. I could have bought another $4000 beater, but that's a hole you never get out of because you are constantly having to replace cars that aren't worth the scrap they are made of. Everyone has been on a knifes edge for the past 16 years and now everything costs double from them but wages have been the same. No amount of budgeting is gonna fix that.
I didn’t say that… my comment isn’t directed at people who are living paycheck to paycheck. It’s directed at people who think they should be rich because they have a high income, yet always seem to have found some unnecessary thing to spend their money on, which prevents them from building wealth.
If you’re always struggling to pay your bills, you need to increase your income. Not saying it’s your fault, just that practically that’s the best thing you can do for yourself in an imperfect system rigged against everyone but the very rich.
If you’re always struggling to pay your bills, you need to increase your income.
"just make more money" lmaooooo
You’re maliciously trying to misrepresent my comment.
On Lemmy financially irresponsible people don't exist, and when making any statement to the contrary, all they can hear is "blah blah blah avocado toast".
Didn't you just say you improved your budget situation by buying a more reliable car?
No, they said that their choice was either an extra expense of $360 a month for the car that they bought, or $4,000 for a cheap beater that's guaranteed to die on you at some point and be a hole that you perpetually shovel money into if you keep replacing it with more junkers.
That doesn't mean that they can afford the extra $360 a month. Just that it was the cheaper option.
Just that it was the cheaper option.
Yes, that's what I was pointing out. He reduced his expenditures.
I suppose he could also go without a car entirely, depending on the circumstances.
He's still paying $360 a month more than he was before he had to buy a car. His expenditures have increased overall, though not by as much as they possibly could have. But that doesn't mean that they've reduced, unless you're for some reason considering the cost of the previous car as being more expensive than the new payment in some way.
In fact, if he had bought the $4,000 beater and had to replace it after a year, it actually would've been cheaper than the new car - $4,000 over 12 months comes out to $333.33 a month. Of course, that doesn't include anything like gas or maintenance, but neither does the monthly payment on the other car.
He didn't specify how frequently he had to replace the beater. Since he was complaining about how it would be more expensive than the car he did bought, logically I would assume it would be more frequent than that (or would require costly repairs more frequently, with the same result).
If he chose the less economically efficient option, that's even sillier. Why would he do that and then complain about it? This is really the whole point here - budget your money and choose the expenditures that make sense within your budget.
That's irrelevant to the point I was making. I merely gave that as an example of how the beater could theoretically be cheaper than the car payments if it lasted that long without needing additional expenses. It could've been the cheaper option, but that would be gambling that it wouldn't require additional work and still be running for a full 12 months.
My point is quite simple: He paid $400 a month in student loans. Now, he pays $760 a month due to having to buy a new car. That's not reducing his expenditures, it's increasing it. He didn't go from paying $400 to $360. The $360 is an additional unplanned expense he has to pay now on top of his other monthly expenses because he had to replace his car.
But previously he was paying $4000-per-however-long-his-beaters-last. That was a planned expenditure too.
Whether this is an improvement or not is impossible to say without knowing how long his beaters lasted, that would be on him to figure out. Since he made the decision to switch to the non-beater I assumed he'd worked it out, but evidently that's a bad assumption so who knows.
That hinges on the assumption that the car he's replacing is a beater, which isn't necessarily true. All he said is that he could've bought another beater, which says that he had bought one before, but the car he's replacing could've been a non-beater that he had bought because he had already learned how pricey constantly replacing beaters is. And by the sounds of it, having to replace the car was an unplanned expense, which says to me that he wasn't driving a beater.
Every time ive tried investing, i had to take it out after a few months to pay for something thats popped up in life after other things have raided my savings.
Investing is for people with a lot of excess cash.
Precisely, which is why I don’t think my comment is directed at you. If you’re always trying to get ahead of the latest unexpected big expense, you’re not a “HENRY.”
That's what living pay check to pay check is though...
What are those "somethings" that pop up every few months?
I don't know your situation, but investing is riskier than a savings account, that currently yeilds a high interest rate.
If you need an emergency fund, make one in a high yield savings account first. My rough number is $10,000. "You're missing out on the gains" is an incredibly shortsighted view people have in the stock market. "Gains" are made over 20 year periods.
If you don’t save and invest it, you’ll be living paycheck to paycheck for the rest of your life.
I don't think you really know what "living paycheck to paycheck" actually means if you think it, in any way, involves investing.
You can have very high income and still live paycheck to paycheck if you spend every paycheck
"living paycheck to paycheck" generally means that all money is spent on living expenses and there is very little, if anything, left over. If you have any appreciable discretionary income, you are not living paycheck to paycheck.
Tell that to the people who make 150K and spend 200K a year.
Hint: they dont' give a shit what you say.
I'm not concerned about what those people say; they are doing just fine. I'm concerned about the people who are actually living paycheck to paycheck.
This is really stupid.
You're basically telling people "just be rich" like it's that simple.
People living paycheck-to-paycheck are not able to invest money because they don't have excess income, they get to decide if they want to pay for rent or want to pay for food. Combine that with astonishing inflation rates and salary raises that don't match cost of living increases or simply layoffs, and we have one fucked up situation.
This is a systemic problem. Billionaires shouldn't exist. Billionaires are a societal problem.
edit: Oh, I see your comment isn't directed at people living paycheck-to-paycheck, that's a bit more reasonable then but I still think you're missing the mark. It's not as simple as "just increase your income" like you seem to be thinking it is.
because it is that simple.
be rich or forever be poor.
this is the system we have setup and the system that we worship.
The problem in this thread is that there are people - such as the one mentioned in the title of this article - that are living paycheck-to-paycheck by choice. They choose to spend their entire paycheck on stuff. They don't need to spend it all, they could save some, but instead they buy the biggest houses they can afford or build a deck they don't actually need.
There are people who would literally die if they tried to significantly reduce their spending. Those are the people who don't have a choice, and I sympathize with them and want solutions for this because it's a serious problem. The others I have somewhat less sympathy for.
I try to save whatever extra I have, because everyone says I need to have six months of expenses saved.
The problem is that before I can save up enough to cover that there's some huge expense that I need to cover that empties it out and puts me even more into debt.
If I could manage to save up a year of expenses, I could probably start my own consulting agency and start making a lot of money, but I just can't get there.
The problem is that for many folks the amount they are making isn't enough for them to live a very reasonable life AND they have nothing to invest in the first place. Suppose a household in a given area needs $100,000 to afford a VERY modest house in that area, health insurance, savings, healthy food etc. Now suppose the house has one disabled breadwinner and one fellow working for $40,000.
Because of this they live in shit town in a tiny apartment a building full of drug addicts in a not so great part of the state wherein the average life expectancy is about 10 years less than one of the good parts of the country.
The first 40k of "excess" would be spent on having a decent life, working a sane number of hours, moving into an actual home. For fully half the country the idea of having excess is laughable. It's a crass joke.
My SO has a medical condition that limits her income. I'm in academia, so I don't make much and work crazy hours. We get to have happy day to day, and save money to invest by renting a shity apartment. As in, my investment account is worth more than that of some friends in software development, cus they wanted to live in good apartments.
It doesn't matter that average life expectancy is 10 years shorter. It matters why. Are people randomly getting murdered or constantly exposed to high air pollution? Don't live there. Is it shorter cus they are mostly stupid fucks that eat shity food and their only hobby is smoking on the bench below the building? You can live there fine, those are my neighboors. Doesn't stop me from eating healthy home made food, staying in shape and saving money.
Am I happy about it? No, I will never own a house, and it sucks cus I love to tinker, and enjoy growing plants. But I can live a full filling live, better than any king that ever lived up till around the 18-19 century, and save money.
The economic system is dead, it died in 2008. Combine that with climate change, and things are only going to get worse. Unless some politician is going to pull out free, infinite, energy machine out of their arse they can't do much as the system is already collapsing.
You can be smart about it, and have a few more happy years before we all die. Or you can be stupid about it, and suffer till we all die.
- am not a USA citizen, the problem is global.
Most areas don't need $100,000 a year to afford a "very modest house", you could get a nice mobile home and afford to pay off the loan in just a couple years.
the areas where most people live, however, do.
nobody wants to live in trailer park in Mobile, AL.
Everybody wants everything at no cost. That's not how the world works, though. If you earn $X a month and want to save some of it as a long-term investment, you simply cannot spend $X a month. You can't have both.
There are indeed some people who have no choice but to spend $X a month, their basic expenses just can't go any lower without literally ending up on the street or straight up dying. Those people do have a real problem and I sympathize with them.
People who say "I want to save money but I also want to live in the nicest possible house in the nicest possible neighborhood" I have less sympathy with, because they have a choice. I face that choice myself and instead of griping about how I can't have everything I want with no sacrifice I just go ahead and make the choice. I don't spend all my money each month, and as a result I don't take vacations as nice as I could take and I don't have as nice a car as I could have. But in exchange for that I've got plenty of savings built up.
Why not?
Lets define "most". Herein I define most as the area immediately surrounding the majority of people. 70% of people live in urban areas not out in bum fuck.
I live in a small city of 50,000 in Washington. A house around here starts at about 400k. I would have to pay about 3100 per month including taxes and insurance. I would take home about 6500 per month after taxes if I made 100k. At current interest rates I would need to spend 3100 per month to service such a loan.or about 47% of my take home pay. It is difficult to see how I could afford a home with a household not individual of less than 100,000.
Adjacent to me is a much bigger city with about 20x the jobs and opportunities. I would need more like 900k to buy into there. Realistically to afford a home there we are talking about my household making more than 200k. Why so much? Because housing has got very expensive and interest is very high.
A ton of urban areas have much options cheaper than the west coast though, mobile homes, townhouses, duplexes, etc. $400,000 is much more than a very modest house. For example I would consider a shotgun house very modest, and short of very high income areas they're usually much less than $400,000
Cheaper places are cheaper for a reason. Worse health care. Worse education for your kids. Worse life expectancy. Worse Opportunity. For instance St Louis has a median home price of 207k but they also have 10x the murder rate of Seattle a worse jobs outlook. You'll make less money etc.
Who in their right mind would want to live in a red state?
Cheaper places are cheaper for a reason.
Yes, and I agree I prefer higher density, but ultimately some people living in less desirable areas is more reasonable than trying to build ever taller skyscrapers in city centers- in a country with massive amounts of empty land.
Worse health care.
It depends, there are plenty of cheaper cities with very good healthcare, I grew up in Louisville, KY, spent a lot of time in LA, CA, and now live in Prague, CZ. Louisville has had the cheapest rent/purchase price and had by far the best quality healthcare(at least that I and my family received) out of anywhere I've lived.
Worse education for your kids.
This is valid in some cases, and there are plenty of valid reasons to desire living somewhere else more, that doesn't mean there aren't costs to that. Furthermore, there are plenty of expensive places with terrible school systems, plenty of cheap places with passable school systems, but more importantly traditional schools systems in general suck. Kids now days have access to the internet, that combined with parents who encourage curiosity and creativity will be much more important to them learning than the school system they go to.
For instance St Louis has a median home price of 207k but they also have 10x the murder rate of Seattle a worse jobs outlook.
That is cherrypicking, compare Chicago to Fargo, ND. Or a less distant example, Seattle to Spokane.
You’ll make less money etc.
Assuming you don't work remotely, but you'll also spend less.
Who in their right mind would want to live in a red state?
Not about being red or blue, its about not being a HCOL megalopolis. You can also move to Maine.
Manhattan doesn't have much room to expand up or out but but Seattle still has 70% single family homes it and surrounding cities have plenty of room to build up.
Spokane is largely populated by bigots and Trumpers. In particular the state congressman they elected wrote a paper the "biblical basis for war" wherein he advocated that after the fall of the united states they would make war on the rest of us nonbelievers taking the women prisoners and killing men who wouldn't submit in his new Christofascist white ISIS like kingdom. He was then caught trying to "rescue" a bunch of Ukrainian kids on behalf of an organization that existed on paper only without doing boring stuff like making sure they didn't have parents fighting in the war or other relations who wanted to take them.
On an economic front the Seattle Metro area has substantial commerce, an international airport, a port and 4M people. Spokane has about 230k. Adding another 230k would be a 5% increase in population for the Seattle Metro it would double spokane. The resources for expanding housing and resources in the Seattle metro actually exist. If it ever makes it there that is about half a century of growth for Spokane.
Ah the ol' deserving poor schtick. Classic.
OP is like: Even if you have highly-valuable skills, you can't get ahead, because the game is stacked in favor of renting out your assets instead of delivering valuable labor.
Reply is like: Yeah, but have you considered renting out your assets though?
Come up with a better idea besides complaining.
The funny thing is: You're not wrong, you're just talking about it at the wrong level.
Individually, if you don't save and invest, you're gonna be screwed due to unpredictable expenses, inflation, and lack of runway for retirement.
But if you zoom out and look at a whole population, it's also true that tons of people are in such severe financial conditions that they can't save and invest, so your advice is something like "buy a life jacket" to someone who's already 10 feet underwater.
And if you zoom out even further, there's no way that we're going to solve severe wealth inequality through individual action. And especially not through investing, which helps you as an individual relative to other individuals, but also provides more options to the wealthy recipients/managers of the funds to extract wealth at a rate higher than your ROI, which accelerates the concentration of assets in the hands of people who already own a disproportionate amount of them.