Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
Most Americans are one paycheck away from the street
I saw that, too. Financial ignorance is one big reason. I ran into a website the other day which claims that 48% of those in Massachusetts hold sub-prime credit ratings. I GUESS I understand what that means. Also, I think many people do in fact get paid peanuts for their hard work. Maybe the biggest reason, sadly, is the Consumerism that is all around, everywhere, seemingly in the air and the water. Spend, spend, spend. Don't think, plan or arrange. As long as one is able to pay the bills, the "pay yourself first" dictum is THE best place to start, methinks.
From the Bankrate.com article that the Marketwatch story is citing:
"'Let's give everyone credit for that. 60% are taking grown-up responsibility for the expense,' says Robert Fragasso, chairman and CEO at Fragasso Financial Advisors in Pittsburgh."
It goes on to say that another 15% would handle the unexpected expense by using credit cards - a strategy that I've seen people here advocate (as an alternative to keeping emergency cash).
Out on the street? Doesn't sound like it. Crunched? Yes.
I mostly agree with Crash. Lots of low pay for honest days of work. Also lots of student debt that didn't exist years ago. While consumerism is a factor, it's not something new. Check how far back conspicuous consumption goes. Or "keeping up with the Jones" (mentioned in the linked article).
In particular, in the "Periods of Conspicuous Consumption" section of the article, we have:
"Affluent Societies. ... The 1950's has been recognized as the first affluent society decade in the United States"
"Beyond Affluence. The post affluent society is characterized by the heightened materialism of the 1980's. Not since the 1920's was conspicuous consumption so lauded."
The entire article seems to be a miss-mosh of loosely related negative themes attempting to build something out of mostly anecdotal poorly documented generalities. A waste of perfectly good zeros and ones, if not paper. Suitable for commercial network TV, perhaps, but not much else.
Dex said "I'm not one of them and never have. If I were I would do something to change that situation. How about you?"
No. Not currently one of them. But I can recall some tough times in the earlier years - even after graduating from college and landing the first job. Currently things are good. But give us a few years of markets like this week's, and who knows?
(I didn't read the article based on OJ's description of it and his usually unimpeachable judgment.)
Dex said "I'm not one of them and never have. If I were I would do something to change that situation. How about you?"
No. Not currently one of them. But I can recall some tough times in the earlier years - even after graduating from college and landing the first job. Currently things are good. But give us a few years of markets like this week's, and who knows?
(I didn't read the article based on OJ's description of it and his usually impeachable judgment.)
In my 20s and 30s I rarely even had a paycheck! I was the poster boy for Deadbeat Inc.
Edit: No, make that Failure Inc. I always had a dream and deadbeats don't have dreams.
Some facts to consider: 1. On an inflation adjusted basis wages for those receiving minimum wage have actually declined in the last 30 years. 2. Wages in general for Americans have not budged at all on an inflation adjusted basis during the same period. 3. In the era most of the older people on this board grew up in it was still possible to get a decent paying job with no advanced education, perhaps not even a high school diploma in many parts of the country. That's because we still had a strong industrial base. Today if you don't have a college degree in a service based economy, you will most likely have a very poorly paying job. 4. While inflation in general has largely been benign in recent decades, tuition rates have skyrocketed while the federal government cut back on Pell Grants so many graduates are saddled with tremendous amounts of debt. 5. Millennials in general are not buying houses. In fact this poses a significant problem for the housing market. A house and furnishing it are some of the biggest expenses people normally spend on during their lifetimes. 6. So where is this "conspicuous consumption" all the old timers on this board are talking about? 7. I often see these articles about how wasteful everyone is today and these recommendations about spending so much money on coffee at Starbucks. I rarely see any recommendations that CEOs stop giving themselves raises and sending jobs overseas. Executive compensation in the last 30 years has gone from about 40 times the average worker to well over 300 times.
I sort of agree with what was implied by Lewis B and challenge Dex a little . What would you do to change the situation" , Assume hypothetically you are head ofa family of three in cleveland making 40k in a non union job with a high school degree
Yes, things are quite different from the '60s and '70s, when I came of age. And vastly different from the '50s. Specialization is a given, today. But "specialization" seems to me to gloss-over the fact that what is really MEANT is just to already know which buttons to push. Not so specialized at all, in the ordinary use of the word, implying mastery of something beyond the layman's ability or knowledge. Intelligence and diligent study don't matter the way they once did. What has become essential is to learn how to operate the machine. And it needs to be either Machine A or Machine B, because nobody is using Machine C, any longer.
Widening one's knowledge and awareness as with the Liberal Arts is an idea that today has been thrown under the bus. "Come get rich with Employer X, by IGNORING the benefits of greater knowledge and deepening your humanity."
I sort of agree with what was implied by Lewis B and challenge Dex a little . What would you do to change the situation" , Assume hypothetically you are head ofa family of three in cleveland making 40k in a non union job with a high school degree
Get a second job!
Husband stays home while the wife gets a second job as a pole dancer (pole dancing is a great way of exercising so no gym fees).
-----
But I never suggested there was a solution and so it is wrong for you to challenge me.
If you follow my posts, as you should, you would know that I don't think there is a solution. There will just be more of the same.
What would you do to pay for an unexpected expense of $1000? And for one of $10K? Answers from different age groups, this year and last: Good news: looks like Millenials, so often mocked, are getting the hang of this Bad news: no one else appears to be getting better Still, I expected to see much worse. See what you think. [Make sure you're sitting down when you read the "advice" given for managing a $10K expense by a financial advisor who was asked to comment on the results..... so sad it's funny]
I find it funny nobody mentioned taking the $$ from another segment of their annual budget. This might mean many folks don't have well planned budgets. Or, it might signal that most families' budgets contain no non-essentials. Examples of shifting $$ to cover an unanticipated expense would be cancelling a planned vacation, deferring planned home improvements, or putting off pre-budgeted technology upgrades.
Isn't this how businesses attempt to deal with similar unexpected situations?
Those are truly discretionary, hence do not always (or ever) have the moneys automatically set aside and liquidly available for emergency. Some businesses borrow.
@jerry- Now you've done it! You actually challenged the all-knowing and infallible Dex, whom you should be following closely in awe and admiration. Woe be unto you!
The survey reported that: "Nearly a quarter of people, 23%, reported they would pay for an emergency by reducing spending on other things." Maybe not an explicit annual budget adjustment, but effectively the same thing.
The financial advisor seemed to be saying that if you are unable to handle a sizeable unexpected expense ($10K, as opposed to the $500 headline item) without borrowing (or paying it off quickly), then borrow at a low rate and make the interest deductible. Sounds like reasonable advice.
Those are truly discretionary, hence do not always (or ever) have the moneys automatically set aside and liquidly available for emergency.
Yep - Those were probably bad examples on my part. However, someone (can't recall who) posted their family budget not too long ago showing a monthly allocation for wine.
Now, dropping down from $10 or $15 a bottle to $5 or less is entirely possible - however distasteful.
ha, I drink little but (pretty good ~$6 wine, that is). Yeah, I have serious roof work coming up and am debating adding to my 3.5% heloc instead of retirement moneys. Probably will, though I know what retirement articles will mostly say. Am deferring, for the moment, $900 worth of cavity-filling, oi. No fun watching this market in retirement, I must say.
I pre-save for almost everything - new car, new roof, new heater - almost everything that has a great possibility of needing replacement/repair in the next five years or so. My emergency fund just grows like uncut grass but the buckets of money are still there with labels. I decided years ago that you pay cash for a car and then deposit what would have been the payment in your new car fund for next time. (Yea, I know rates are so low that this is stupid today but bad habits are hard to break.) Last year, because we have no debt payments, we had $25K excess income to delegate to all kind of buckets. The current buckets are full if and when needed so maybe I should start a paint the house or new living room furniture bucket.
Edit - I have been a minimum wage slave and it was all I could do to pay the rent and feed myself while saving for the next year of college. But it could be done in the 70s. But not now. Somewhere along the line debt usurped livable wage allowing that cheap apartment house to be torn down for a spanking new parking lot. I don't think kids can get the toe-hold in the economy that was possible back then. So don't think what I wrote above is the future for new generations today.
@Anna and Old Joe, I think the hardest thing to plan for emergency-wise is any sort of long-term disability. My impression is even the insurance options aren't all that great and extremely expensive for good coverage.
What I don't understand is why so many people, especially older people, want to live alone, when living with a roommate/significant other can help financially, as well as socially. My late mother had several widowed friends who struggled financially on their own...why not live "Golden Girls" style?
If anything happened to my bf, I would definitely get another roomie/significant other...and financially, I would be absolutely fine on my own.
What I don't understand is why so many people, especially older people, want to live alone, when living with a roommate/significant other can help financially, as well as socially.
@Dex You started an interesting discussion and then you lost all credibility with your last comment.
And you have knowledge of what I wrote. But that is the reality of the net, anyone with a connection can write a post. Next time before you put your foot in your mouth do a bit of research.
@Dex I believe it was an attempt to defend me. Thanks, @Mark!
But, wow...that was an earth-shaking scientific article you posted to prove your point...right up there with DNA sequencing! How did I miss that? Oh, right, I'm staying busy by volunteering at my local food bank, so obviously, I'm not as current on "olfactorology" as you are.
I'm just stunned that you would make a comment that you knew would offend many of our beloved posters. Even if something is true, it doesn't mean you have to state it....most of us learn this in kindergarten....if not earlier. And maybe it was not so much what you said, but the declarative way that you stated it: "Old people smell bad. " As if any of us have a choice...I will feel extremely lucky if I live a long life...even if I reek!
As I recall, you are no spring chicken, either. I hope someday the person changing YOUR Depends in the nursing home has more compassion than you seem to have!
Comments
From the Bankrate.com article that the Marketwatch story is citing:
"'Let's give everyone credit for that. 60% are taking grown-up responsibility for the expense,' says Robert Fragasso, chairman and CEO at Fragasso Financial Advisors in Pittsburgh."
It goes on to say that another 15% would handle the unexpected expense by using credit cards - a strategy that I've seen people here advocate (as an alternative to keeping emergency cash).
Out on the street? Doesn't sound like it. Crunched? Yes.
I mostly agree with Crash. Lots of low pay for honest days of work. Also lots of student debt that didn't exist years ago. While consumerism is a factor, it's not something new. Check how far back conspicuous consumption goes. Or "keeping up with the Jones" (mentioned in the linked article).
In particular, in the "Periods of Conspicuous Consumption" section of the article, we have:
"Affluent Societies. ... The 1950's has been recognized as the first affluent society decade in the United States"
"Beyond Affluence. The post affluent society is characterized by the heightened materialism of the 1980's. Not since the 1920's was conspicuous consumption so lauded."
How about you?"
No. Not currently one of them. But I can recall some tough times in the earlier years - even after graduating from college and landing the first job. Currently things are good. But give us a few years of markets like this week's, and who knows?
(I didn't read the article based on OJ's description of it and his usually unimpeachable judgment.)
Edit: No, make that Failure Inc. I always had a dream and deadbeats don't have dreams.
@Hank- aww, you noticed! Very accurate description... I've been impeached so many times I've totally lost count.
Apologies to OJ.
PS - Went back & corrected the damage. I think you'll like it better.
1. On an inflation adjusted basis wages for those receiving minimum wage have actually declined in the last 30 years.
2. Wages in general for Americans have not budged at all on an inflation adjusted basis during the same period.
3. In the era most of the older people on this board grew up in it was still possible to get a decent paying job with no advanced education, perhaps not even a high school diploma in many parts of the country. That's because we still had a strong industrial base. Today if you don't have a college degree in a service based economy, you will most likely have a very poorly paying job.
4. While inflation in general has largely been benign in recent decades, tuition rates have skyrocketed while the federal government cut back on Pell Grants so many graduates are saddled with tremendous amounts of debt.
5. Millennials in general are not buying houses. In fact this poses a significant problem for the housing market. A house and furnishing it are some of the biggest expenses people normally spend on during their lifetimes.
6. So where is this "conspicuous consumption" all the old timers on this board are talking about?
7. I often see these articles about how wasteful everyone is today and these recommendations about spending so much money on coffee at Starbucks. I rarely see any recommendations that CEOs stop giving themselves raises and sending jobs overseas. Executive compensation in the last 30 years has gone from about 40 times the average worker to well over 300 times.
Widening one's knowledge and awareness as with the Liberal Arts is an idea that today has been thrown under the bus. "Come get rich with Employer X, by IGNORING the benefits of greater knowledge and deepening your humanity."
Husband stays home while the wife gets a second job as a pole dancer (pole dancing is a great way of exercising so no gym fees).
-----
But I never suggested there was a solution and so it is wrong for you to challenge me.
If you follow my posts, as you should, you would know that I don't think there is a solution. There will just be more of the same.
What would you do to pay for an unexpected expense of $1000? And for one of $10K? Answers from different age groups, this year and last:
Good news: looks like Millenials, so often mocked, are getting the hang of this
Bad news: no one else appears to be getting better
Still, I expected to see much worse. See what you think. [Make sure you're sitting down when you read the "advice" given for managing a $10K expense by a financial advisor who was asked to comment on the results..... so sad it's funny]
I find it funny nobody mentioned taking the $$ from another segment of their annual budget. This might mean many folks don't have well planned budgets. Or, it might signal that most families' budgets contain no non-essentials. Examples of shifting $$ to cover an unanticipated expense would be cancelling a planned vacation, deferring planned home improvements, or putting off pre-budgeted technology upgrades.
Isn't this how businesses attempt to deal with similar unexpected situations?
The financial advisor seemed to be saying that if you are unable to handle a sizeable unexpected expense ($10K, as opposed to the $500 headline item) without borrowing (or paying it off quickly), then borrow at a low rate and make the interest deductible. Sounds like reasonable advice.
Now, dropping down from $10 or $15 a bottle to $5 or less is entirely possible - however distasteful.
Yeah, I have serious roof work coming up and am debating adding to my 3.5% heloc instead of retirement moneys. Probably will, though I know what retirement articles will mostly say. Am deferring, for the moment, $900 worth of cavity-filling, oi. No fun watching this market in retirement, I must say.
Edit - I have been a minimum wage slave and it was all I could do to pay the rent and feed myself while saving for the next year of college. But it could be done in the 70s. But not now. Somewhere along the line debt usurped livable wage allowing that cheap apartment house to be torn down for a spanking new parking lot. I don't think kids can get the toe-hold in the economy that was possible back then. So don't think what I wrote above is the future for new generations today.
If anything happened to my bf, I would definitely get another roomie/significant other...and financially, I would be absolutely fine on my own.
‘Old-Person Smell’ Really Exists, Scientists Say
http://healthland.time.com/2012/05/31/old-person-smell-really-exists-scientists-say/
https://en.wikipedia.org/wiki/Old_man_smell
But, wow...that was an earth-shaking scientific article you posted to prove your point...right up there with DNA sequencing! How did I miss that? Oh, right, I'm staying busy by volunteering at my local food bank, so obviously, I'm not as current on "olfactorology" as you are.
I'm just stunned that you would make a comment that you knew would offend many of our beloved posters. Even if something is true, it doesn't mean you have to state it....most of us learn this in kindergarten....if not earlier. And maybe it was not so much what you said, but the declarative way that you stated it: "Old people smell bad. " As if any of us have a choice...I will feel extremely lucky if I live a long life...even if I reek!
As I recall, you are no spring chicken, either. I hope someday the person changing YOUR Depends in the nursing home has more compassion than you seem to have!