Our generation's lack of work ethic and money skills.

[Brainonska511]

Because they are living P2P. NW doesn't mean much, esp when it could easily be theoretical gains in their house or other stuff they could be including which isn't liquid.

Some people might be living paycheck to paycheck, but if >50% of Americans have 3 months of living expenses in cash accounts and/or $8k in cash accounts, they are by definition, not living paycheck to paycheck. Last I checked, cash accounts are liquid.

It's also such a useless metric because everyone defines it differently.

 

[Red Squirrel]

Just the opposite, really. Inflation is totally awesome if you're in debt and sucks if you have savings.

That doesn't even make sense. If you're in debt it literally means you are living pay to pay and you would want extra cash flow so you can pay it off. If you have savings then it means inflation is not really affecting you because you're making lot more money than your COL. I mean sure nice things will be more expensive, but at least you HAVE savings and extra money at the end of the month to put into savings. Everyone is affected by inflation to some degree but those in debt are affected more since it means they can't pay it off as easily.

 

[Exterous]

It's also such a useless metric because everyone defines it differently.

For some survey questions in the past we would have qualified as 'paycheck to paycheck' because it was based on net paycheck deposits (or otherwise broad definition) therefore ignoring our 30% savings rate

 

[jpiniero]

Some people might be living paycheck to paycheck, but if >50% of Americans have 3 months of living expenses in cash accounts and/or $8k in cash accounts,

That ain't gonna last long... not with their housing costs and all that credit card debt. Y'know, people thought Apple was going to be screwed when the carriers stopped giving the subsidies and nobody would buy thousand dollar phones. Turns out Apple had a plan - modern day layaway. $3k luxury apartment on 100k HHI? Don't care, gotta have it.

(https://www.cnbc.com/2024/02/22/ame...g-less-money-toward-credit-card-payments.html)

 

[Brainonska511]

That ain't gonna last long... not with their housing costs and all that credit card debt. Y'know, people thought Apple was going to be screwed when the carriers stopped giving the subsidies and nobody would buy thousand dollar phones. Turns out Apple had a plan - modern day layaway. $3k luxury apartment on 100k HHI? Don't care, gotta have it.

(https://www.cnbc.com/2024/02/22/ame...g-less-money-toward-credit-card-payments.html)

Keep moving those goal posts; at the end of the day, the majority are not living paycheck to paycheck, as the data about median cash account holdings and median ability to absorb emergency expenses shows us.

And just like paycheck to paycheck is a useless metric, so is "luxury" when it comes to housing. Everything new is "luxury" because it's a marketing term with no real meaning. Plus, if someone/household is making $100k+, there is nothing wrong with a $3k apartment (following the 1/3 rule). Hell, I live in a "luxury" apartment. All it means is that it is that I get to live closer to mass transit, have some modern amenities like modern interior and conforming with more recent than WWI fire codes, and it was built in the last 20 years. Thanks to 40+ years of NIMBYism, in my region, housing is ridiculously expensive, regardless of the quality; you could be paying the same or more for to live in a slighly closer to the city center, but total shitheap built around WWI that could burn down if you look at it funny.

 

[Dr. Detroit]

- modern day layaway.

(https://www.cnbc.com/2024/02/22/ame...g-less-money-toward-credit-card-payments.html)

Buy Now Pay Later!

https://finance.yahoo.com/news/struggling-consumers-use-buy-now-pay-later-services-for-everyday-necessities--even-groceries-214106284.html

https://www.cnbc.com/2024/01/21/buy-now-pay-later-shoppers-deal-with-holiday-debt.html

https://www.axios.com/2024/02/06/americans-credit-card-auto-loan-delinquencies

As others noted "paycheck to paycheck" is meaningless, as folks are often saving through their 401K, HSA, ESPP and other payroll deductions.

 

[Red Squirrel]

I think an easy metric to determine if someone is living pay to pay is to ask if they were to have a pay cheque simply not come in for a pay period for a reason or the other, would they need to use credit to pay the bills and other costs of living. If yes, then they are living pay to pay.

All the various savings that might be happening is not money that is immediately available and there are often penalties to taking it out as well.