More Than a Third of 250k Earners Live Paycheck-to-Paycheck

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Several times a year I think "where does all our money go???" because when I look at our checking account balance- it doesn't seem to match our salaries. But then I remember- we are making double house payments, putting money into investments and college fund, maxing out 401Ks, etc... but if someone didn't know those things they would think the 50K in our checking account was pathetic.

50k in checking is stupid to begin with. 3-6 months total expenses, the rest should be invested.

Our mortgage is $4k/month. So that’s $24k right there for 6 months.

$50k would barely keep the lights on unless you live in WV or bought your house in the 90s.

Not the PP, but I also think 50k is too much to leave in a checking account. I'd keep around 15k in the checking account and move the rest into a high interest savings account or a ladder CD. Both would keep the money very liquid in the case of an emergency, but at least you will make some interest on it. If you put 35k in a 12mo CD at 4.75% (widely available right now), you would make $1662 on it this year. Not a huge sum, but more than $0, and if you feel like "where does all our money go?" now, an extra $1600 is four nights in a hotel in NYC, or two plane tickets to London, or several nice date nights for you and your spouse, or summer camp, or whatever.

Also, depending on job stability, you don't even have to keep your emergency fund THAT liquid. We have 20k in I-bonds that would currently incur a small penalty if we withdrew it. But the money is still available and if we were in a dire situation where we needed it, that penalty would be a blip (basically giving up the previous year's interest). We have other money that is more liquid, but we tuck money into situations like that all the time. Anything we can do to make our money work for us more on the margins. It adds up.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Several times a year I think "where does all our money go???" because when I look at our checking account balance- it doesn't seem to match our salaries. But then I remember- we are making double house payments, putting money into investments and college fund, maxing out 401Ks, etc... but if someone didn't know those things they would think the 50K in our checking account was pathetic.

50k in checking is stupid to begin with. 3-6 months total expenses, the rest should be invested.

Our mortgage is $4k/month. So that’s $24k right there for 6 months.

$50k would barely keep the lights on unless you live in WV or bought your house in the 90s.

Not the PP, but I also think 50k is too much to leave in a checking account. I'd keep around 15k in the checking account and move the rest into a high interest savings account or a ladder CD. Both would keep the money very liquid in the case of an emergency, but at least you will make some interest on it. If you put 35k in a 12mo CD at 4.75% (widely available right now), you would make $1662 on it this year. Not a huge sum, but more than $0, and if you feel like "where does all our money go?" now, an extra $1600 is four nights in a hotel in NYC, or two plane tickets to London, or several nice date nights for you and your spouse, or summer camp, or whatever.

Also, depending on job stability, you don't even have to keep your emergency fund THAT liquid. We have 20k in I-bonds that would currently incur a small penalty if we withdrew it. But the money is still available and if we were in a dire situation where we needed it, that penalty would be a blip (basically giving up the previous year's interest). We have other money that is more liquid, but we tuck money into situations like that all the time. Anything we can do to make our money work for us more on the margins. It adds up.

+1 but you have to keep an eye on your checking out if you only leave one month's worth of expenses.

I move money into a savings account which now has a rate close to 4%. It has a few month's worth of expenses there, and I can easily transfer to my checking if I need to.

I only keep one month expense + extra ~2000 in case in my checking account. But, you do need to keep an eye on the account in case you have an uptick in expenses that month.

[Anonymous]

Anonymous wrote:If you have a bunch of automatic investments/deposits into retirement/investment/college accounts, then you are not living paycheck to paycheck just because you spend all the rest of the money every month. You could save less (ask someone making 60k if they are maxing their 401k contribution and they will either laugh at you or get confused because unless their housing is free, that's probably not possible). Just change your contributions. Easy.

Choosing to aggressive save/invest a huge portion of your income can be a smart strategy in the long rung. It doesn't magically make you poor. The opposite, actually.

People are so, so dumb.

+1 that is not "living paycheck to paycheck"

[Anonymous]

You people are so out of touch with your 4k mortgage, 50k expenses, double mortgage payments and measly 50k checking accounts.

I bet you all consider yourselves middle class.

FFS get some perspective.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Several times a year I think "where does all our money go???" because when I look at our checking account balance- it doesn't seem to match our salaries. But then I remember- we are making double house payments, putting money into investments and college fund, maxing out 401Ks, etc... but if someone didn't know those things they would think the 50K in our checking account was pathetic.

50k in checking is stupid to begin with. 3-6 months total expenses, the rest should be invested.

What if I spend 50k every 2 months?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Several times a year I think "where does all our money go???" because when I look at our checking account balance- it doesn't seem to match our salaries. But then I remember- we are making double house payments, putting money into investments and college fund, maxing out 401Ks, etc... but if someone didn't know those things they would think the 50K in our checking account was pathetic.

50k in checking is stupid to begin with. 3-6 months total expenses, the rest should be invested.

What if I spend 50k every 2 months?

Damn bro, you dumb or what? 3-6 months total expenses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Several times a year I think "where does all our money go???" because when I look at our checking account balance- it doesn't seem to match our salaries. But then I remember- we are making double house payments, putting money into investments and college fund, maxing out 401Ks, etc... but if someone didn't know those things they would think the 50K in our checking account was pathetic.

50k in checking is stupid to begin with. 3-6 months total expenses, the rest should be invested.

What if I spend 50k every 2 months?

Damn bro, you dumb or what? 3-6 months total expenses.

So 75-150k then. Got it.

[Anonymous]

What happened to living below your means? I have no sympathy. $250k is an excellent income.

[Anonymous]

Anonymous wrote:If you have a bunch of automatic investments/deposits into retirement/investment/college accounts, then you are not living paycheck to paycheck just because you spend all the rest of the money every month. You could save less (ask someone making 60k if they are maxing their 401k contribution and they will either laugh at you or get confused because unless their housing is free, that's probably not possible). Just change your contributions. Easy.

Choosing to aggressive save/invest a huge portion of your income can be a smart strategy in the long rung. It doesn't magically make you poor. The opposite, actually.

People are so, so dumb.

It definitely doesn’t make someone poor. It also doesn’t mean people are able to enjoy the trappings of not being poor. These folks aggressively saving are doing it so that one day they can retire and not die working. The amount of seniors in this country that are living payment to payment is dangerously high.

[Anonymous]

We live from paycheck to paycheck because most of our networth is in real estate. We are not poor but you can’t eat brick for dinner.

[Anonymous]

Anonymous wrote:We live from paycheck to paycheck because most of our networth is in real estate. We are not poor but you can’t eat brick for dinner.

Then sell your bricks and purchase food.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We live from paycheck to paycheck because most of our networth is in real estate. We are not poor but you can’t eat brick for dinner.

Then sell your bricks and purchase food.

We are not starving living from paycheck to paycheck. And why does it bother you that I use up my paycheck?

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you have a bunch of automatic investments/deposits into retirement/investment/college accounts, then you are not living paycheck to paycheck just because you spend all the rest of the money every month. You could save less (ask someone making 60k if they are maxing their 401k contribution and they will either laugh at you or get confused because unless their housing is free, that's probably not possible). Just change your contributions. Easy.

Choosing to aggressive save/invest a huge portion of your income can be a smart strategy in the long rung. It doesn't magically make you poor. The opposite, actually.

People are so, so dumb.

It definitely doesn’t make someone poor. It also doesn’t mean people are able to enjoy the trappings of not being poor. These folks aggressively saving are doing it so that one day they can retire and not die working. The amount of seniors in this country that are living payment to payment is dangerously high.

Sure but it’s still not living paycheck to paycheck.

-feels poor sometimes because my rent/daycare/tax/401k portion of my paycheck is like 80% but realistically know I am not because it’s not >100% and also I have a solid emergency fund

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Several times a year I think "where does all our money go???" because when I look at our checking account balance- it doesn't seem to match our salaries. But then I remember- we are making double house payments, putting money into investments and college fund, maxing out 401Ks, etc... but if someone didn't know those things they would think the 50K in our checking account was pathetic.

50k in checking is stupid to begin with. 3-6 months total expenses, the rest should be invested.

Our mortgage is $4k/month. So that’s $24k right there for 6 months.

$50k would barely keep the lights on unless you live in WV or bought your house in the 90s.

Not the PP, but I also think 50k is too much to leave in a checking account. I'd keep around 15k in the checking account and move the rest into a high interest savings account or a ladder CD. Both would keep the money very liquid in the case of an emergency, but at least you will make some interest on it. If you put 35k in a 12mo CD at 4.75% (widely available right now), you would make $1662 on it this year. Not a huge sum, but more than $0, and if you feel like "where does all our money go?" now, an extra $1600 is four nights in a hotel in NYC, or two plane tickets to London, or several nice date nights for you and your spouse, or summer camp, or whatever.

Also, depending on job stability, you don't even have to keep your emergency fund THAT liquid. We have 20k in I-bonds that would currently incur a small penalty if we withdrew it. But the money is still available and if we were in a dire situation where we needed it, that penalty would be a blip (basically giving up the previous year's interest). We have other money that is more liquid, but we tuck money into situations like that all the time. Anything we can do to make our money work for us more on the margins. It adds up.

+1 but you have to keep an eye on your checking out if you only leave one month's worth of expenses.

I move money into a savings account which now has a rate close to 4%. It has a few month's worth of expenses there, and I can easily transfer to my checking if I need to.

I only keep one month expense + extra ~2000 in case in my checking account. But, you do need to keep an eye on the account in case you have an uptick in expenses that month.

PP here. We manage cash flow issues with a lower checking account balance by putting almost all expenses on a rewards credit card which we pay off manually every month. The amount on that card can fluctuate a lot, depending on whether we’re paying for airfare or other vacation expenses, major home purchases, etc. We do sometimes have to shift money into checking to pay it off. But that’s just once a month, so we have a system set up to check the balance of our checking account before paying it each month. But that’s better than having to check every time we make a bigger purchase. Plus we earn a lot of airline miles that way.

[Anonymous]

We make $170k in Rockville and still save money. We feel very fortunate. Not rich but certainly on the low end of upper middle class. People that can’t afford their lifestyles on $200k plus bewilder me unless they choose to live in the most expensive cities and posh neighborhoods.