Why is it hard for some privileged people to realize that saving is hard?

[Anonymous]

People can't even imagine more that 1 emergency might happen.

[Anonymous]

Anonymous wrote:

Anonymous wrote:For me, I make $18/hr. thats about $2880/month (after taxes, it's more like $2500) if I work 40 hrs a week. I don't always get 40 hrs, so this is a rough estimate.

Rent: 1200
Food: 400
Utilities: $300
Phone: $100
Internet: $50
Car Insurance: $150
Health insurance: $200
Gas: $100

That comes out to about $2500.
No, I'm not going out to eat, getting fancy coffee, or getting my nails done. I'm paying bills. I don't feel poor... I feel comfortable but if there is any type of emergency, I'll be SOL.

I don’t get this. Why are you living in such a high COL area when you make such a low salary? You can get an $18/hour job literally anywhere in the country and you could cut your rent in half. That’s your problem here...it doesn’t make any sense.

Here's what I don't get: who do you think is going to take the jobs that are <$18/hour in high COL areas, if they can't live there or nearby? Do you think it's possible to have a functional community where no one works at restaurants, as a janitor, delivery person, a store clerk, etc.? It doesn't make any sense.

Whenever I read people complaining that those who don't earn enough to be able to afford a place to live should just get a different job I want to scream. WHO DO YOU THINK IS GOING TO PICK UP YOUR GARBAGE?????

You're probably the same people who vote no to raise the minimum wage.

Jeesus. There are many types of jobs that need to be done for society to function, not just hedge funds management. Ideally all those jobs would be paid a living wage so that people who work them can afford a place to live and to buy food and insurance.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

I didn't read through the whole thread because after a few pages I see you are getting alot of shade and shaming on this. Just want to say I agree with you. These people do not know what its like to be poor or live on a razors edge. Its very self righteous of them. Yes, there are people who are poor and make bad financial decisions. And yes, they could cut out some luxuries for sure. But cutting out a starbucks a couple times a week is not going to give you 6 months of living expenses. Get a grip people! Also, when you are that on the edge, you are often one step away from crisis and any savings you have get eaten up on a regular basis. ie. you manage to scrimp together $1000 in savings. Yay. Then you have a medical problem and need some testing done that's only partially covered by your insurance, your car breaks down or needs regular maintenance, etc. etc.

I agree with you. Privileged people can be completely tone deaf and simply have no frame of reference to understand. Not everyone can just go get a loan to cover their expenses like our supreme dumbass commerce secretary Wilbur Ross suggests

This sort of thinking right here is why people can't build emergency funds. No, cutting out Starbucks won't give you 6 months of emergency savings overnight, but keep doing it and it sure will. And you know what happens when you start consciously thinking about every $1-$2 expense like Starbucks? You end up cutting other little things here and there. And then over time, you have savings.

And then you have a medical emergency that cuts out that savings and guess what, you start over! You do the same thing you did before to scrimp that $1000 together until you need $1000 for the next emergency. But you don't never try to save to begin with because you might have that emergency one day that will use up the savings.

1000x this.

No. You clearly have no understanding of what it means to be low income. It's not about Starbucks.

Can we at least agree that people tight on cash shouldn’t buy Starbucks? Or they “deserve” it? I’m honestly curious. We have a high HHI and I think Starbucks (and other yuppy type coffee places) are outrageously priced and I ONLY go if a friend expressly invites me to meet there. And I order a “tall” regular coffee and still internally roll my eyes at the ridiculousness of the place.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

I didn't read through the whole thread because after a few pages I see you are getting alot of shade and shaming on this. Just want to say I agree with you. These people do not know what its like to be poor or live on a razors edge. Its very self righteous of them. Yes, there are people who are poor and make bad financial decisions. And yes, they could cut out some luxuries for sure. But cutting out a starbucks a couple times a week is not going to give you 6 months of living expenses. Get a grip people! Also, when you are that on the edge, you are often one step away from crisis and any savings you have get eaten up on a regular basis. ie. you manage to scrimp together $1000 in savings. Yay. Then you have a medical problem and need some testing done that's only partially covered by your insurance, your car breaks down or needs regular maintenance, etc. etc.

I agree with you. Privileged people can be completely tone deaf and simply have no frame of reference to understand. Not everyone can just go get a loan to cover their expenses like our supreme dumbass commerce secretary Wilbur Ross suggests

This sort of thinking right here is why people can't build emergency funds. No, cutting out Starbucks won't give you 6 months of emergency savings overnight, but keep doing it and it sure will. And you know what happens when you start consciously thinking about every $1-$2 expense like Starbucks? You end up cutting other little things here and there. And then over time, you have savings.

And then you have a medical emergency that cuts out that savings and guess what, you start over! You do the same thing you did before to scrimp that $1000 together until you need $1000 for the next emergency. But you don't never try to save to begin with because you might have that emergency one day that will use up the savings.

1000x this.

No. You clearly have no understanding of what it means to be low income. It's not about Starbucks.

Can we at least agree that people tight on cash shouldn’t buy Starbucks? Or they “deserve” it? I’m honestly curious. We have a high HHI and I think Starbucks (and other yuppy type coffee places) are outrageously priced and I ONLY go if a friend expressly invites me to meet there. And I order a “tall” regular coffee and still internally roll my eyes at the ridiculousness of the place.

No, because your premise is wrong. Poverty is not due to Starbucks expenditures.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

I didn't read through the whole thread because after a few pages I see you are getting alot of shade and shaming on this. Just want to say I agree with you. These people do not know what its like to be poor or live on a razors edge. Its very self righteous of them. Yes, there are people who are poor and make bad financial decisions. And yes, they could cut out some luxuries for sure. But cutting out a starbucks a couple times a week is not going to give you 6 months of living expenses. Get a grip people! Also, when you are that on the edge, you are often one step away from crisis and any savings you have get eaten up on a regular basis. ie. you manage to scrimp together $1000 in savings. Yay. Then you have a medical problem and need some testing done that's only partially covered by your insurance, your car breaks down or needs regular maintenance, etc. etc.

I agree with you. Privileged people can be completely tone deaf and simply have no frame of reference to understand. Not everyone can just go get a loan to cover their expenses like our supreme dumbass commerce secretary Wilbur Ross suggests

This sort of thinking right here is why people can't build emergency funds. No, cutting out Starbucks won't give you 6 months of emergency savings overnight, but keep doing it and it sure will. And you know what happens when you start consciously thinking about every $1-$2 expense like Starbucks? You end up cutting other little things here and there. And then over time, you have savings.

And then you have a medical emergency that cuts out that savings and guess what, you start over! You do the same thing you did before to scrimp that $1000 together until you need $1000 for the next emergency. But you don't never try to save to begin with because you might have that emergency one day that will use up the savings.

1000x this.

No. You clearly have no understanding of what it means to be low income. It's not about Starbucks.

Can we at least agree that people tight on cash shouldn’t buy Starbucks? Or they “deserve” it? I’m honestly curious. We have a high HHI and I think Starbucks (and other yuppy type coffee places) are outrageously priced and I ONLY go if a friend expressly invites me to meet there. And I order a “tall” regular coffee and still internally roll my eyes at the ridiculousness of the place.

No, because your premise is wrong. Poverty is not due to Starbucks expenditures.

I think Starbucks is a symbiolic example. Poor people are and remain low income through poor decision making. I know/knew several Asian families who came here with only a few thousand dollars not understanding English etc. They worked constantly, saved every penny not matter what it was. 20 years later they all own multiple properties, drive luxury cars, own large houses in prestigious suburbs.

[Anonymous]

Only 2 percent of those who follow these three rules are in poverty:

1) Finish high school (at a minimum)
2) Get a full-time job
3) No marriage or children before age 21

https://www.brookings.edu/opinions/three-simple-rules-poor-teens-should-follow-to-join-the-middle-class/

[Anonymous]

Saving is hard for people on a low income. Saving should not be hard for people who are making a high income but are living beyond their means. I understand this as a persone who at one time in my life had very low income and now has a good income.

[Anonymous]

Anonymous wrote:Saving is hard for people on a low income. Saving should not be hard for people who are making a high income but are living beyond their means. I understand this as a persone who at one time in my life had very low income and now has a good income.

Look, part of it is numbers and part is attitude. Tom Wolfe, in Bonfire of the Vanities, has an extensive paragraph where the main character goes into how he earned $980,000 last year, and yet still spent more than $980,000. And how essential it all was, and how he couldn't possibly cut back on anything.

It relative, you have to live within your means to save money. You can make $40K a year or 200K a year and be broke or OK in either situation.

I am a federal employee, I earn about $160K per year, and its for a family of five. We live in a decent house that I just finished paying off. I dumped some savings and lump-summed the last of the loan. I'm 40 years old, so I'm no spring chicken but I'm also not thinking about retirement or something like that. My kids go to public schools, we dont take exotic vacations, its usually a nice week or 2 at the beach. I shop at the salvation army when it suits me. And I take my kids there when we donate our old stuff. We love yard sales, craigslist, and hand-me-down iPhones. my car is 14 years old. Wife's is 12.

If I bought everything I thought I wanted I'd be broke and in debt up to my eyeballs. If I had to have a handyman, plumber, electrician, etc come repair everything in my home that failed or needed upgrade, I'd be broke. If I had to have my car repaired every time something failed.....well you get the point. Nobody "privileged" me with ability to fix things on my own, I've had to go and take the time to learn and make little mistakes along the way. Nobody "privileged" me with ability to resist buying things I cannot afford, I had to watch others mess up and learn to avoid those mistakes. I've had a goodly amount of grace too, but I also haven't squandered it.

Saving is hard for me too. Because the more you earn, the more your appetite will grow...if you let it. I basically skim a portion for savings before it even hits my checking account. $750 per pay check goes right into long term savings. Dont even see it. You've got to make it automatic. Even if its $50, $100, whatever. Just adjust the slider for your budget.

[Anonymous]

Anonymous wrote:The modern redefining of luxuries as necessities makes it hard to see that saving is doable for many people who claim that they can’t save a dime (while typing away on their smartphones).

Bingo. You can get a really low cost pre-paid cell phone to use.

I dumped my cable TV and saved well over a grand a year, and thats AFTER signing up for a streaming service! Which itself is still a luxury.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

I didn't read through the whole thread because after a few pages I see you are getting alot of shade and shaming on this. Just want to say I agree with you. These people do not know what its like to be poor or live on a razors edge. Its very self righteous of them. Yes, there are people who are poor and make bad financial decisions. And yes, they could cut out some luxuries for sure. But cutting out a starbucks a couple times a week is not going to give you 6 months of living expenses. Get a grip people! Also, when you are that on the edge, you are often one step away from crisis and any savings you have get eaten up on a regular basis. ie. you manage to scrimp together $1000 in savings. Yay. Then you have a medical problem and need some testing done that's only partially covered by your insurance, your car breaks down or needs regular maintenance, etc. etc.

I agree with you. Privileged people can be completely tone deaf and simply have no frame of reference to understand. Not everyone can just go get a loan to cover their expenses like our supreme dumbass commerce secretary Wilbur Ross suggests

This sort of thinking right here is why people can't build emergency funds. No, cutting out Starbucks won't give you 6 months of emergency savings overnight, but keep doing it and it sure will. And you know what happens when you start consciously thinking about every $1-$2 expense like Starbucks? You end up cutting other little things here and there. And then over time, you have savings.

And then you have a medical emergency that cuts out that savings and guess what, you start over! You do the same thing you did before to scrimp that $1000 together until you need $1000 for the next emergency. But you don't never try to save to begin with because you might have that emergency one day that will use up the savings.

1000x this.

No. You clearly have no understanding of what it means to be low income. It's not about Starbucks.

Can we at least agree that people tight on cash shouldn’t buy Starbucks? Or they “deserve” it? I’m honestly curious. We have a high HHI and I think Starbucks (and other yuppy type coffee places) are outrageously priced and I ONLY go if a friend expressly invites me to meet there. And I order a “tall” regular coffee and still internally roll my eyes at the ridiculousness of the place.

No, because your premise is wrong. Poverty is not due to Starbucks expenditures.

I think Starbucks is a symbiolic example. Poor people are and remain low income through poor decision making. I know/knew several Asian families who came here with only a few thousand dollars not understanding English etc. They worked constantly, saved every penny not matter what it was. 20 years later they all own multiple properties, drive luxury cars, own large houses in prestigious suburbs.

Again, people are not becoming or remaining poor because they buy Starbucks.

I think you are confusing Millenial poor with actual poor.

[Anonymous]

Anonymous wrote:Only 2 percent of those who follow these three rules are in poverty:

1) Finish high school (at a minimum)

born in a neighborhood with terrible schools and all classmates likewise affected by generational poverty/racism, and no good teachers teach at the school

2) Get a full-time job

full-time job pays poverty wages

3) No marriage or children before age 21

no health insurance to pay for long-acting birth control and highly restricted access to abortion makes this one hard

https://www.brookings.edu/opinions/three-simple-rules-poor-teens-should-follow-to-join-the-middle-class/

[Anonymous]

Anonymous wrote:Saving is hard for people on a low income. Saving should not be hard for people who are making a high income but are living beyond their means. I understand this as a persone who at one time in my life had very low income and now has a good income.

Exactly, yet this basic mathematical fact seems to elude people. They REALLY want to believe it's just a matter of too many lattes for the lower quintile.

When you're poor, your choices are basically decrease expenses significantly -- not always possible; or earn more -- also not always possible.

To make people less poor, we can A) decrease their expenses (lower housing, transportation, and childcare); and B) increase wages through unionization, living wage legislation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Saving is hard for people on a low income. Saving should not be hard for people who are making a high income but are living beyond their means. I understand this as a persone who at one time in my life had very low income and now has a good income.

Look, part of it is numbers and part is attitude. Tom Wolfe, in Bonfire of the Vanities, has an extensive paragraph where the main character goes into how he earned $980,000 last year, and yet still spent more than $980,000. And how essential it all was, and how he couldn't possibly cut back on anything.

It relative, you have to live within your means to save money. You can make $40K a year or 200K a year and be broke or OK in either situation.

I am a federal employee, I earn about $160K per year, and its for a family of five. We live in a decent house that I just finished paying off. I dumped some savings and lump-summed the last of the loan. I'm 40 years old, so I'm no spring chicken but I'm also not thinking about retirement or something like that. My kids go to public schools, we dont take exotic vacations, its usually a nice week or 2 at the beach. I shop at the salvation army when it suits me. And I take my kids there when we donate our old stuff. We love yard sales, craigslist, and hand-me-down iPhones. my car is 14 years old. Wife's is 12.

If I bought everything I thought I wanted I'd be broke and in debt up to my eyeballs. If I had to have a handyman, plumber, electrician, etc come repair everything in my home that failed or needed upgrade, I'd be broke. If I had to have my car repaired every time something failed.....well you get the point. Nobody "privileged" me with ability to fix things on my own, I've had to go and take the time to learn and make little mistakes along the way. Nobody "privileged" me with ability to resist buying things I cannot afford, I had to watch others mess up and learn to avoid those mistakes. I've had a goodly amount of grace too, but I also haven't squandered it.

Saving is hard for me too. Because the more you earn, the more your appetite will grow...if you let it. I basically skim a portion for savings before it even hits my checking account. $750 per pay check goes right into long term savings. Dont even see it. You've got to make it automatic. Even if its $50, $100, whatever. Just adjust the slider for your budget.

I really like your thoughtful response and feel it’s terrific advice for many people. But, the OP likely considers $160k to be priveledged. Let’s say you earned $80k instead for your family of five. It would be much more difficult to save $750/each month. And that is the point. The more you make, the easier it is to save. And those who are higher earners don’t see that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Saving is hard for people on a low income. Saving should not be hard for people who are making a high income but are living beyond their means. I understand this as a persone who at one time in my life had very low income and now has a good income.

Look, part of it is numbers and part is attitude. Tom Wolfe, in Bonfire of the Vanities, has an extensive paragraph where the main character goes into how he earned $980,000 last year, and yet still spent more than $980,000. And how essential it all was, and how he couldn't possibly cut back on anything.

It relative, you have to live within your means to save money. You can make $40K a year or 200K a year and be broke or OK in either situation.

I am a federal employee, I earn about $160K per year, and its for a family of five. We live in a decent house that I just finished paying off. I dumped some savings and lump-summed the last of the loan. I'm 40 years old, so I'm no spring chicken but I'm also not thinking about retirement or something like that. My kids go to public schools, we dont take exotic vacations, its usually a nice week or 2 at the beach. I shop at the salvation army when it suits me. And I take my kids there when we donate our old stuff. We love yard sales, craigslist, and hand-me-down iPhones. my car is 14 years old. Wife's is 12.

If I bought everything I thought I wanted I'd be broke and in debt up to my eyeballs. If I had to have a handyman, plumber, electrician, etc come repair everything in my home that failed or needed upgrade, I'd be broke. If I had to have my car repaired every time something failed.....well you get the point. Nobody "privileged" me with ability to fix things on my own, I've had to go and take the time to learn and make little mistakes along the way. Nobody "privileged" me with ability to resist buying things I cannot afford, I had to watch others mess up and learn to avoid those mistakes. I've had a goodly amount of grace too, but I also haven't squandered it.

Saving is hard for me too. Because the more you earn, the more your appetite will grow...if you let it. I basically skim a portion for savings before it even hits my checking account. $750 per pay check goes right into long term savings. Dont even see it. You've got to make it automatic. Even if its $50, $100, whatever. Just adjust the slider for your budget.

I really like your thoughtful response and feel it’s terrific advice for many people. But, the OP likely considers $160k to be priveledged. Let’s say you earned $80k instead for your family of five. It would be much more difficult to save $750/each month. And that is the point. The more you make, the easier it is to save. And those who are higher earners don’t see that.

"just adjust the slider" is basically "let them eat cake." poor people's SLIDER IS AT ZERO. That's the point.

I don't want to be totally dismissive of the idea of encouraging savings among the poor, because I do think that at least building up $500 is going to mean that some people don't have to get payday loans. But that's FIVE HUNDRED DOLLARS ONLY, and likely quite hard for the average minimum wage worker to put away, and erased in a day when something bad happens. But to act like "just adjust the slider" is going to get the poor into the middle class is just ... dumb and yes, privileged.

[Anonymous]

To assume that cutting back on Starbucks and iPhones is the answer is willful ignorance. Is Starbucks expensive and overpriced for what it is? Yes, but the costs don't even come close to the real expenses people have - rent/housing, health care, child care, etc.

And even to say "oh just finish high school and get a better job" - that's a privileged response. There are kids who have to stop going to high school and get jobs to help keep food on the table for themselves and their siblings.