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Living paycheck to paycheck is getting harder

http://news.yahoo.com/s/ap/20071019/...UmbSAAEEWs0NUE

Quote:

NEW YORK - The calculus of living paycheck to paycheck in America is getting harder. What used to last four days might last half that long now. Pay the gas bill, but skip breakfast. Eat less for lunch so the kids can have a healthy dinner.
Across the nation, Americans are increasingly unable to stretch their dollars to the next payday as they juggle higher rent, food and energy bills. It's starting to affect middle-income working families as well as the poor, and has reached the point of affecting day-to-day calculations of merchants like Wal-Mart Stores Inc., 7-Eleven Inc. and Family Dollar Stores Inc.
Food pantries, which distribute foodstuffs to the needy, are reporting severe shortages and reduced government funding at the very time that they are seeing a surge of new people seeking their help.
While economists debate whether the country is headed for a recession, some say the financial stress is already the worst since the last downturn at the start of this decade.
From Family Dollar to Wal-Mart, merchants have adjusted their product mix and pricing accordingly. Sales data show a marked and more prolonged drop in spending in the days before shoppers get their paychecks, when they buy only the barest essentials before splurging around payday.
"It's pretty pronounced," said Kiley Rawlins, a spokeswoman at Family Dollar. "It seems like to us, customers are running out of food products, paper towels sooner in the month."
Wal-Mart, the world's largest retailer, said the imbalance in spending before and after payday in July was the biggest it has ever seen, though the drop-off wasn't as steep in August.
And 7-Eleven says its grocery sales have jumped 12-13 percent over the past year, compared with only slight increases for non-necessities like gloves and toys. Shoppers can't afford to load up at the supermarket and are going to the most convenient places to buy emergency food items like milk and eggs.
"It even costs more to get the basics like soap and laundry detergent," said Michelle Grassia, who lives with her husband and three teenage children in the Bedford-Stuyvesant section of Brooklyn, N.Y.
Her husband's check from his job at a grocery store used to last four days. "Now, it lasts only two," she said.
To make up the difference, Grassia buys one gallon of milk a week instead of three. She sometimes skips breakfast and lunch to make sure there's enough food for her children. She cooks with a hot plate because gas is too expensive. And she depends more than ever on the bags of free vegetables and powdered milk from a local food pantry.
Grassia's story is neither new nor unique. With the fastest-rising food and energy prices since the 1980s, low-income consumers are stretching their budgets by eating cheap foods like peanut butter and pasta.
Industry analysts and some economists fear the strain will get worse as people are hit with higher home heating bills this winter and mortgage rates go up.
It's bad enough already for 85-year-old Dominica Hoffman.
She gets $1,400 a month in pension and Social Security from her days in the garment industry. After paying $500 in rent on an apartment in Pennsauken, N.J., and shelling out money for food, gas and other expenses, she's broke by the end of the month. She's had to cut fruits and vegetables from her grocery order — and that's even with financial help from her children.
"Everything is up," she said.
Many consumers, particularly those making less than $30,000 a year, are cutting spending on nutritious food like milk and vegetables, and analysts fear they're further skimping on basic medical care and other critical services.

Coupon-clipping just isn't enough.
"The reality of hunger is right here," said the Rev. Melony Samuels, director of The BedStuy Campaign against Hunger, a church-affiliated food pantry in Brooklyn.
The pantry scrambled to feed 5,000 new families over the past 12 months, up almost 70 percent from 3,000 the year before.
"I am shocked to see such numbers," Samuels said, "and I am really concerned that this is just the beginning of what we are going to see."
In the past three months, Samuels has seen more clients in higher-paying jobs — the $35,000 range — line up for food.
The Regional Food Bank of Northeastern New York, which covers 23 counties in New York State, cited a 30 percent rise in visitors in the first nine months of this year, compared with 2006.
Maureen Schnellmann, senior director of food and nutrition programs at the American Red Cross Food Pantry in Boston, reported a 30 percent increase from January through August over last year.
Until a few months ago, Dellria Seales, a home care assistant, was just getting by living with her daughter, a hairdresser, and two grandchildren in a one-bedroom apartment for $750 a month. But a knee injury in January forced her to quit her job, leaving her at the mercy of Samuels' pantry because most of her daughter's $1,200 a month income goes to rent, energy and food costs.
"I need it. Without it, we wouldn't survive," Seales said as she picked up carrots and bananas.
John Vogel, a professor at Dartmouth College's Tuck School of Business, worries that the squeeze will lead to a less nutritious diet and inadequate medical or child care.
In the meantime, rising costs show no signs of abating.
Gas prices hit a record nationwide average of $3.23 per gallon in late May before receding a little, though prices are expected to soar again later this year. Food costs have increased 4.5 percent over the past 12 months, partly because of higher fuel costs. Egg prices were 44 percent higher, while milk was up 21.3 percent over the past 12 months to nearly $4 a gallon, according to the Bureau of Labor Statistics.
The average family of four is spending anywhere from $7 to $10 extra a week — $40 more a month — on groceries alone, compared to a year ago, according to retail consultant Burt Flickinger III.
And while overall wage growth is a solid 4.1 percent over the past 12 months, economists say the increases are mostly for the top earners.
Retailers started noticing the strain in late spring and early summer as they were monitoring the spending around the paycheck cycle.
Wal-Mart and Family Dollar key on the first week of the month, when government checks like Social Security and public assistance generally hit consumers' mailboxes.
7-Eleven, whose customers are more diverse, looks at paycheck cycles in specific markets dominated by a major employer, such as General Motors in Detroit, to discern trends in shopping.
To economize, shoppers are going for less expensive food.
"They're buying more peanut butter and pasta. And they're going for hamburger meat," Flickinger, the retail consultant, said. "They're trying to outsmart the store by looking for deep discounts at the end of the month."
He said the last time he saw this was 2000-2001, when the dot-com bubble burst and the economy went into a recession after massive layoffs.
For now, low-price retailers are readjusting their merchandising and pricing.
Wal-Mart is becoming more aggressive on discounting. It announced Thursday it is expanding price cuts to 15,000 items, ranging from Motts apple juice and Progresso soups to women's fleece tops, heading into the holidays.
Family Dollar, whose food offerings were limited to candy and snacks until two years ago, has expanded its mix of groceries like fruit cups, cereal and such refrigerated items as milk and ice cream while cutting back on shoes. This summer the chain began accepting food stamps.
Food pantries are also getting creative. Samuels said her church, Full Gospel Tabernacle of Faith, just started offering free cooking classes to teach clients who are diabetic or have other health conditions how to prepare vegetables like squash. It's also offering free exercise classes. "We are trying to make them health conscious," Samuels said. "It's not right to give them just anything. Our mantra is eat well and live well."

I know with me personally.... I'm single and not making it at all on my above minimum wage job... I live in NY and I shop smart, and don't go shopping for frivolous things... It is so frustrating, i can't imagine having kids or a family!

It's good that it's getting harder. People who didn't need to live paycheck to paycheck were doing so and getting really comfortable in that. Then they had the nerve to present their material possessions as some sign of social class or "wealth." Sure, you have a nice car and new clothes, but you only have $500 in the savings account. Not a good safety net in case something happens. And don't dare have the nerve to get social services. The social services should've been you trading in that car and not buying those nice new clothes. People are spending on borrowed money and spending before they even get their paychecks. This consumerism has been feeding capitalism for decades.

Being poor sucks whether you're an underemployed adult or a student. Take some time to learn about investment opportunities or anything that can make your money work for you. This doesn't mean that everyone will be successful in getting out of poor status. 90% of people won't. But it means that the people with access to the info can learn and see what the outcome is.

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Originally Posted by DSTCHAOS (Post 1540299)

To what DSTCHAOS just said....

This gets me to thinking about one of my s.o.'s co workers who just bought a house for about 400K...got upgrades which pushed the price to 700K

Then......

After moving in, she obtained a 4K plasma TV a 1K LCD for her daughter and a 2K TV for the master bedroom.

**I say 'obtained' because she is still paying for these items...*

She got a new car with all the amenites including OnStar or whatever it is that people use to get in-car help

She also has a Denon sounsystem which ran upwards to 800 bux and subwoofer which was at least 300....called me to drive a 1/2 down there to hook it all up.

Meantime, she has 3 kids (her husband and thier 2 children), can't cook....

and already has creditors coming after her.

Part of the issue with people living check to check is that no one really saves money. People spend beyond thier means when they don't have to.

I have gotten to a point within the past few years that I am being more consious of what I am saving vs spending and if I don't need it, I can skip it.

Even lunches during the course of the workday....you save more by sometimes making your own meals and taking to work with you vs spending 5 or 10 bucks for a less than satisfying lunch.

You can do more with less especially if you put some of it away.

Anyone here got retirement plans?

I don't have a retirement plan yet.

Everyone should learn about investments. That goes for people making 25K to people making 250K. Both income and tax brackets can end up broke if they don't invest and work toward accumulating (and eventually being able to pass down) wealth.

I'm never impressed by people's material possessions because these things deppreciate and typically don't mean anything other than someone has a credit card. I knew a dude who had a huuuuuge plasma TV in a crappy economy size apartment. People are so eager to impress and the ability to impress fuels their crappy self esteem.

Quote:

Originally Posted by DSTCHAOS (Post 1540299)

ya know, to a certain degree, you are right. However, like daemonseid said, i try to take my lunch to work, don't make unncessary purchases... etc. but its just not enough, i can't even put 50 dollars into a savings account each month. I would love to save or have an investment strategy, but i just can't.
I did have a second job, as a waitress, the restaurant closed b/c they didn't have enough money to make it through the slow summer season. I currently have a few more job prospects, but there really is nothing, and i've gone to places, craigslist, the paper, etc...
It's just not working right now. Luckily, I have an education and plan on continuing it, I feel terrible for those that don't or can't.

Quote:

Originally Posted by AlethiaSi (Post 1540324)

My post was about the consumer economy and those who are content with being broke and flashy. You're obviously not one of those people.

And never say "can't." That is defeatist. Like you said you have an education so there is always light at the end of the tunnel. Until you fully see that light, continue to put away a few dollars every month. You probably don't have health insurance and have not begun investing some money because you have low bank account balances and so forth. The turn around will be slow but small changes lead to big things. That's what my 2nd paragraph was about.

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Originally Posted by DSTCHAOS (Post 1540325)

true, i guess i get defensive b/c I am going through such a hard time right now. thanks for the advice :o

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Originally Posted by AlethiaSi (Post 1540334)

true, i guess i get defensive b/c I am going through such a hard time right now. thanks for the advice :o

ditto to what DSTCHAOS said...

insurances are going up and the general populace is going broke because of it but you get it because you need it...a nice portion of my money is going to my retirement fund...and one startagey for me is when I get paid....pay all my bills first...then put a nice amount into my saving and then what I got left is "play" money and even then I pinch because I haven't a need to be flashy....

You know what else slays me....people who have to tell me how much they spent on something and then in the same breath have the nerve to ask for a 'small loan'.

I remember a few years back, an associate of mine got a hummer..whupde flippin' doooo.. offered me and a few of our friends a ride and then had the nerve to ask everyone to contribute for gas.

On another point....

A friend of mine every other year comes up with these business schemes

One year it was an independent IT thing similar to Geek Squad

Another year it was a mentoring program

This year it was bus trips to Atlantic City....problem is, with all these ideas, he wants to go grandiose with them. For instance with the bus trip idea, he wanted to get high end buses with DirecTV and DVD players and so forth and try to do 1 trip every 2 months. he wanted me to find a DJ (for what?) and get bus catering.

The sad part is that he probably could make some money on the side from some of these ideas but he is just too cheap to invest his money. You can't dream grandiose and be cheap in real life.

The thing of it is...we may be all living from check to check but we also have to know when you decide to step out a little bit, you can't be cheap about it either...invest only if you plan on putting work into it but also if you are making money back also.

Quote:

Originally Posted by AlethiaSi (Post 1540283)

http://news.yahoo.com/s/ap/20071019/...UmbSAAEEWs0NUE... I live in NY and I shop smart, and don't go shopping for frivolous things... It is so frustrating, i can't imagine having kids or a family!

You live in one of most expensive places in the country, maybe the world.

It's also one of the most exciting places to live.

Maybe, though, if you want to be able to live more comfortably, you might have to consider living somewhere else.

We all have to make some difficult lifestyle decisions sooner or later in our lives.

That's one of the reasons I don't live in New York.

Although I did for a while, and would love to.

Life is good for all of us, ask any of your elected legislatures.

If you are on the above average side as some seem to be here, god forbid that you get sick, lose a job, or ahve any other problems arise.

But if you are not, then, it is easy to live hand to mouth. Guess some are not as privileged as some seem to be on site.:rolleyes:

Quote:

Originally Posted by DeltAlum (Post 1540354)

She doesn't live in the city. She doesn't bear the brunt of the city costs.

I don't understand how anyone can live in the city on less than 100. I'm not counting the outer boroughs or people that still get allowances at 28. I just don't get it. To make it work out you'd live in a dump, in an awful building, really far on the upper east or west, and with a lot of roommates.

-Rudey

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Originally Posted by Tom Earp (Post 1540390)

Whatever this means.

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Originally Posted by DeltAlum

That's one of the reasons I don't live in New York.

I hate N.Y city. Even as a place to visit. Overpriced and overhyped.

Maybe some of the noncity parts are cool. I like being able to go down the street without it being a big production.

Quote:

Originally Posted by eli_the_chopper (Post 1540396)

Sorry for the rant, but saying things like you need to save your money and you wont get into these sorts of situations is very misleading.

No, it isn't because we also said to look for investment and wealth building opportunities.

As adults, we should already know about inflation and the inner workings of capitalism. But discussing that without discussing the consumer economy is ignoring what economists, politicians, and social scientists have been examining even before FDR's New Deal and through the economic shifts of the 80s and 90s.

Inflation happens so deal with it. You won't change how the capitalist economy operates immediately but you can alter how you operate within it with hopes for a better outcome. Either advocate self-empowerment or advocate an increase in the welfare state and state dependents. But I don't want my tax paying money to go to people who really don't need it as much as liberals have told them they do.

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Originally Posted by eli_the_chopper (Post 1540407)

I won't waver on my belief that our economic situation needs MAJOR reform.

Once again, American citizens aren't the ones who will be doing that reforming, at least to the extent that people will see changes as quickly as they want to.

So back to the main point of people making the necessary changes in their lives to adjust. If not for that, there will just be this annoying "system blame" that removes all personal responsibility.

Plus, you have to look at the incentives for reform. These reforms won't be carried through because the average American is working poor and living paycheck to paycheck. That has almost always been the case.

Reforms of the currency standard will only occur if there is a threat to the structure of capitalism and if there is no other solution to the US economic crisis.

So people need not bank on reform and need to bank on learning how this all operates and providing safety nets where the government is falling short (because the government will ALWAYS fall short).

Quote:

Originally Posted by Rudey (Post 1540397)

Thats true, i don't live in the city, but i live right outside of it, and it is less expensive, but it still is very high.

I agree with your second paragraph though, you would really have to live in harlem with about 10 ppl in order to make it. sigh.

Quote:

Originally Posted by eli_the_chopper (Post 1540414)

The first part of your argument is where political apathy comes from. Elections are in a year. There is something you can do.

Perhaps for other people. But if you really read my posts, you won't be interpreting them as apathetic. Keep the words in my posts within their proper context.

I know elections are in a year, thanks. Americans' personal responsibilities don't begin and end with our voting rights. And voting never means the changes you seek will be in place anytime soon. Change is a process.

Quote:

Originally Posted by eli_the_chopper (Post 1540414)

The second part, I completely agree with.

Cool.

ok...so since we all agree....somebody loan me 10 bux til friday.....

I'm still voting Republican.

A Democrat doing the things many of you would advocate would simply facilitate America's slide towards socialism. Fortunately, I think there's a very conservative Supreme Court on the bench (and a very young one at that) which will serve as a nasty thorn in the side of whichever liberal president/congress come along next year.

It'll be like the 4 horsemen all over again, but there'll be 5 of them.

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Originally Posted by DaemonSeid (Post 1540425)

ok...so since we all agree....somebody loan me 10 bux til friday.....

What have you done to prevent yourself from needing that loan? :D

Quote:

Originally Posted by Kevin (Post 1540431)

I'm voting for the best candidate. I don't choose the party beforehand.

America will never be socialist or at least it won't be in my lifetime.

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Originally Posted by DSTCHAOS (Post 1540442)

What have you done to prevent yourself from needing that loan? :D

UUUhhhh...I invested some in a brother that was in dire need of food and gas....LOL

you can ummm...paypal or send a check...hehehehehe

Quote:

Originally Posted by AlethiaSi (Post 1540324)

I think we are in the same boat. Luckily, my husband and I both have our graduate degrees and good jobs with insurance, 401K, retirement etc. Even with a *plan* to put money away every month, it is still difficult to save.

I agree with bringing your lunch to work to save money and eating out less. We definitely eat out a LOT less now that gas is so high and try to stretch our weekly groceries as far as possible.

As many others have said, the key to not overextending yourself is avoiding unnecessary purchases and not being so quick to jump on a *sale*.

Quote:

Originally Posted by DSTCHAOS (Post 1540444)

I'm voting for the best candidate. I don't choose the party beforehand.

America will never be socialist or at least it won't be in my lifetime.

Clinton will be the Democratic candidate. That said, it is not hard to find a better candidate. Therefore, I will be voting Republican in the Presidential election.

I may be voting Democrat just about everywhere else. Oklahoma's Republican party has really pissed me off as of late with their obvious pandering to corporate interests, pay to play politics, you know.. the stuff the Clintons are known for.

Quote:

Originally Posted by DaemonSeid (Post 1540450)

UUUhhhh...I invested some in a brother that was in dire need of food and gas....LOL

you can ummm...paypal or send a check...hehehehehe

I'll send you a job application. Now you'll have 4 jobs. :D

I think that sometimes people get confused with what is a necessity and what is a luxury.

A car is a luxury. Starbucks is a luxury. A cell phone and internet are luxuries.

I have friends that are ALWAYS broke. However, whenever they find what they *think* is a deal, they buy it. On credit. And then wonder why they don't have money.

I blame it on rap and MTV.;)

All cars are not luxuries, some are. A brand new $30,000 SUV with leather heated seats= luxury. A $9995 two year old Chevy Aveo with windows you roll down manually and no power locks= necessity. I drive the latter. When I got it, my (then 10) year old son kept ranting about the "Low tech" car... lol. He had never had to roll windows down manually before.

Ok, I've been pretty financially comfortable (while married, two incomes) and have had it get tighter and tighter every year since my divorce. Since the divorce, between insurance, taxes and interest rates, the mortgage payment has gone up $450 a month. My income? It's gone up 2-3% a year.. which doesn't add up to $450 a month. The utilities have gone up, gas for the car has gone up, the cost of my benefits has gone up. I have had to tighten the belt a little more every year. I'm taking home less money each year too, because of the higher cost of the benefits. The longer I work, the less money I make. That makes it tough to stay ahead.

I do have a retirement fund through work, and a very small pension benefit. I'm planning to start investing more next year for my retirement so I can actually retire someday. I've learned all kinds of tricks to save money .. from taking lunch to work every day, to freezing LOTS of food so that I don't throw as much away, to learning all kinds of things that can be made from ground beef/turkey. We never eat out anymore, unless it's the dollar menu at Wendy's or Taco Bell, because I feed the kids cheap then. Oh yeah, and on those days, I generally skip dinner. I shop the sales, buy the generics and buy our clothes at cheap places like the Old Navy outlet and, for my son, Walmart. I can clothe that kid for an entire season for $120 there! The 13 year old girl is more expensive. Both kids are in braces.. luxury? Depends on who you ask. Payments for those are done in January and I'm going to feel rich after two years of payments to the orthodontist. It's definitely NOT easy. Things are changing for us, through difficult circumstances, but my first priority is going to be to eliminate debt, second priority, save money. I am actually going to do what they recommend and have 6 months salary in savings. It is a big relief.

I have co-workers who make a lot more than me and who have husbands who have make twice as much as me, so they are making more than three times my salary. They complain about being broke. I sit at lunch and listen to them talk about how broke they are while they're living in huge houses with new vehicles and wear all designer clothes. Sometimes I want to go off on them. One of them even gets all ticked off when we get our annual bonus (usually around $350 after taxes) because "they give us so little, they might as well keep it". I have told her that I'll take hers if she doesn't want it! That's' a lot of money to me!!!

Reality is, we, as a society, spend what we make. I'm not going to be one of those people anymore and I'm so glad.

Quote:

Originally Posted by AGDee (Post 1540514)

Reality is, we, as a society, spend what we make. I'm not going to be one of those people anymore and I'm so glad.

True that! I college, $20 and bar specials would last me all week. Now...$20 might buy a drink or two at the first stop of the night.

If it wasn't for the tax benefits...I really don't even know if I would save for retirement. I plan on working for the rest of my life. I know I would get bored as hell doing nothing. I do like the idea of mini-retirements. Working for a few months, and then taking a few months off to do my own thing.

Sometimes I think my retirement will be a retirement from my career, but not from working. There are lots of littler, less stressful jobs I'd like to do someday. However, I do suggest planning for retirement anyway because your health may not allow you to keep working.

Hello old thread. I really enjoyed reading through this one. And, Chaos, I'm with you 100%.

AGDee, in response to what you said about your coworkers, I too have coworkers that spend FAR beyond their means and they make quite a bit more than I do (my income and my husband's combined). I offer free budget and planning advice to friends and family and some of my coworkers have taken me up on the offer. When it comes to creating a useable budget, I have to know first off 1) what isn't negotiable (i.e. the needs), 2) how much are you really spending and 3) what are your goals? In most cases, the goal is to pay down debt. Great goal.

So, before I get into the work of coaching them on how to structure their spending on a weekly/biweekly/monthly basis, I tell them that more often than not, people have to sacrifice in some areas to free up enough money for others. They say, yeah, I can do that. After the hours it takes me to work out the preliminary budget (my approach has multiple phases and I follow people for as long as they need - one friend still reports to me after two years), the negotiating begins. "I can't cut here because we NEED [insert ridiculous frivolity]." Are you kidding me? Let's look up the definition of sacrifice, shall we?

Meanwhile, here I am, debating on whether or not to buy a new used car while the market is ripe for this type of purchase. To be completely honest, I can afford a new car - heck, I can afford to new cars. And, people pester me about it. "If you can afford it, why not get it?" Because you don't just purchase because you can or because something's on sale.

I have to weigh the pros and cons - cons, which are most frightening, being such things as a dramatic increase in the $50 or so I pay in insurance for TWO cars quarterly (mind you, both of our cars are 12, going on 13, years old and mine currently has 260,000 miles on it). I'm still considering it. But, you know, I'm living comfortably. I'm content with what I have because I'm not defined by it. No one and nothing can make me happy. It's an overall mentality that is, ideally, separate from my circumstances.

I think I needed to get that out. I feel relieved. :D

Well, I am of the scientific law of thermodynamics, the value of money is not created or destroyed, it just changes from one hand to another...

Now, I am one of those currently unemployed, by choice--a fundamental difference of opinion with my boss. At any rate, my husband and I saved a lot of money from oil investments... We did remove much of the money for some houses projects we wanted to do.

Anyhow, the reality is, the economy is resetting value again. It does that ever 10-15 years. The last recession we had was in 1991. I lived through that one, I can live through this one, coming... Our foodstuffs will be re-aligned, too. Bread products and dairy will increase costs immensely.

The reality is to plan how to make to 2009.

The other issue is many baby boomers are retiring and will squelch social security, period--especially medicaid. And even if they the Feds redo it or declare a state of emergency, which is highly likely, it still won't make a difference from the boomer's increased healthcare costs.

People will die.

Children who are the least able will die, too. Moreover, there aren't enough people under 55 in this country who will be able to work.

And terrorism is real... Would you like eggplants and zucchini with your taxi drivers? ;) (Hoodland Psychiatry--I mean Homeland Security--don't burn my house)

Have you ever looked back at a thread you posted in months ago and thought "geesh...I sure did post too darn much!"

Oh and I love eggplants and zucchini.

Quote:

Originally Posted by DSTCHAOS (Post 1577003)

Have you ever looked back at a thread you posted in months ago and thought "geesh...I sure did post too darn much!"

Oh and I love eggplants and zucchini.

Let's meet in the VividRoom and discuss this...