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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.

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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.

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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:

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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.

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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).