> A week ago, he said he had “a good middle-class job” which paid him $35.50 an hour plus health care and retirement benefits. Now he is struggling to figure out how he’ll pay a $300 electric bill and $1,000 in rent for his townhouse. He also lost his health insurance.
You make $35.5/hour in (I suppose?) a stable job but if the work stops for a week, you struggle with a $300 bill? I know some people are living paycheck to paycheck but starting from a certain income you should build a safety net. What about your IRA? What about your credit score? What about small investments?
Looks like some people are living $ to $ without leaving any money aside. This might be what is going to make this even harder for the economy.
I went to my local 7-11 a couple of weeks ago to get some cash at the ATM. Next to it was a garbage bin for throwing away your receipt.
Out of curiosity, I went through about a dozen and not a single one had a balance above $1,000. Most were below $500.
There is little financial literacy in this country. Basic lessons about opening a bank account, the difference between checkings and savings, etc. is not something that is taught in K-12 nor in College. Let alone more "advanced" topics like 401Ks and IRAs and investing in the stock market.
> There is little financial literacy in this country.
Well, technically if you're drawing cash, you should be drawing it from your checking account and if you're saving it should be in a savings account, so your checking account balance should be relatively low.
There's plenty of people with multiple bank accounts, one of which just has a few hundred bucks in checking, and then near the end of a month they pull from an online savings (that has higher APY) into their main account as required. That's just one example of many tricks employed.
This comment is a tad ironic. My monthly expenses are $N, and I keep at most $N + 1,000 in my checking account. Often much less e.g during the first half of the month. I keep my checking account balance as low as possible precisely because I know "the difference between checkings and [high-yield] savings". Keeping more than a small buffer extra in your checking account seems pretty financially illiterate to me.
Also, keeping anything more than absolutely necessary in a checking account is ridiculously dangerous if you're using ATMs outside gas stations....
That's a pretty biased sample. Most people with financial literacy aren't withdrawing cash at a 7/11. They're doing it at their own bank branch to avoid paying any fees.
The reasoning here is circular. At the ATM in 7/11 that would only be used by people who aren't financially literate enough to absorb excessive fees, we find evidence of poor finances and poor financial literacy.
This is exactly right. The economy has grown to unsustainable levels based on the economic habits of the average American who can't be bothered to save, hence the crash we're seeing now. At sixty hours a week, that guy should be making six figures, pre-tax. There is zero excuse for not saving. Everyone should save at least six months of salary for emergencies; though a few people legitimately can't, most Americans simply don't bother because they'd rather spend that money on the new i phone.
Edit: Williamdclt, I'll answer your question here due to rate-limiting.
Yes, lots of us do; I've been working that way since internships in high school. Same with many others I know. Usually, though, it's close to 12 hours a day and none on Saturday, or maybe 11 a day and a little on the weekend. Not an issue so long as you plan about an hour a day for something fun and mindless, and leave weekends free to do chores/relax.
Edit: Consz, responding here due to rate-limiting.
Not all of us live in the same world. I'm glad to hear you and your friends are doing well, but that's not representative of everyone. I do because I'm currently hourly, and that's true of many of the people I mentioned. When every additional hour worked has more money associated with it, most people will work more; that's not silly. The downside is, of course, there's a distinct opportunity cost to taking time off, so I don't do so much of that.
I'm British, but used to work with a lot of Americans, all white-collar workers in the oil and gas industry, across a few different companies.
It seemed to me that the US has a toxic overtime culture, where your perceived value to the company was based in large part by how much time you were at your desk. And of course, you didn't get paid for that overtime. I don't think I met a single person who worked less than 50+ hours a week, every week.
I did ask about this, and was always told it was "normal".
Also, and I might be remembering this wrongly, I think employees only got ten days annual leave.
This was all in a single industry, in a single state, so I don't know how well the observation extrapolates, but it was my perception at the time.
Not all, no, but a good few do (I'm sure this varies by industry, region, etc.) Ambitious people tend to do so more than others; there are only so many promotions/pay raises/etc. to go around and I'd rather I get it than one of my co-workers, so it becomes a bit of a positional arms race.
This is silly. My professional cohort doesn't have anyone working sixty hour weeks, and these are people making mid-6 to mid-7 figures. Lot more to life than working, buddy.
Well here's the thing about that, people were actively incentivized not to save cash with low interest rates and a booming stock market. I know for myself personally I'm heavily invested in the markets just because that's what worked best for almost a decade. Nobody saw this coming.
Now you have to debate selling your stock at such low prices and realizes huge loses or paying your bills - I think most people are going to try to hold out for unemployment/use credit before they do that.
yeah, not great, but the same thing has happened to many businesses. When they stop making money they can't meet their obligations (e.g. wages) and need a bailout a week later.
You make $35.5/hour in (I suppose?) a stable job but if the work stops for a week, you struggle with a $300 bill? I know some people are living paycheck to paycheck but starting from a certain income you should build a safety net. What about your IRA? What about your credit score? What about small investments?
Looks like some people are living $ to $ without leaving any money aside. This might be what is going to make this even harder for the economy.