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Living paycheck to paycheck

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When you hear the term "paycheck to paycheck" you probably think of low-income households struggling to make ends meet. That's even the title of a new HBO documentary highlighting the plight of America's working poor. But a new paper released at the Brookings Institution's BPEA conference Friday finds that a sizeable number of wealthy households are living paycheck to paycheck, too.

"The Wealthy Hand-to-Mouth," by economists at Princeton and New York University, finds that roughly one-third of American households -- 38 million of them -- are living a paycheck-to-paycheck existence. These are families who hold little to no liquid wealth from cash, savings or checking accounts. But a staggering two-thirds of these households are not actually poor; while they resemble poor families in their lack of liquid wealth, they own substantial holdings ($50,000, on average) in illiquid assets. Because this money is locked up in things like their houses, cars and retirement accounts, they can't easily dip into it when times get tough.

Demographically speaking, the wealthy hand-to-mouth are older, more educated and have substantially higher incomes than their poor counterparts. Perhaps the most striking difference is that while the poor hand-to-mouth tend to stay that way for long periods of time, wealthy-hand-to-mouth status is transient, lasting an average of only 2½ years.

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But how do you get ahead if you're living paycheck to paycheck? The fact is, no matter how much you earn you could be creating your own barriers to financial success without even knowing it. Here are ten things you might be doing that are preventing you from achieving prosperity. Change your ways and you could find yourself well on the way down the road to riches.

http://finance.yahoo.com/news/10-reasons-youll-never-rich-050001764.html

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If you choose to live below your means you'll end up actually able to retire someday (pretty big incentive I'd say).

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Just to add, investing in companies you think may have a future can be a very good idea as well (even with the bear economy). I got in on Apple and Intel way, way, way back...bought myself a house and paid for my kid's college.

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This is actually not a surprise...the more you make, the more you spend.

I know people with much lower incomes than you would think but they are very frugal with what they spend it on...and I know some folks you would think were poor as church mice and they actually make pretty good salaries...but they p!ss it away as fast as they make it.

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This is actually not a surprise...the more you make, the more you spend.

I know people with much lower incomes than you would think but they are very frugal with what they spend it on...and I know some folks you would think were poor as church mice and they actually make pretty good salaries...but they p!ss it away as fast as they make it.

That is, in part, responsible for the lack of equilibrium between the middle class and the rich: if you spend all you get nowhere.

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Heck, I live basically paycheck to paycheck and I'm basically at the 75th percentile on income. I do save for retirement in a 401K, but everything else gets spent. With 2 kids there is always a need for clothes, food, transportation, entertainment, schooling, and other expenses. All that happens when you make more is that the crap you buy is slightly better quality, and slightly healthier for you.

If I lost my job, I'd loose my house pretty quick, and we'd be in a world of hurt. But isn't that true of just about everyone that actually works? Who has a mattress full of cash anymore? Who piles up cash for anything anymore? Very few. Most use credit to get whatever it is immediately and then budgets to pay down on the credit card. Which doesn't always happen, leading to lots of individuals with high debt.

It would be much better if people only bought what they had cash for, but that just isn't going to be happening anymore, at least not by the average consumer.

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i live paycheck to paycheck, but admit i could cut back on a few things and save a bit of money

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Many things these days are "necessities" that were not before. Cell phone, cable television, high speed Internet, data plans. All these things were luxuries not that long ago but now it seems people can't do without them. Between my wife and I cell phones, data plans etc it can seriously push close to $1,000 a month.

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I live paycheque to paycheque. I don't have internet, I use free wifi, no cable either. We do have cell phones so I know where my daughter is, but no landline. Between rent, truck payment, food, car insurance...we have no money for frivolities. No going to movies, no new clothes, nothing extra and I am always behind in paying my electric bill. So, moving for a better paying job is uppermost in my future.

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I generally don't mind what people do with their money, until they start asking me for money. Then I get irritated with their idiotic spending.

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Talk about first world problems! "I'm living paycheck to paycheck because I have all this stuff"

It's called living beyond your means no matter how you slice it

it is only a "necessity" if you can't live without it period.

take a class on home economics some communities put them on for free and evidently it isn't just needed for the poor.

shop at thrift stores. my kids wear name brand that my wife bought with the tags still on.

AND for goodness sake teach your kids some money sense because the are not going to learn it in school from a government 17 trillion in debt.

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As an old family friend said, "It's not the high cost of living, it's the cost of living high."

My parents were professional musicians, and so both earned modest salaries. In the early 1960s they bought a house with a 25 year loan. Dad was the music teacher at a local high school, and got into quite an argument with the economics teacher there. The economics teacher said it was better to delay paying off the loan as long as possible in order to let inflation devalue the loan, but Dad preferred to repay the loan as quickly as he could afford. As a result the loan was paid off in under 15 years, a technique which I understand was rarely used in those days. (Part of the reason was that Dad wanted the loan paid off before he retired.) It meant that we didn't have many luxuries growing up, and a lot of my clothes were hand-me-downs from my older brothers. But in general it meant that my siblings and I grew up comfortable with the idea of delayed gratification - if we wanted something we waited until we could afford it, rather than getting a personal loan or using a credit card.

Something which helped me when I took out my first home loan was simply playing around with the maths of my home loan repayments on a spreadsheet. That way I found out simple things like the total amount of money I'd repay compared to the size of the loan, how repaying even a tiny extra amount early in the loan could cut years off the loan repayment time, and how maintaining repayments even when interest rates drop can also have a big impact in paying the loan off sooner.

I know many people feel uncomfortable when playing around with maths, but this sort of maths knowledge is potentially very valuable.

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I got into debt with credit cards but somehow had nothing to show for it.Long story. Doing better .I save money from the part time job and put it away for property taxes. Trying to save money to fix up the house some in small stages. However they only schedule me two days,Sat.and Sunday to work cause sales are supposedly down so they cut every body's hours.At least the part timers.

I would like to get the internet so maybe i could start some sort of business,.Cell phone only for emergencies like if I ever need to call AAA for the car or call the garage to schedule an oil change or whatever.Cutting eating out cause I'm dieabetic and of course got to feed the pets.

These wealthy people however can sell assests that i don't have for more money. No wonder some of these people run around with a lot of gold jewelry and the like.At least you can sell the gold and always have some sort of source for cash if you need it.

Doesn't help that wages aren't going up but everything else is.

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I got into debt with credit cards but somehow had nothing to show for it.Long story. Doing better .I save money from the part time job and put it away for property taxes. Trying to save money to fix up the house some in small stages. However they only schedule me two days,Sat.and Sunday to work cause sales are supposedly down so they cut every body's hours.At least the part timers.

I would like to get the internet so maybe i could start some sort of business,.Cell phone only for emergencies like if I ever need to call AAA for the car or call the garage to schedule an oil change or whatever.Cutting eating out cause I'm dieabetic and of course got to feed the pets.

These wealthy people however can sell assests that i don't have for more money. No wonder some of these people run around with a lot of gold jewelry and the like.At least you can sell the gold and always have some sort of source for cash if you need it.

Doesn't help that wages aren't going up but everything else is.

Keep chugging away. Look for another part time job. Keeping yourself busy working has another positive effect. You are at work more. Less options to spend money.

Do you have an extra room that you can rent out. That's good income if you can do it.

I'm also diabetic. It's tough to eat cheap on a diabetic diet. It can be done though. It just takes allot of willpower.

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I know many people feel uncomfortable when playing around with maths, but this sort of maths knowledge is potentially very valuable.

I feel that is a very big weakness in America today. People think math is stupid, and they don't value knowledge of it. They depend too much on what they are told and what their MS Money program tells them.

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As an old family friend said, "It's not the high cost of living, it's the cost of living high."

My parents were professional musicians, and so both earned modest salaries. In the early 1960s they bought a house with a 25 year loan. Dad was the music teacher at a local high school, and got into quite an argument with the economics teacher there. The economics teacher said it was better to delay paying off the loan as long as possible in order to let inflation devalue the loan, but Dad preferred to repay the loan as quickly as he could afford. As a result the loan was paid off in under 15 years, a technique which I understand was rarely used in those days. (Part of the reason was that Dad wanted the loan paid off before he retired.) It meant that we didn't have many luxuries growing up, and a lot of my clothes were hand-me-downs from my older brothers. But in general it meant that my siblings and I grew up comfortable with the idea of delayed gratification - if we wanted something we waited until we could afford it, rather than getting a personal loan or using a credit card.

Something which helped me when I took out my first home loan was simply playing around with the maths of my home loan repayments on a spreadsheet. That way I found out simple things like the total amount of money I'd repay compared to the size of the loan, how repaying even a tiny extra amount early in the loan could cut years off the loan repayment time, and how maintaining repayments even when interest rates drop can also have a big impact in paying the loan off sooner.

I know many people feel uncomfortable when playing around with maths, but this sort of maths knowledge is potentially very valuable.

A lot of the financial people still tell you to do this saying that if you take the extra money and invest it in the market you will make a bigger return then the money you save in paying it off early. I guess if

I was a financial advisor and sat around in a office playing wannabe "Wolf of Wall Street" on etrade then I would probably give the same advice. most of us don't have the time or knowledge to invest effectively

I would be better off buying lottery tickets.

Pay the loan off early and then take what you were paying on the loan and figure out how best to save or invest, which ever suits your lifestyle.

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In a related story here in Iowa. About a quarter million households are behind $46 million on utilities because of the winter cold spell. That is roughly 1 out of every 5 households here in. http://www.desmoines...&nclick_check=1

Usually the electric and gas companies will work with homeowners, but if the utilities are run by the city rather then a corporation, the city usually will act quick and shut off your utility if you are not current on every penny.

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A lot of the financial people still tell you to do this saying that if you take the extra money and invest it in the market you will make a bigger return then the money you save in paying it off early. I guess if

I was a financial advisor and sat around in a office playing wannabe "Wolf of Wall Street" on etrade then I would probably give the same advice. most of us don't have the time or knowledge to invest effectively

I would be better off buying lottery tickets.

Pay the loan off early and then take what you were paying on the loan and figure out how best to save or invest, which ever suits your lifestyle.

Some of those same people will tell you to keep all your money in a savings account, because you are gaining interest, even though you gain only like 1/10 of 1% yearly.

Personnally I would pay my house off immediately if I had enough extra. I'd also set money aside for my kids to go to college. Which is a whole other pile of worms. Income rises by like 1 to 2 percent per year, and college expenses rise by like 10 to 15 percent per year. I'm going to need like 400,000 dollars to send my 6 year old daughter to a 4 year university in 11 or 12 years. I am not going to pay that by saving 50 dollars a month, I can tell you...

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Usually the electric and gas companies will work with homeowners, but if the utilities are run by the city rather then a corporation, the city usually will act quick and shut off your utility if you are not current on every penny.

It's illegal to shut off utilities here in Iowa during winter because of how cold it gets.

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Some of those same people will tell you to keep all your money in a savings account, because you are gaining interest, even though you gain only like 1/10 of 1% yearly.

Personnally I would pay my house off immediately if I had enough extra. I'd also set money aside for my kids to go to college. Which is a whole other pile of worms. Income rises by like 1 to 2 percent per year, and college expenses rise by like 10 to 15 percent per year. I'm going to need like 400,000 dollars to send my 6 year old daughter to a 4 year university in 11 or 12 years. I am not going to pay that by saving 50 dollars a month, I can tell you...

It is getting to the point where higher education is a shot in the dark. is it a wise investment? I went to trade school and do well for myself close to what most people I know with 4 year degrees make. I guess if the

economy turns around then I may be singing a different tune. I have two kids closer to college then yours 11 and 14. Lord knows how I'm going to pay for that, but he has always exceeded my needs so far.

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My boss's grandfather used to take out a mortgage for his house and invest the money in the stock market. He died with around 6 million. This was back in the boom years though. Personally, I thought that was insane with the level of risk we have these days. So I agree with the paying off the mortgage as soon as possible.

I went to college and also picked up a trade. My college friends have had varying levels of success. Some went on an became VP's making six digits, one went to work for NASA, but some also ended up working at a hog farm, or being an in-home health caretaker. Most didn't even work within their degrees. Those friends with trade skills generally ended up making $40-100k a year. Nowhere near as much as my college friends with the high end jobs, but the education was a lot cheaper. (No college debt)

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As to mortgage, I just keep paying mine down. While my In-Laws keep refinancing their credit cards back into the house, so they have near zero equity even though they have been living there 20 years. When I found that out, I was shocked....

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Many things these days are "necessities" that were not before. Cell phone, cable television, high speed Internet, data plans. All these things were luxuries not that long ago but now it seems people can't do without them.

Bull. The only one of those I have is high speed internet, and that's only because I work online and need it... actually need it to make my living and feed my family, etc.

I see so many people making excuses, saying they "need" something or whine about how they have debt. People need to wake up and realize how stupid they're being.

When I made less than $20,000 a year at my first job, I put $5 from every paycheck in a savings account. Amazingly my kids didn't starve with that $5.00 less, and the next year when my car desperately needed repairs I had the money for it without going into debt.

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