Half of Americans are spending their entire paycheck (or more)

[Tennis]

http://money.cnn.com/2017/06/27/pf/expenses/index.html

Nearly half of Americans say their expenses are equal to or greater than their income, according to a new study from the Center for Financial Services Innovation. And for those 18 to 25 the percentage is over half, up to 54%.

"Half of America has no financial cushion," says Jennifer Tescher, president and CEO of CFSI, which released the study. "They are living really close to the edge."

Of the 25% who say they have too much debt, 96% report being stressed. This kind of financial stress has lasting health effects for those constantly working to cover the nut, says Tescher. "We can't deal with their health problems if we can't deal with their financial health."

With one out of every two people maxed-out with expenses, it is likely you or someone you know. "It's your co-workers, the receptionist, the guy mowing your lawn, the woman who takes care of your kids."

Perhaps we're overspending? Maybe the gig economy isn't working for us?

Certainly we can all do the hard work of cutting back on our expenses, says Tescher. But she says the results of this study show something more structural than individual spending.

"People are spending a shockingly large amount of income on housing. They have to pay for transportation to get to a job. These costs are going up while their wages stay the same."

Another major contributor, according to the study, is irregular income. Nearly 40% of those who spend as much or more than their paychecks have volatile income, which means it varies from day to day, week to week, month to month.

On average, families experienced income volatility five months out of the year, according to the recent book, "Financial Diaries: How American Families Cope in a World of Uncertainty," by Jonathan Morduch and Rachel Schneider, who is also at CFSI.

And in those volatile months, income could range by more than 25%, meaning $1,000 in income could be upwards of $1,250 one month, under $750 the next.

How do we get out of the rut?

New financial tools aim to help people manage their money more efficiently. Like Activehours, which allows you to get part of your pay ahead of payday in a way that is not a payday loan. There is also a tool called Even, which, in addition to helping you budget, does just that: it evens out your pay from high periods and shoots it to you when you have lower periods.

But Tescher doesn't see tech tools as a magic bullet.

"We have a series of structural challenges in this country that require policy solutions," she says. "We need to remove the stigma of talking about money problems and make it clear that a lot of people are struggling."

This is shockingly high. It is clear the government needs to do much more. Enough spending overseas on the military and much more spending on social services on home. Time to take care of the citizens!

[Theodarzna]

http://money.cnn.com/2017/06/27/pf/expenses/index.html



This is shockingly high. It is clear the government needs to do much more. Enough spending overseas on the military and much more spending on social services on home. Time to take care of the citizens!

OMG, Tenni has gone full Trump, that sounds like America First talk!

[Independent voter]

It's been this way for 50 years.

[Tack980]

And what's new?

[Tennis]

Err I'm advocating for much lower spending on the military and much spending on the people who need a hand. That's not what Trump is proposing.

[Vizardlorde]

I am only able to save half of my check thanks to living with my parents if not id be in the red. I make $4 over min wage and dont spend money on anything aside from gas and insurance. I imagine everyone on min wage must be on welfare or or drowning in debt

[Eyechewer]

Maybe it's because I'm leaning heavily towards capitalism and free market economy - I say every man for himself. The government should stay out of economics and out of people's pockets as much as possible. No help for spenders. Fix it yourself.

[I Push Buttons]

For a lot of people, that is simply living above their means.

My parents as an anecdote... My mom is a lawyer and my dad works in the oil industry, both make a lot of money... But they live "paycheck to paycheck" so to speak because they own two large houses houses (one is a vacation home)... They buy brand new SUVs and trucks every few years... A plethora of other things (boats, campers, etc...)

If they simply got a decent apartment and drove small cars they would have literally hundreds of thousands of dollars of disposable income. Instead they they pay out literally everything they make a month in loans and insurance and live in fear that my dad will lose his job in the oil industry since its in the shitter right now.

[Yelmurc]

You choices for the poll are not complete. I think the government should get out of the way. The only thing they need to be doing is trying to make things more competitive so that prices go down. The first thing I'd do if I was the government is I'd try to get home and apartment builders to flood the market. Rent is about a 1/3 of most people's income. If you could even reduce that to 1/4 you'd free up a ton of capital for the economy. This doesn't mean the government do anything other than make the environment for builders really attractive.

[Molis]

Err I'm advocating for much lower spending on the military and much spending on the people who need a hand. That's not what Trump is proposing.

Except that is not the root cause.

Many Americans overspend on frivolous items to get that ever needed social status.

Do they really need that giant four wheel drive truck and jet ski, and yet can not pay the rent on time?


Also if we spent less on Military who would protect Canada from invasion?

[Tennis]

Except that is not the root cause.

Many Americans overspend on frivolous items to get that ever needed social status.

Do they really need that giant four wheel drive truck and jet ski, and yet can not pay the rent on time?


Also if we spent less on Military who would protect Canada from invasion?

Exactly. Spend less on the military and more on providing help to the very poor. At the same time crack down on these loan and mortgage companies. Ensure that downpayments are high.

[Zeta333]

Err I'm advocating for much lower spending on the military and much spending on the people who need a hand. That's not what Trump is proposing.

how is less spending on military going to help the average joe? This isnt a poor thing, this applies to middle class as well.

sorry but when europe can protect itself and the other parts of the world as well maby we wont have to spend so much on military. But as it is we protect south korea, japan, most of europe, shipping lanes across the world and more.

[oxymoronic]

It's been this way for 50 years.

nah, before you didnt really have much to buy.

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how is less spending on military going to help the average joe? This isnt a poor thing, this applies to middle class as well.

sorry but when europe can protect itself and the other parts of the world as well maby we wont have to spend so much on military. But as it is we protect south korea, japan, most of europe, shipping lanes across the world and more.

im glad others are seeing it that way too, including our officials. when i 1st posted that years ago on this site people thought i was batshit crazy, now, well you see, the truth is coming out.

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Exactly. Spend less on the military and more on providing help to the very poor. At the same time crack down on these loan and mortgage companies. Ensure that downpayments are high.

sweet, low income people should never own their house

[cuafpr]

yeah cutting mil. spending could hurt this with job losses... people need to be smarter with money (myself included) all there is to it.

[Deleted]

This is just stupid.. crazy stupid.

The government needs to butt out.. the more they get involved the more they mess stuff up. I can't stress this strongly enough. They need to do way way less..

[Deleted]

Well that either means you made bad decisions and thus cannot afford your life style ... or you do not get paid enough to afford even the basics.

My guess is it is a mixture of both, but with all those offers like "get this now and pay later" it is very likely that many especially younger people do not manage their money properly - not sure if the government could do anything about that. It is basically people misjudging their position, mixed with good marketing.

[Baelic]

Err I'm advocating for much lower spending on the military and much spending on the people who need a hand. That's not what Trump is proposing.

There's what Trump advocates (which makes him much more of a Democrat than he appears) and then there's the GoP's agenda that they keep trying to push behind everyone's back.

[Low Hanging Fruit]

Another couple hours another post by the OP that has to do with America. Big news here. /eye roll

[Wyrt]

This is just stupid.. crazy stupid.

The government needs to butt out.. the more they get involved the more they mess stuff up. I can't stress this strongly enough. They need to do way way less..

Just let everything go crazy exploiting the shit out of everyone then? Maybe it'd be worth having kids if they can be sent off to work in factories again.

[Seranthor]

http://money.cnn.com/2017/06/27/pf/expenses/index.html



This is shockingly high. It is clear the government needs to do much more. Enough spending overseas on the military and much more spending on social services on home. Time to take care of the citizens!

You DO realize that if the military spends less than means countries that live under the US defense umbrella will have to start paying for their own defense. Ignoring that, when did it become the government's responsibility to cover for the bad spending decisions of its citizens?