More than half of Americans earning more than $100,000 a year say they're living paycheck to paycheck, according to a report from PYMNTS and LendingClub. This may be a result of a sneaky behavioral phenomenon called lifestyle creep, which is when a person's spending habits expand as their income rises. The rise in the cost of living complicates matters, as incomes have not kept up with inflation. Watch the video above to learn more about why Americans struggle to keep money in their pockets.
Is there a non video answer for those of us who prefer text?
Anyway. I remember talking about lifestyle inflation with a coworker a couple years ago. I said I could probably squeak by on $50k/year*. We were both guys living alone at the time.
He was like “how?? Like, you need at least $1000/month for food alone.”
I said, what? How are you spending that much? I budgeted for $300 but I’d likely hit half that with some effort.
He was like “Well you go out to dinner, you buy drinks for your friends, it adds up”
“You don’t go out for dinner that much when you’re on a budget”, I said. “Or buy rounds of drinks.”
“Oh,” he said. “I guess not, huh.”
–
I did have to make a rule in relationships to not discuss finances because it would cause me pain. Like one person in particular was a great person, but they never made a budget and were always in debt. And they’d be like “I’m going to go to California to visit friends for a week”. Killing me. You don’t have the money for that. Every dollar you spend on this enterprise is more like 2 because it’s carried on credit card debt. But I learned to keep it to myself because no one wants unsolicited advice, and it is cruel for our system to deny people fundamentals like seeing friends and family while others have mega yachts.
* This is heavily predicated on me not having any outstanding debt, which is unusual I think. I never carried credit card debt, but my student loans were only a few hundred a month and I’m old enough they’re paid off now. If I had $500/mo in debt I think $60k could squeeze by. It’s possible I messed up my math, though.
This reminds me of my ex. Her family was wealthy, my family was not. I got through college by working and taking student loans, as did she, but she was reimbursed by her parents for all of her expenses at the end of each semester. I got nothing.
So she’d start each semester with loans in excess of what she needed for tuition by thousands of dollars and a huge payment from her parents for the previous semester, all of which she kept instead of paying off her loans. Without fail, she’d need to start borrowing money from me by the end of each semester because she’d spent it all going out drinking with friends nearly every night.
It used to piss me off so much. I was budgeting hard because I had no other income while she was out partying all the time. She eventually left me because I wasn’t going out with her as much because I couldn’t afford to, especially because she kept using my money to support her lifestyle. In retrospect, I dodged a bullet.
I agree with this, it seems like the best solution to me.
I think where this gets tricky is with kids and retirement.
How would you address that? If you’ve got more saved for retirement does that mean you would retire early while she is still working? How does the household budget work when she isn’t working because she just had a kid? I guess you’d just contribute the full budget?
I have been in numerous relationships where we did not discuss finances in any detail. We’d talk about like who’d pay for dinner, but not larger stuff like “are you saving enough for retirement” or less at-hand stuff “is that Netflix subscription really worth it?”
Not every relationship is monogamous marriage with merged finances. Sometimes you date for a couple years. Sometimes you’re polyamorous. There are many options for relationships.
Edit: your last point has truth to it though. Finding partners who are financially compatible is a plus.
Is there a non video answer for those of us who prefer text?
Anyway. I remember talking about lifestyle inflation with a coworker a couple years ago. I said I could probably squeak by on $50k/year*. We were both guys living alone at the time.
He was like “how?? Like, you need at least $1000/month for food alone.”
I said, what? How are you spending that much? I budgeted for $300 but I’d likely hit half that with some effort.
He was like “Well you go out to dinner, you buy drinks for your friends, it adds up”
“You don’t go out for dinner that much when you’re on a budget”, I said. “Or buy rounds of drinks.”
“Oh,” he said. “I guess not, huh.”
–
I did have to make a rule in relationships to not discuss finances because it would cause me pain. Like one person in particular was a great person, but they never made a budget and were always in debt. And they’d be like “I’m going to go to California to visit friends for a week”. Killing me. You don’t have the money for that. Every dollar you spend on this enterprise is more like 2 because it’s carried on credit card debt. But I learned to keep it to myself because no one wants unsolicited advice, and it is cruel for our system to deny people fundamentals like seeing friends and family while others have mega yachts.
*This is heavily predicated on me not having any outstanding debt, which is unusual I think. I never carried credit card debt, but my student loans were only a few hundred a month and I’m old enough they’re paid off now. If I had $500/mo in debt I think $60k could squeeze by. It’s possible I messed up my math, though.This reminds me of my ex. Her family was wealthy, my family was not. I got through college by working and taking student loans, as did she, but she was reimbursed by her parents for all of her expenses at the end of each semester. I got nothing.
So she’d start each semester with loans in excess of what she needed for tuition by thousands of dollars and a huge payment from her parents for the previous semester, all of which she kept instead of paying off her loans. Without fail, she’d need to start borrowing money from me by the end of each semester because she’d spent it all going out drinking with friends nearly every night.
It used to piss me off so much. I was budgeting hard because I had no other income while she was out partying all the time. She eventually left me because I wasn’t going out with her as much because I couldn’t afford to, especially because she kept using my money to support her lifestyle. In retrospect, I dodged a bullet.
it’s impossible to be in a relationship and not discuss finance unless you just straight up do not intend to be in any committed relationships.
the easier way is to not be in relationships that you’re not financially compatible.
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I agree with this, it seems like the best solution to me.
I think where this gets tricky is with kids and retirement.
How would you address that? If you’ve got more saved for retirement does that mean you would retire early while she is still working? How does the household budget work when she isn’t working because she just had a kid? I guess you’d just contribute the full budget?
deleted by creator
I have been in numerous relationships where we did not discuss finances in any detail. We’d talk about like who’d pay for dinner, but not larger stuff like “are you saving enough for retirement” or less at-hand stuff “is that Netflix subscription really worth it?”
Not every relationship is monogamous marriage with merged finances. Sometimes you date for a couple years. Sometimes you’re polyamorous. There are many options for relationships.
Edit: your last point has truth to it though. Finding partners who are financially compatible is a plus.
deleted by creator