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A good friend of mine would regularly burst into tears in the bank on payday because she knew her rent and car payment would be taken out first thing in the morning, but her pay wouldn't be in until end of business.

Other weeks she would get a panic attack and cry herself to sleep because she'd had to get a flat tire fixed for $20, and she knew it would all come crashing down at the end of the pay period and she'd be $20 short.

I'm not saying her poor choices didn't get her there, I'm just saying that for lots of people, $20 can run their life.

I never allow any company, for any reason, to use ACH on my bank accounts. When you do that, you lose control over your finances.

Do you mean auto-drafting of bills? In my experience, you can usually set it up to take the money it at the last possible moment. In that case, I don't see how you could get any benefit from doing it manually. Is there something I'm missing?

For folks right at the edge the decision may come down to "which is higher, the late fee or the overdraft fee?"

A few years back there was a case against one of the big banks over structuring transactions on the same day - the bank was doing them largest to smallest, with the end result that people were being hit with multiple overdraft fees in one day. If you had enough for 3 of 4 bills but would be $100 short on the largest, the bank would pay the big one, then the second largest, then either cover or bounce the last two while charging an overdraft fee for each. At the end of the day instead of being $100 short you were $200 sorry with extra fees.

^ exactly. I believe it's now illegal to do transactions in that manner, but there was a time when it was SOP.

Yes, auto-drafting of bills.

There are two major benefits.

- more control. You can choose to delay paying a specific bill to make sure more important bills get paid on time.

- safety. You'll never find yourself trying to get money back from a company that you're having a dispute with.

I used to allow it, and I ran into the second issue. It's the reason why I made that decision years ago, and I don't regret it one bit. It takes all of 1-2 hours/month to get all my bills paid.

The first point (control) is more for the post I was responding to, however.

I've seen many middle class employees run to their cars at lunchtime on payday, to get to the bank and deposit it before their checks bounced. It happened every payday.

I've seen employees run to the bank at lunchtime on payday, to deposit their paycheck before the paycheck bounced.

Those in a better financial situation could avoid the stress by jumping ship when trouble first arose (i.e. it wouldn't be jumping out of the pot and into the fire).

Middle class is more a way of thinking than income level. Due to some amazingly bad decision making by my parents my family was quite poor by the time I reached high school. While it was not easy, I was able to pull myself up into the upper middle class by hard work and delayed gratification. I was only able to do this because my thinking was middle class. My poor friends and acquaintances who did not have this way of thinking were not able to escape their poverty.

What you may be getting at is something similar to this: https://en.wikipedia.org/wiki/Culture_of_poverty

Which I don't completely disagree with. At certain cross-cutting cleavages, one can reasonably say that it is the people in a toxic environment who perpetuate the toxicity than most other influences (not combined)[1]

Two problems, however, with redefining social class to be based upon "thinking" is that it neglects causality of said thinking, and, worse, fabulates "just so" stories.

The first problem can be phrased as: are my poor friends bad at managing their socioeconomic lives because they don't have the same values or abilities as I, or is it because they're too exhausted by their daily drudgeries to invest the time and effort to climb the ladders of advancement? Do I have more natural talent and skills which align with market needs than my fellow? Perhaps a bit of both for the first question, and yes, probably, for the second.

The second problem with that perspective is that it essentially boils down to: "The poor think poorly therefore they are poor.", "The middle class thinks good therefore they are the middle class." and, of course, "the upper class think amazingly therefore they are upper class." One can argue that poor thinking will lead them to make unwise decisions that will sap their financial strength[2]. But not always: what goes on in the head doesn't necessarily always changes the number of zeros in a bank account. [3]

While I agree an individual ought not to be not foolish with their assets, other factors like environment must be included in analysis to know why some succeed and most flounder. Conflating class with intelligence, i.e. a way of thinking being the main criteria for class, is more or less an opinion page of the Wall Street Journal and not a good start for analyzing how to better social mobility.

[1] Pakistan is a good example of people perpetuating toxicity. Context: https://news.ycombinator.com/item?id=9642488 and direct link: https://www.quora.com/Does-the-average-Pakistani-support-the...

[2] In a rigged system, I would say that poor thinking by an upper class person could paradoxically help them ascend to even greater heights. For example: https://www.washingtonpost.com/news/on-leadership/wp/2014/03.... For a better and more topical example: http://www.politico.com/magazine/story/2015/09/donald-trump-...

[3] http://krugman.blogs.nytimes.com/2014/01/28/money-and-class/...

in re your [1]

http://www.bbc.com/news/magazine-28439518

http://www.dawn.com/news/1163596/why-blasphemy-remains-unpar... (whole series is good)

http://www.dawn.com/news/1151930/it-wasnt-the-final-atrocity

By thinking I don't mean intelligence, but the way of looking at the world. I could see even from a young age that by working hard and delaying gratification I could escape poverty which others in the same financial situation as me did not see. They had the same opportunities as me, but for whatever reason they were not able to utilise them. I saw poverty as something that could be escaped from, while others saw it as their lot.

People can be overextended at any income level. And people who make minimum wage can be very careful with their money, live at home with their parents, pack their lunch, and have thousands in the bank.

Yes, there are outliers and exceptions to the rule at every level.

This is more than outliers. There are way more middle / high income people over-extended to call them outliers. Also, there are pretty much whole countries of people who we would consider to have "poor" incomes who manage their money prudently.

There are billions (BILLIONS) of people living in grave poverty in the developing world for whom "managing their money prudently" means not getting any shoes more than once a year or skipping diner.

The idea that any significant percentage of poor are poor because they are not prudent does not hold.

And even if it did, it's way easier to be "prudent" when you have a basic income that covers your needs and leaves a little or a lot more to be prudent with, than when you go hand to mouth with every paycheck.

> The idea that any significant percentage of poor are poor because they are not prudent does not hold.

It holds pretty well.

There is no contradiction in billions of people being not prudent.

It's easily achievable with poor culture dominating in the whole society.

>There is no contradiction in billions of people being not prudent.

That's in theory -- we're talking about reality. If you think poor people in India, Asia, Africa etc. are poor because they are not "prudent" or because "poor culture" dominates the whole society you probably haven't met many in real life -- hardworking, pinching pennies and raising families on a handful of dollars a month.

It's easy for people playing life in easy-mode to condemn the poor's "lack of prudence" from a first world middle/upper class existence, where prudence means not buying a new car every 3 years.

Being hardworking is not enough. You should also work in a right direction and in right environment. Right culture helps you choose right direction and right environment. Right culture also helps you to make right changes in your political environment.

For example, if your culture allows lies and corruption from elected politicians, you are likely to create suboptimal environment around you.

My friends in Russia make that silly choice - they support lying corrupt politicians in favor of pleasing their nationalistic feelings.

Guess what - they lowered their income ~2x just by that.

It is a function of culture. And experience. People who lived through the Depression or lived in another country where resources are hard to come by are more likely to be savers.

People who've been handed everything often don't prepare for the future.

People who understand the magic of compound interest are more likely to be savers.

People who've grown up with the government punishing savers, not so much. Perhaps they even think those who save are weird or outliers.

Yes, but it's also good to understand how some people in really poor places like Bangladesh or Malawi are able to overcome while others in the same class and circumstance aren't, for example. What, is it in those people which makes them overcome obstacles others can't or dont want to. What makes some people succumb to circumstance while others persevere in the face of it?

Number one factor LUCK.

There are many ways to get completely fucked over even if your wealthy. Money acts as an insulating factor, but if your lucky you don't need healthcare, or tutoring etc.

The thing is when you look at the bottom 2,000,000,000 people you end up with some real outliers. If they all got 1 megga million ticket per year then in a decade you end up with 77 winners. Sure, it's a terrible use of money, but you don't learn much from looking at outliers because your selecting for lucky people. Look at the luckiest 0.1% and you have 2 million people.

Luck explains some. But you see the woman who sells water at the bus depot, or the man selling loose cigarettes, etc. Some hustle and hire someone [other family] else to do the same thing, expanding little by little. They are not wealthy, but they can afford to send their kids to public school, whereas others can't "afford" [buy shoes, textbooks, etc] to send their kids to public schools. One invests in the next generation so they can get a government job (or perhaps private) while others will be be stuck in the poverty cycle.

Your Bangladesh example really proves that social circumstances matter more than individual qualities. A moderately intelligent and somewhat hard working middle class American who goes to a decent state college enjoys a standard of living that far outstrips that of all but the absolute richest Bangladeshis. Why? Is he just smarter and more hard working than the top Bangladeshi students who go to the top Bangladeshi colleges? Or is it because he faces totally different circumstances?

Circumstance is an important factor. As you illustrate, Americans (or middle class Nigerians, or Japanese, or Chilean) have a higher potential circumstantially, but despite that many "underachieve" with respect to what someone else could do with similar resources (education, infrastructure, healthcare, economic stability, etc.) in other places.

So, yes in many ways it's relative. But additionally persevering is better than succumbing to circumstance.

When my mom was working, they didn't have direct deposit, so she had to pick up her paycheck from her mailbox in the school office. She always made sure to pick it up promptly, because leaving it there over the weekend made it look like she didn't "need" the money.

> Middle class means you don't care if your paycheck gets delayed from Friday to Monday. Middle class is when you don't have to count how many times a week you go to the laundromat.

Middle class varies beyond recognition depending on which culture you're looking at --- I suspect you're overgeneralising your own. (Weekly paycheques? Laundromats which are cheaper than washing clothes yourself? Neither of those are things where I come from...)

His anecdote works with biweekly paychecks, and many city apartments in the US do not allow a washer and dryer.

Not all people live in the US.

And with monthly paychecks? (and monthly rent)

When you say "washing clothes yourself," do you mean with a laundry machine and dryer, or in the river? Certainly, it costs more to do laundry at a laundromat on a per-load basis, but having your own washer and dryer is a capital investment many people can't afford to make.

Sadly, middle class, as evidenced by these responses, also means that you don't see why other people would care if their paycheck gets delayed by a business day or two.

Please stop trying play mind reader. There is no evidence of that by these responses.

middle class is defined by income.

Someone who makes $15k/month and has $14.5k/month in expenses will be stressed out, but no one would claim they're poor, just foolish.