Comment by Rotdhizon | Hacker News Reader

Comment by Rotdhizon | Hacker News Reader

I think about this very topic sometimes, but my levels are different. Mine are something like

1. Paycheck to paycheck. Includes constant worry and frustration about living expenses and basic necessities. Any unexpected cost will lead to not being able to pay the bills. Money is on your mind 24/7, life in this category is hell. Very difficulty to escape this category once you fall into it.

2. Able to afford living expenses with a little left over. I guess you'd call this middle class? Or maybe upper lower class. These people have an income that lets them pay their bills without worry, so they have a cushion of a few hundred/thousand dollars a month. These people don't experience stress over standard bills anymore, they are free to enjoy living life a bit fancy. Can go out to eat at good restaurants, can afford to do miscellaneous activities.

3. Anything above #2 really. This is the bracket and beyond that has plenty of income in that expenses don't matter anymore. Stress about affording living expenses is non-existent.

I would disagree with 3 because there are many in 2 and 3 which can go to 1 just by losing their job and e.g. having one high medical bill (in the states at least).

So surely there must be differentiation on whether any given job or emergency can affect your standard of living significantly.

I'd say one of the differences between 2 and 3 is that people in category 3 are virtually immune to dropping a level due to life events.

I'd say look at this generically, without adding exceptions for outliers. Even for #3, a multi-million dollar medical bill could be a huge setback. I'm talking more along the lines of standard happenings. Say if a kid gets sick and the parents need to fork out a few hundred/thousand dollars for treatment. #2 would be able to rely on their cushion to avoid being cast down into #1.

Medical bills aside (the US system is batshit!!) good financial planning should make going from 2 and 3 to 1 far less likely. Unfortunately many people don't bother to save significant backup funds while things are going well.

There's also divorce. Trust me, it can drop you down to 1 in a heartbeat.

So in your classifications the "I don’t care what stuff costs in restaurants" and " I don’t care what a vacation costs" would fall into the same category? To me being able to afford living expenses with a little left over would likely qualify as middle, not having to care about restaurant cost would qualify as upper-middle, and not caring about vacation cost would be upper. There's a pretty huge gap between being able to drop $1000 at a restaurant, and people able to spend tens, if not hundreds of thousands of dollars on a vacation.

There is also not caring about the cost of a restaurant on the odd occasion and not caring about the cost of a restaurant for breakfast lunch and dinner every day.

I think the #3 and #4 should be defined as:

#3 can afford to not work for a long period if the job goes down. This also might let you invest your work in a startup

#4 can afford to not work anymore

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