Hand-to-mouth living from a credit card company perspective
eduardo.intermeta.com.br
eduardo.intermeta.com.br
In general these will be young people who are out to enjoy life and whilst many adapt a more moderate balance lifestyle, there are always some who carry on.
Certainly with the lack of incentives for savers, this certainly does not help motivate people and why should it.
What I would be interested in is a graph of fiscal behavour done per age groups and fiscal income. Also if they are single or married or have children. Then I believe you would see a more measurable trend.
Though it is worth bearing in mind credit card companies prefer people who live like this as they make them more money than not and with that is it a testiment to how well credit card marketing is actioned I do wonder.
This is an audacious enough claim that citation is needed. It also smells a little like fundamental attribution error (i.e., assigning behavior because is is the nature of the individual, rather than situational).
I feel the same way about the above statement.
My gut says there are tens of millions of middle age families living hand to mouth, struggling.
It's hard to take people seriously when they tell me about how hard up they are financially, when I know they have iPads and iPhones, and so on and so forth.
Anecdotes are not data, of course, but I am gradually becoming more and more convinced.
They may not have the money anymore, and it may not make sense to sell all of their high-depreciation items at large losses when they can have the satisfaction of continuing to use the device.
Yes, only in the first case they buy mostly essentials and they are fucked if they have some emergency, where in the second they buy more stuff, can take of their children more, and can use some of their paycheck (or the next one) if a need arises.
I don't care much for the morally scathing undertone of the comment.
>In general these will be young people who are out to enjoy life and whilst many adapt a more moderate balance lifestyle, there are always some who carry on.
Spoken like a middle or upper class person who has never come in contact with the large swaths of poor people out there before, or if he ever had, has long forgot all about it.
The US is like a third world country job-wise and living conditions wise in many places. I've been to all, from Mississippi to South Dakota to Georgia and Alabama to Idaho -- and I've seen and spoken to people in similar situations all over, from NY to Seattle.
Living from paycheck to paycheck is not about some ...hipsters ("young people out to enjoy life"). It's about the declining middle class and the new masses of poor. Including millions upon millions of blacks and latinos.
[1] http://www.huffingtonpost.com/2013/02/12/top-one-percent-inc...
The top 1% of earners make most of their money due to the stock market and related activity by design, because if you're a shareholder in Coca-Cola, you want a CEO who actually cares about making Coca-Cola profitable over the long term, rather than someone who would collect a pretty salary for a few years and then retire to a life of leisure. You do that with equity compensation, stock options that vest over time - and, since satisfaction with money is logarithmic, you're going to need a lot of them.
Now, the overall level of justice achieved by this current system (or lack thereof) is in fact a valid topic of discussion, though largely outside the scope of the post I make here. By contrast, this cherry-picked number you present INTELLECTUALLY DISHONEST.
I call on you to be ashamed of yourself. Unprincipled yellow journalism of this nature is bad enough in the wild, but HERE of all places we ought to value REAL information and understanding, not rhetoric and obfuscation. (Alternatively, please abandon Engineering and seek employment in the scummiest Marketing department you can find.)
The same basic trend (a small fraction at the top go up, the rest goes down) was basically true during the "expansion" from the end of the 2001 recession to the beginning of the 2009 recession (in that period, IIRC, by quintiles the bottom four all so declines in real income, and the top quintile was flat; the top 5% had a modest increase, and the top 1% had a significant increase.)
This is why the 2001-2009 period between recessions seemed, in many ways, like a continuation of a long recession. Because for most people, it essentially was.
Frankly if someone isn't professional enough to do their job without some cartoon carrot hanging in their face, I'm not sure how they would be suitable for a top position in the first place over those who apparently are. -- It's also worth mentioning that there's little contention over the fact that salaries and wealth at the top of the pyramid are rising faster than the norm. The majority of GDP growth for quite a while has been going to the upper crust. I suggest reading the following if this isn't yet evident:
As the Joker said in the Dark Knight, when you're good at something,
never do it for free.
Your phrasing implies the SAME PEOPLE are in the top 1% each year, which is not the case. And implies that what happens to a cohort also happens to everyone WITHIN that cohort, which is also not the case.
Lastly, we don't have income numbers for "people", we have it for "households". (The "top 1%" contains significantly more than 1% of the people.)
Or it contains less than 1% of people if the average household size for the top 1% is smaller than the average household size for the lower 99% (which it most likely is; wealthier people have fewer children on average).
I don't believe that's the case. At least not if we're using income as a proxy for wealth. Arranged by income, wealthier households in general tend to be larger households.
It's well established that the "top 20%" by income contains more than 20% of the earners - lots of dual-income couples - and also contains more than 20% of the people; the "bottom 20%" contains less than 20% of the earners and people. Seems to be true for 1% as well. If you want to check, there's a nice table of household size by income here:
http://en.wikipedia.org/wiki/Household_income_in_the_United_...
Of course, my point still stands: just because it's 1% of households does not necessarily mean that it's >1% of people (it may very well be, though).
Globally, I've seen references for years about high birth rates in poor countries, with (anecdotal?) indications that having multiple children was a requirement if you were going to have someone to take care of you in your old age. I suspect that also ties in heavily with youth mortality rates - you may have multiple children in hopes that some of them will actually make it through.
There is a general extreme preference for the present equilibrium out there. This is exhibited by employees and by employers. In the '80s, '90s, you were expected to job hop a bit to keep your skills up and to lighten the load when projects ended. That is no longer the case and I think productivity suffers for it.
I get the point, but the phrasing is messy.
Yes, the less surplus income people have, the greater is their marginal propensity to spend.
> Certainly with the lack of incentives for savers
The US tax system has such extreme incentives for saving and investment as opposed to spending that any statement that starts this way is worth nothing but a laugh.
People with very little extra money to save likely can't take the risks or costs associated with equities investment anyway, so really they only get exposure to interest rates in savings accounts and CDs, which are being kept artificially low. If you only can save <$1,000 per year, you likely care a lot more about the interest rate on savings accounts than you do about how 401k matching is taxed.
Ex. Section 8 housing vouchers, CHIP (Children's Health Insurance Program), subsidized child care, among other.
Put together there are many cases where someone is better off earning less but receiving more benefits. In the cited example a single mom will earn the same net income whether she earns $29k gross or $69k gross.
(See the bottom of the document) http://johnhcochrane.blogspot.com/2012/11/taxes-and-cliffs.h...
http://www.aei.org/files/2012/07/11/-alexander-presentation_...
Can you elaborate?
Resource limit for SNAP: http://www.dpw.state.pa.us/foradults/supplementalnutritionas... -- translation: "Have less savings, get SNAP".
Patient Assistance Programs at hospitals: http://abcnews.go.com/blogs/health/2013/03/28/real-money-hid... -- translation: the government says your hospital has to "give back to the community" by not making you pay your bill if you say you can't.
Do you mean aside from the inherent motivation of being able to weather the small financial storms of life and generally being able to build wealth and have significantly more options available to you in many parts of your life?
In the past when we had consumers having too much debt interest rates would slowly rise, nowadays they do there damdest to keep them low to avoid hurting those with large debts. Bottom line is the fiscal appraoch being taken by goverments favours those in debt compared to those who save.
Heck even been talks of having negative interest rates in some countries, that is just down right crazy too me.
This with banks basicly being allowed to rob customer accounts via varous means and the protection offered being limited - the publics trust in banks has been eaten away. 10 years ago if somebody kept money under there matress, they would be laughed at and called old minded, nowadays they would not be laughed at as much and in some countries they would be utterly envied for there wisdom.
That is what I meant about lack of incentives for savers, hope that clears that up.
Traditionally speaking, paycheck timing was used by retailers catering to low-income segments -- especially those on food stamps, and those who buy groceries on extremely predictable cycles (by necessity). But what's interesting, not to mention troubling, is that this trend is proliferating up the socioeconomic ladder. It's been going on for awhile now, dating back to before the 2007/8 crash, though certainly made a lot worse ever since that downturn.
Shopping behavior -- particularly shopping behavior among segments of the population living paycheck to paycheck -- follows very predictable patterns like these, often by necessity.
Now, let's put this into practice. I'm managing a regional grocery chain. Let's say it's Kroger in the Midwest. I want to win customers' share of wallet on the payday stock-up trip, so they'll go to my store instead of a competitor's (let's call that competitor Meijer). I'll time my sale accordingly on key items (often these are "price indicator" items that signal price superiority over other competitors in the area). Meijer will be timing its sale the same way, and so a lot of game theory and competitive intel will come into play here. But this is why grocery items and household necessities are cheaper at these big chains two weeks out of the month.
When gas prices are volatile this actually makes sense. It's the same principle as "dollar cost averaging" when you buy stocks. Purchase a fixed dollar amount, and you end up buying more when the price is low, and less when the price is high, which is what you want to do. Therefore when I buy gas I stop at $25 unless I have a coupon or I'm somwhere that prices are significantly lower than where i normally buy (prices vary by $0.50--$0.75/gal within a 50 mile radius).
The OP also said it was based on 5+ years worth of data which probably means it is less about gas price fluctuations and more about buying habits.
Really, in the end, this is little more than a moderately well-sourced anecdote.
But what the article says is that they don't put more the $20 at a time, period.
Such a behavior wouldn't see any advantage given volatile prices, because in the end you end up paying the same (you pay lower at some times, higher at other).
Which is the article points too: that they see the guys doing that end up paying the same amounts as the guys filling it up normally.
So it's not the volatile prices that get people doing that, it's perhaps a false idea of saving money, or that they infact do not have that much lying around and try to get to the end of week accounting for any emergency.
I believe people do this because, in case of an emergency, they can switch to public transportation and use that cash for something else.
*Difficult period: I had money for one meal a day. Didn't have money to pay for two subway rides so I would walk 6 miles a day to walk from the campus to the place I was living (which was a garage's attic).
You should either sign up with a different account or email pg and ask for your account to be reinstated.
Besides, a car weighs about 2500 pounds (more in the case of a van or SUV). That 13 gallons would only increase the weight of the vehicle by 3%. I'd be willing to bet you would get more fuel efficiency by just slowing down 3 mph than you would get from keeping your tank only partially filled.