40-year-old homeowner says economy doesn’t add up: ‘I’m making the most money I’ve ever made, and I’m still living paycheck to paycheck’

Sounds like a modest proposal

So I buy a bunch of gold and leave a map and then bury it in the woods and when I "get firewood."

You didn't finish reading the end of the single sentence in my comment.

the improvements in technology that make elder care less expensive.

I don't make 200k, but together with my wife, we make a little under that. We both have cars, and both are paid off. I still have the first car I ever brought, which is a Nissan Sentra 2006 basic model. So, 17 years on the same car and hers is a 2015 Toyota. We do have 2 kids and brought a house in 2015. The last 4 years have been almost impossible to make ends meet, and all we try to do is survive with the very occasional do something for the kids. I have tons of housework I can't do but also can't pay for either. Because of this, we also can't move until it's taken care of, so we're kind of stuck here as well. We have no money to save or invest. Did we make some bad decisions? Sure, probably shouldn't have had kids for starters. They cost a fortune. But my point is we aren't doing anything crazy here, it's just that more and more things are taking our money and prices also went up. It sucks because all I want to do is live and get by, I don't really have any grandiose dreams of doing crazy things or buying tons of stuff. I just want to get by as my parents did, which seems impossible today.

I gotta back your position here, especially because I think you're being downvoted unfairly. There is a lot of unfairness in this economy for sure but on this thread that started with HENRY and literally "They have given up on the idea of financial solvency and are going into debt to indulge in luxuries" your comments are totally in line and fair.

Want to add too, that even the first subject in the article 'Making the most I've ever made' isn't the best example of a tough economy. She went through a divorce and then bought a house in one of the most competitive housing markets in the US. The high interest rates certainly make that tougher but that'd be hard to afford even before without it.

I think there's a difference between High Earner and High Income that is causing a discrepancy here. Somebody making six figures is a High Earner, but isn't really a High Income anymore. In 2020, I made about $40k, which was more than about 55-60% of Americans made that year. That puts anybody making $100k or more in the top 25%, at least, of incomes in the country. And yet the prices of things mean that more and more of them are living paycheck to paycheck, regardless of their financial planning.

In a lot of ways, what's in the market dictates what people can buy more than what they can afford does. I had to buy an SUV the last time I bought a car because I need the 4 wheel drive for the winters here. I had a front wheel drive car once, and couldn't get it out of my neighborhood when there was more than a half inch of snow on the road. That same SUV today is at least 25% larger than the model I bought, because "that's what the market wants", according to Toyota.

When I was first looking for apartments in 2010, studio apartments in my town started at the $1,500 to $1,700 per month range. The lowest rent I could find was a single room in somebody's house with "occasional kitchen access" for $1,000 a month. And now there are cities where landlords are telling people making $100k that they need to find roommates to afford rent. A 2 bedroom house on a tiny plot of land that's falling apart just down the street from my parent's house got bought last week for $1.2 million. 10 years ago that house was probably worth $500k at best. The new owners intend to tear it down and replace it with an Air BnB, taking it off the housing market and further driving up housing prices in town. Builders are making luxury apartments and condos, and single family suburbs, instead of medium density multi-family housing because "that's what the market wants" and definitely not because that's what has the highest profit margins. I think there's been 1 new mixed-use development built in my hometown since I was living there as a kid, but the number of condo developments has increased from 1 to 17 in that same time frame. Every year more kids leave because it's simply unaffordable to live there. It was even when I was trying to live there, and it's only gotten worse.

There's people living above their means, and then there's people making a six figure salary who just had to replace a car in a market where car prices spiked 30% in the last 3 months of 2023 alone. Personally, I probably wouldn't even own a car if our country wasn't built for cars instead of people. They're priced as a luxury but considered a necessity by the powers that be. Even if you do a lot of the routine maintenance yourself, like me, it's still prohibitively expensive for the majority of people. Even those we could consider High Earners.

No, they said that their choice was either an extra expense of $360 a month for the car that they bought, or $4,000 for a cheap beater that's guaranteed to die on you at some point and be a hole that you perpetually shovel money into if you keep replacing it with more junkers.

That doesn't mean that they can afford the extra $360 a month. Just that it was the cheaper option.

If you’re always struggling to pay your bills, you need to increase your income.

"just make more money" lmaooooo

That's what living pay check to pay check is though...

Broken phone, hot water heater, HVAC, fridge, washer, dryer, toilet, stove, oven, microwave, tv, personal computer, new shoes, new clothes, friend is getting married, friend is having a baby, the car needs a new set of tires, the car was rear ended, windshield was shattered by a rock that kicked up off the road on my way to work, need a new lawnmower cause the second hand Toro mower's gas powered engine is shot, property taxes went up because home values went up, kids got sick and went to the doctor, dentist appointment found a cavity, accidentally sat on your glasses, suit doesn't fit anymore and you have a funeral to attend, older windows on your house built in the 90's are starting to go bad, storm damage to your out of warranty roof, deck needs to be rebuilt because the old wood is starting to dry rot, time to replace the bed(I know you're supposed to replace them every 8 years, but you went ahead and stretched 15 out of this one because you're frugal).....must I continue?

There are peple who are genuinly struggling.

Then there are those who choose to spend 10-20K on vacations every year and 'feel' they are struggling.

And these latter people will forever tell you how they are living 'paycheck to paycheck' and talk your ear off about how theri struggles are more genuine and 'real' than people who are actually poor.

Maybe if they ate less avocado toast right!

"living paycheck to paycheck" generally means that all money is spent on living expenses and there is very little, if anything, left over. If you have any appreciable discretionary income, you are not living paycheck to paycheck.

Lets define "most". Herein I define most as the area immediately surrounding the majority of people. 70% of people live in urban areas not out in bum fuck.

I live in a small city of 50,000 in Washington. A house around here starts at about 400k. I would have to pay about 3100 per month including taxes and insurance. I would take home about 6500 per month after taxes if I made 100k. At current interest rates I would need to spend 3100 per month to service such a loan.or about 47% of my take home pay. It is difficult to see how I could afford a home with a household not individual of less than 100,000.

Adjacent to me is a much bigger city with about 20x the jobs and opportunities. I would need more like 900k to buy into there. Realistically to afford a home there we are talking about my household making more than 200k. Why so much? Because housing has got very expensive and interest is very high.

the areas where most people live, however, do.

nobody wants to live in trailer park in Mobile, AL.

The funny thing is: You're not wrong, you're just talking about it at the wrong level.

Individually, if you don't save and invest, you're gonna be screwed due to unpredictable expenses, inflation, and lack of runway for retirement.

But if you zoom out and look at a whole population, it's also true that tons of people are in such severe financial conditions that they can't save and invest, so your advice is something like "buy a life jacket" to someone who's already 10 feet underwater.

And if you zoom out even further, there's no way that we're going to solve severe wealth inequality through individual action. And especially not through investing, which helps you as an individual relative to other individuals, but also provides more options to the wealthy recipients/managers of the funds to extract wealth at a rate higher than your ROI, which accelerates the concentration of assets in the hands of people who already own a disproportionate amount of them.