I've had this discussion with many of my friends and colleagues. It seems like most people live pay cheque to pay cheque which is why services like Afterpay are so popular.
Thoughts?
I've had this discussion with many of my friends and colleagues. It seems like most people live pay cheque to pay cheque which is why services like Afterpay are so popular.
Thoughts?
@Jackson: There are definitely people who've bootstrapped themselves to success and deserve credit, but they're the exception not the rule. It's important to understand that there are many barriers they had to work against, and that life is influenced by which side of those barriers you happened to be born on. The so-called 'self-made man' who likes to take sole credit for their achievements doesn't tend to acknowledge the role of luck in his life.
We live in an incredibly lucky country, where every child born here (even the poor ones) is born an inch from the finish line. We should count ourselves lucky and show compassion to the unlucky, instead of broadly blaming them for 'bad life choices' that were often pre-filled at birth.
I would say your parents attitude has more to do with your outcomes than say if your family was just poor.
100%. Family isn't just the financial resources they can commit to your education, but the environment. If you grew up in a poor but industrious migrant family that valued hard work and education, you're more likely to succeed than if your parents were high, absent, or unemployed, regardless of background.
@SydStrand: Again, I agree. I was thinking about what @tsunamisurfer said, and I think in the context of the fact that we are so lucky to live where we do, as you say an inch from the finish line, is exactly why he blames people. People in the Congo have an excuse, people here not as much maybe. As someone who agrees with you, I can also understand why some people think that. For someone like me who grew up far from rich, I am actually rich well beyond my childhood expectations. While I wake up every day feeling extremely lucky, I also feel like I need to share my knowledge and experience with those less financially stable, however I find even basic rules people have trouble abiding by. To be sure, I never blame anyone for being poor per say, but I do see a lot of people struggling with delayed gratification, and maybe with agreeing to any change in lifestyle. I think this is down to a certain mix of straight issues with delayed gratification, stemming from either self medication, whether it be retail therapy (an affliction that we can all understand to a degree) or other, to also a pride in not wanting to cede to someone else's lifestyle, meaning that the lifestyle they had chosen to now was maybe somehow inferior. There's plenty of underlying reasons for this, probably thousands. The question is if 500 a week is enough for someone, but someone else needs 700, how do we manage that?
@Jackson: We shouldn't completely absolve people of their decisions, but this notion that 'poor people just need to live within their means' is petty and overly simplistic. If you grew up poor with no financial role models, then you're practically hardwired to repeat those mistakes. There's plenty of research to show that children, and even animals, raised in resource-poor, desperate environments tend to make impulsive decisions because they aren't used to planning beyond the short term, or counting on things that we can take for granted, like their next meal.
That being said, our compassion shouldn't be unconditional. If someone's offered help to turn things around, but continues to take hand outs and max out their credit cards, then ultimately it's on them. But we should at least offer it in the first place, before immediately writing them off as just greedy children.
If you grew up poor with no financial role models, then you're practically hardwired to repeat those mistakes
Totally agree, but does that mean someone who did should get 30% more dole, or that they should be educated, or there should be systems in place to make sure they spend money on necessities first? So many people are against having systems in place to prevent e.g spending on alcohol, saying its discriminatory to give money and not allow them to decide how to spend it. As an example, my parents lived most of their lives on the pension but still managed to pay off their house, while people complain the pension isn't enough. If there isn't equity, what benefit is there to being financially responsible? Maybe there should be a government run benefits system like with gold licenses, do well and cost the country less and get some benefit?
We shouldn't completely absolve people of their decisions, but this notion that 'poor people just need to live within their means' is petty and overly simplistic. If you grew up poor with no financial role models, then you're practically hardwired to repeat those mistakes.
People do need to live within their means.
There is just no way around that.
It is not 'petty and overly simplistic'.
Intergenerational wealth is mostly a myth. 70% of wealthy families lose their wealth by the second generation, and 90% squander it by the third.
This is one of many, many articles on the topic: https://www.nasdaq.com/articles/generational-wealth%3A-why-d….
@john71: Intergenerational wealth is not a myth, there's also plenty of people who haven't squandered it, e.g. The packers, Murdoch's, Rinehart's, etc. are not myths. Visit any charity and look at the family dynasties that are their major donors if you want any proof. Sure a lot of people squander their money, but starting off wealthy is the single most important factor in reaching that group. The fact that some rich people don't invest enough time in teaching their kids how to stay that way is their own problem. Some rich people hit it big without knowing why and others are too busy on their professional lives to invest the time
@john71: Correct. Dynastic wealth evaporates over time with some very rare exceptions, and those exceptions prove the general rule.
@Dogsrule: I think people who say this really don't understand some of the basics of statistics. If the 'general rule' as put forward by @john71 above is 70% squander it by the 2nd generation, that's still a 30% chance that you are going to live your entire life rich and not needing to work. Put those odds against making it in business, winning the lotto, becoming an uber investor, where the vast, vast majority, maybe 90% fail at least, and those odds are actually very good.
Also consider that according to my very quick real search on the topic, those stats are for people who have more than 30M dollars US. They aren't exactly the OPs target demographic. Sorry to say also that while I said I feel quite rich, I am still no where near that area. I would also argue that many of the people who aren't considered rich in those studies end up with 29M, mate they are rich to anyone in the pub
Yeah look it does, but honestly he has a point. I don't think it's fair to completely summarise everything he's saying as the whole truth, but I grew up in an incredibly large and poor family (9 people, 3 bedroom house and tremendously insufficient household income that's so low I won't even say it because it's embarrassing).
I'm currently at uni and likely to get a wellpaying Job from my degree but I only got here due to a lot of sincere hard work.
I know I'm going to get negged for this, but your birth conditions don't define who you are. It most definitely sets the cards against you but if you are serious (which I was from a young age even in high school), you can get out of it.
At the end of the day no one makes you be an alcoholic. I'm not judging people that are, but an unpopular truth is there are other ways out.
Most people in financial distress aren't poor. Most were just caught out by tightening loans (after the financial royal commission) or skyrocketing rents.
Then there is the usual bunch that fell on hard times. They might have underestimated an expense (holidayed in the USA with no insurance), followed bad advice, be conned or their circumstances changed (lost a job/partner/asset or gained an unplanned dependent).
They are usually trying their best. Calling them poor addicts with gambling problems makes them feel bad and you look like an idiot (I am sure you are not).
Poor people are poor because they make poor financial decisions
Spoken like a person who is either a teenager (hopefully) or never stepped out of their gated community.
I have had all the low levels of income as I was working my way up and I had to learnt he hard way how to budget, what is required and what is discretionary.
Good for you.
those decisions include but are not limited to :
I love how you start with 4 things that are literally addictions, not choices. You've clearly never had any issue with addiction beyond being a twat if you see alcohol abuse as a decision.
The financially prudent people don't do this.
Ok mate. Go look in the finance sector, lots of substance/alcohol abuse, and gambling too. But I guess that's fine because they're not poor?
You have a strange world view, but it's not uncommon for well off people to see their success as a choice, therefore people who are not successful have simply not chosen to be successful. And thus, classism is born.
I did when I was an apprentice but even then I saved 10% of my after-tax pay (and paid 20% board to Mum) but I was studying both the apprenticeship TAFE course and a Mech Eng associate diploma so I didn't have much time for a social life. After you've had to live that lean it's fairly easy when you start getting a decent pay packet.
NB: I've mainly been on fortnightly pay, sometimes weekly, never monthly.
I think monthly would be really hard. I know my GF would occasionally stop spending towards the end of the month (after paying mortgage, bills, etc).
I think it's just what your spending habits are. I have friends in their 50s that still run out of money before the next pay and always have but buy drum kits that they can't use because they live in an apartment and have 3 cats, a rabbit and pet mice and live in an expensive area.
No I don't
OzBragging.com.au
According to a recent survey just taken of the people in my immediate vicinity (n=1) the answer is no.
i don't live paycheck to paycheck…
i live one credit card payment to the next…
I live sesh to sesh.
Skate sesh?
I'm guessing toke sesh 🚬
I personally don't believe MOST people live pay to pay.
Some do not not the majority.
The papers love to print stories about people who cannot afford rent increases and have bugger all left after rent.
This makes great news but it is not the majority..
No you didn't. You wouldn't have gotten kicked out for not paying rent and you wouldn't have had to choose between eating dinner and paying your rent.
You did not live pay cheque to pay cheque. You had no essential expenses to pay for, you probably bought takeaway food and play station games with your play money. Someone living pay cheque to pay cheque only gets paid enough to cover their essential expenses like bills and food and has nothing left for anything nice, including but not limited to savings. Saying you lived pay cheque to pay cheque as a teenager living under their parents roof eating their parents food is incredibly insulting to people who actually do or have.
Thoughts?
Based on this, 50% of people live pay to pay in Australia.
about 60% of people
Where is the poll to settle this!! :D
I think OzBargain skews towards wealthy, it probably wouldn't answer the question.
In an ocean, we’ll find creatures that swim.
On land, we’ll find creatures that walk on land.
In the sky, we’ll find creatures that fly.
In the ghetto, you’ll find people in poverty.
In Canberra, you’ll find a lot of people working for the government…
In modern times, you’ll find people living in a mansion on a mortgage and drives a BMW, and find themselves financially “struggling”…
Thank you Confucius :)
In modern times, you’ll find people living in a mansion on a mortgage and drives a BMW, and find themselves financially “struggling”…
Very true, it's part of the human condition to strive, this is how people pull themseleve sout of poverty, but also how they stretch themselves when wealthy. E.g if you have a spare 200k and it's not invested, you are probably not being very smart with your money, however if you have suddenly need a new car, or to pay for an operation on holiday without insurance, you could find yourself having to make a hard financial decision about keeping something you worked hard for or losing it and resolving your problem.
Another way to look at it is they needed the mansion for their 5 kids, they needed a BMW because everyone in the street has one and they want to fit in (maybe because they already don't being from a foreign background). Who really knows? Every case is different
@Jackson: I just assume that 90% of people who "own" (read: lease with massive balloon payments) BMWs are teetering on the edge, for the sake of looking wealthy to their friends.
I don't get a paycheck, the money is sent via eft.
I want to upvote you, but you used the American spelling, so I can't in good conscience.
I can respect that decision, and am now upset at myself for using that americanisation.
Until a few years ago i had ALWAYS felt the simple facts are money is something we should openly discuss as it is something we all need and use daily. But in my time i have noticed it is something that is a sensitive and personal to most people.
The reason people 'live pay cheque to pay cheque' is largely because poor financial literacy is rampant in out society the amount of people that simply 'spend money they dont have' - ie Afterpay, Maxed credit cards, Z1P and maxed home loan capacity. Is insane….
Completely agree.
People who live pay by pay will always live pay by pay, they don't know how to save and know how to spend, and there's endless ways to spend in this world.
Anyone, even on the lowest income, I believe can save. My parents are living proof of it and I never understand when people cry poor about low level of government support. My mum is saving on the age pension, she still cant work out how to spend all the money.
live how you want, spend as much as you can, after all we can't take money with us into our wooden boxes in the ground.
+1
Spend as much as you can without going into debt? Or max out that too? Would you leave a little for your kids/partner/family/whatever?
I don't have any, so that makes it a bit of an irrelevant question for me.
Nobody to care for, nobody to be responsible for? Nobody to leave anything to? Nothing at all? Make sure you spend every last $ or the government will 😜
@fenikkusu: No partner, no kids. I fully expect my parents will predecease me. They're quite old. The exception would be some kind of traumatic death like car crash. I have willed everything to my niece and nephews, but it's not like they'll be left wanting if they don't get much, my brother is relatively well off.
Yes - most people live paycheck to paycheck
but here's the thing; for most who do, they are not dwelling on how little money they have - nor are they anxious every waking second about where their next months rent is coming from or how they're going to pay for tomorrow's meals.
They are simply content, happy and accepting of that lifestyle, and for those of us who like to save and penny watch, we will never understand that
There is no right or wrong way to go about life. Just do you
I have a few friends living pay to pay and they always spend the last 2-5 days before payday starving, scrounging and stressing because they can't afford food and when the payment arrives the first thing they do is celebrate the fact another fortnight was survived by splurging on something big.
It's working for them somehow but I can't tell whether this counts more as bliss or stress.
I once asked one friend why he didn't try saving and his reply was that he couldn't help it because if there was money in his account he spends it. He tried saving a few times but any slightly significant savings just turned into reasons to make more expensive purchases apparently. He couldn't understand why I put money aside when I was just going to get paid again later. When I said it could be emergency money, the reply was that he could just borrow from a relative and pay them back (I didn't try to argue that such a thing was just relying on someone else to have saved money for his own emergencies).
Ugh. Some people.
I live like that as a budgeting exercise, to prevent life style creep etc. But I have liquid assets if needed.
Don't actually have any figures. Just offering my personal experience.
We once had to do so, when I was on a scholarship of $1950 per month. Wife was volunteering as finding a job right after arriving in Australia is not that straightforward. We were renting a 2 bedroom unit for $1280 per month in a Melbourne nothern suburb. Around $300-350 for groceries. Probably around $125 for utilities. Rest is for myki (we didn't have a car) and for rare eating out.
We did this for nearly an year.
Finished my degree in 2018, but didn't have a cent in my account until mid 2019 as we ran into some health isssues.
Then in two years we managed to save a diposit for a house and will start building shortly.
Congratulations, I hope it goes well!
Thank you!
Good on ya!!
Besides saving, remember to invest. Just leaving money inside your savings account is not wise.
But don't you need some money in savings for a rainy day?
I find it very risky to put ALL your savings in investments
Nobody is saying to invest all. Some of it. You need to at least beat the inflation rate.
Anyone who has a credit card and isn't paying it off every month is living paycheck to paycheck.
Thanks professor.
Or they just forget to pay due to bad memory and management skills.
Can confirm, this 10/10 idiot has forgotten to pay his cc and has been hit with the fees.
BOM at least text me before its due now.
I would say a surprising amount live paycheque to paycheque
They don’t even bother saving anything then when they go into lockdown they complain they have no money.
Lockdown can happen at anytime in the current pandemic so you need to prepare for it.
People don’t though.
You think people put extra away when they were paid a lot more at the start of jobkeeper?
They probably did because we had the really long lock down but once the doors were open they were back out spending it all.
I read an article where someone was still paying for a bunch of streaming services while only having $1000 in the bank then saying what if something pops up like car trouble or hot water unit.
People don’t have their priorities in check and don’t understand what is a luxury.
Somebody say it with me. Buy *******, make life-changing wealth or stick with the old system where cogs make their bosses richer.
Change your life, change the world one country at the time.
https://youtu.be/tUM0MPLGkgI
If I told you that converting your AUD to Euros would give you life changing wealth, that wouldn't really make sense would it?
It isn't the function of currency to make you wealthy, if you were lucky to buy tulips at the right time, be thankful for your luck, and take your profits
I've made decent profits on crypto and I can 100% get behind this. Spot on.
When you’re wealthy, it’s easier to become more wealthy. When you’re not, it’s takes so much hard work and it’s very easy to become less wealthy.
Not my model, but I like it. Wealth is like a funnel with a long neck and you are a heavy ball spinning in that funnel. The more wealthy you are, the further you are from the centre of the funnel. Getting out of the long neck is the hardest thing to do, and many people spend all their life there. The more expenses you have, the heavier ball you are.
Surveys repeatedly show many people couldn't survive long if their (active) income stopped. That is, they have no passive income, nor savings.
Even those not living paycheck to paycheck are not that far from it.
Only a small percentage are financially independent.
Which is how the things should be until everything will be produced by robots and ai. But what would be people’s purpose then? Just consumption?
It’s easy to see if you think of it in extremes. Say everyone is wealthy and “independent “. No one has or need income. Why would anyone want your money, which are just numbers?
When I was growing up, my parents did live week to week. We never had money for holidays and all that stuff. Not to mention that they rented. No savings as well. When something 'happened' and they needed cash, our TV or stereo disappeared for a few weeks or months, then would appear again.
I don't. I am a great saver, my house is paid off. I didn't want to live like that. I made sure I had financial goals. I don't borrow money. I do have a credit card but I pay that off each month.
My sister, does live week to week and has no savings.
Wasnt it just nice that you were made to write what you did over the holidays and read it to the class? Everyone else went on interstate or overseas holidays and you went to the farthest Kmart 😢
I try that pay check to pay check now i live with less and not paycheck to paycheck if want some i think about for few days before buy if i still want it.
The question is if you suddenly lost your current income, how long can you survive while paying for all the essentials? If the answer is cannot, then it is living paycheque to paycheque
People live paycheque to paycheque because Australia is a neoliberal shithole.
It has an every man for himself mentality & (profanity) everyone else (we saw this with pandemic hoarding).
It is more than every man for himself. You don't even get to be your own man because the ATO has their pockets so deep in you.
Not sure why this needs to be a thread when you can google the answer is 40 percent
https://www.macrobusiness.com.au/2019/08/nearly-half-aussies…
That is terrifying TBH. I see a retirement crisis brewing.
People just expect to live pension check to pension check.
I keep a buffer, but try to live paycheck to paycheck while maintaining the buffer as a form of self control while living comfortably.
Once money is on the mortgage, there better be a bloody good reason for it to come off again.
But I budget for one of us not to work, so with us both working, budgeting like this is like playing on easy mode.
I used to live paycheck to paycheck, just young, dumb and careless.. Life is much more stress free now that I've learned to budget and not waste money.
What did you spend your money on?
Partying, the latest phones, clothes I didn't need etc.
what do they do with their old phones and clothes?
@Homr: Personally I'd sell the phones or give to a friend / family member, clothes ended up as hand me downs to brother etc. The partying was probably the most expensive part though, lot's of takeout food, booze, taxi's.. I haven't been like that for a long time now though.
@herecomestheoost: but how often do you party? once a week? that's only around $200 max a week isnt it?
@Homr: Now? Never. Back then all the time, several times a week.. I couldn't exactly break it down for you.. But I never had money come pay day.
@Homr: A night out can easily cost $500+
$100 for Uber because you’ll be paying surge prices
Drinks can cost a lot if you’re buying rounds for your friends/girls. My friend who used to go out a lot who had a girlfriend would still spend that much.
$20-40 for after club feed. Easily adds up
@catbug: You must buying rounds the wrong way. When you buy rounds, your other mates are meant to buy the next round. You're not meant to be buying rounds back to back
The max I spend on a night out is $200
$50 uber
$30 food
That leave $120 for drinks which is plenty. If beers are $10, thats 12 beers and that is plenty
No one who works full time and lives within their means in Australia should be living pay cheque to pay cheque. If you do, then the blame is on you, not society.
Full time minimum wage is $750 per week, take away $350 in rent, utilities, groceries, car expenses, phone, internet… then say you have a child?
Living paycheck to paycheck isn't some moral failing,
thats their fault for having a child and living in an expensive place.
People out here acting like you shouldn't take your current and future financial situation in to account before having kids lol
Sure, but how is $350 a week expensive?
@greatlamp: Exactly, Can't think of many places where you'd be able to get this significantly lower. I'm more interested in where the other $400 is going…
What do people spend on every week to live paycheck on paycheck?
Do they go out for the piss and ubereats everyday? $100 spent on entertainment a day?
Man I sure could could go some of those condor egg omelettes right about now
Agree mostly, although there are people who have bootstrapped themselves though. One guy I know has done well for himself with no tertiary education, while his brother is dead and the other God knows. They all came from the same 2 parents, but he was the eldest, so maybe had a just enough better run, or some slight genetic advantage, or something.
I would say your parents attitude has more to do with your outcomes than say if your family was just poor. Plenty of refugees come here with the shirt on their back and have raised doctors and lawyers. It's not a coincidence, they might not speak the language but they had enough education overseas, and enough drive when the arrived.