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Middle class & living paycheck to paycheck
CNNMoney ^ | April 25, 2014 | Tami Luhby

Posted on 04/28/2014 8:59:49 AM PDT by george76

About one-third of American households live "hand-to-mouth," meaning that they spend all their paychecks. But what surprised the study authors is that 66% of these families are middle class, with a median income of $41,000. While they don't have liquid assets, such as savings accounts or mutual fund holdings, they do have homes and retirement accounts, with a median net worth of $41,000.

...

Poor hand-to-mouth households, by contrast, typically have incomes of $21,000 and no assets. Families that don't live paycheck to paycheck have incomes of $51,000 and assets of $116,000.

Those living paycheck to paycheck have a tougher time weathering income shocks, such as illnesses or bouts of unemployment. The study found that they have to cut back their spending far more than those with a reserve they can tap more readily.

(Excerpt) Read more at money.cnn.com ...


TOPICS: Business/Economy; Extended News; News/Current Events
KEYWORDS: handtomouth; middleclass; paycheck

1 posted on 04/28/2014 8:59:49 AM PDT by george76
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To: george76

Living paycheck to paycheck, unless you are living on beans and rice, Is seriously irresponsible.


2 posted on 04/28/2014 9:03:13 AM PDT by cuban leaf
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To: cuban leaf
Living paycheck to paycheck, unless you are living on beans and rice, Is seriously irresponsible.

If you're not living on the edge . . you're taking up too much room.

3 posted on 04/28/2014 9:08:00 AM PDT by BipolarBob
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To: george76
This is the horrible Obama economy that the news media hides from most Americans

also the media hides that the gov banned lightbulbs

The media hides that the government owns 30% of land in the USA:


4 posted on 04/28/2014 9:08:24 AM PDT by Democrat_media (Obama ordered IRS to rig 2012 election and must resign)
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To: george76

Yea!and these Government parasites continue to steal more of our already cratered incomes by allowing unauthorized entry of illegal aliens into the United States.


5 posted on 04/28/2014 9:09:31 AM PDT by puppypusher ( The World is going to the dogs.)
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To: cuban leaf

Living paycheck to paycheck, unless you are living on beans and rice, Is seriously irresponsible.


If you are living paycheck to paycheck, you *should* be living on beans and rice for a while.


6 posted on 04/28/2014 9:09:32 AM PDT by lepton ("It is useless to attempt to reason a man out of a thing he was never reasoned into"--Jonathan Swift)
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To: lepton

Families that don’t live paycheck to paycheck have incomes of $51,000 and assets of $116,000.

Just found out we are seriously rich. Must be from all those years of saving and paying off our houses and paying cash for cars.


7 posted on 04/28/2014 9:12:05 AM PDT by sheana
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To: george76

Another Pulitzer prize winning CNN piece. When you really have nothing to contribute, reciting the obvious is all you have....unless you just make something up.

Status quo.


8 posted on 04/28/2014 9:12:12 AM PDT by EagleUSA
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To: lepton

If you are living paycheck to paycheck, you *should* be living on beans and rice for a while.


Exactly. Been there, done that. I remember when I was getting annoying calls from Amex because I owed $700 on my card and couldn’t pay it. Now I pay many times that amount every single month. And yeah, we were not eating like kings for a while.


9 posted on 04/28/2014 9:12:23 AM PDT by cuban leaf
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To: george76

I know people who make six figures and still live paycheck to paycheck.


10 posted on 04/28/2014 9:14:33 AM PDT by rightwingintelligentsia (Democrats: The perfect party for the helpless and stupid, and those who would rule over them.)
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To: george76
While they don't have liquid assets, such as savings accounts or mutual fund holdings, they do have homes and retirement accounts, with a median net worth of $41,000.

I think it may be worse than this if I understand the accounting behind the story correctly. Most of those homes are mortgaged. If you have $41,000 in equity in a home, you don't have $41,000, and nobody is going to write you a check for $41,000 when the bank forecloses.

11 posted on 04/28/2014 9:15:53 AM PDT by Billthedrill
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To: cuban leaf

What would be more responsible, living paycheck to paycheck and paying my mortgage or walking away from my mortgage with the ability to rent a better house in the same neighborhood and pocket $1,000 each month? Serious question. I realize I overpaid for this in the housing bubble when I was 25, but I think it is more responsible to pay the mortgage.


12 posted on 04/28/2014 9:16:28 AM PDT by wolfman23601
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To: wolfman23601

Walk away. That is the plan b you signed on to when you signed the mortgage. You said that if you could not make the payments that you would give them the house back.

This is why mortgages used to require 20% down (and what we did when we purchased our farm). It was irresponsible for lenders to give 100% or even 125% loans because when someone owes less than the property is worth, they are not incentivized to walk away. And if they do, the bank does fine when they sell the place.

They were asking the borrowers to just give back the homes with these ridiculous LTV loans. They signed the same papers you did. Give the house back and let them deal with their irresponsible loan practice. They bought themself a house.

Note, this is not possible in all states.


13 posted on 04/28/2014 9:20:31 AM PDT by cuban leaf
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To: wolfman23601

SOMEONE pays the debt.

I have always felt that I should pay it if I incurred it.

In other words, if the house doubled in value I wouldn’t give half back?


14 posted on 04/28/2014 9:21:55 AM PDT by LucianOfSamasota (Tanstaafl - its not just for breakfast anymore...)
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To: wolfman23601

Depends on how you look at iniquity on the part of banks and appraisers.

I was one of the people warning folks with deaf ears about why there was going to be real estate crash, and the long term nature of it.

Your financiers knew what I knew when you bought the house.

They absolutely knew that the market was going to correct itself eventually.


15 posted on 04/28/2014 9:23:03 AM PDT by MrEdd (Heck? Geewhiz Cripes, thats the place where people who don't believe in Gosh think they aint going.)
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To: george76

Somebody at CNN apparently thinks this is news.


16 posted on 04/28/2014 9:25:58 AM PDT by Buckeye McFrog
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To: cuban leaf

Note, too, that when you do this, your credit rating takes a tremendous hit.

You have to debate with yourself and your family the pros and cons of this approach.

Just be careful out there.

CA....


17 posted on 04/28/2014 9:36:18 AM PDT by Chances Are (Seems I've found that silly grin again....)
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To: cuban leaf

We were childless when we bought the house and could afford it while cutting back on other things. Then I got a raise and it was comfortable. Then we had a child and started sinking $1,000 per month into childcare/preschool and each subsequent raise has been cancelled out by increasing payroll deductions (first the payroll tax hike and then Obamacare inflating our medical insurance). In August we will be getting most of that $1,000 back as our child enters Kindergarten. It is kind of a moot point now as long as we both keep our jobs between now and August then we can finally start saving some money.


18 posted on 04/28/2014 9:38:48 AM PDT by wolfman23601
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To: george76

CNN Newsflash-Those with no money are broke!


19 posted on 04/28/2014 9:43:24 AM PDT by VRWCarea51
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To: george76

I went nearly two years on oatmeal, beans, rice, and one egg a day. That’s what responsible people do if they can’t keep expenses below income otherwise.


20 posted on 04/28/2014 9:48:56 AM PDT by Pollster1 ("Shall not be infringed" is unambiguous.)
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To: george76

” The study found that they have to cut back their spending far more than those with a reserve they can tap more readily.”

Where is Captain obvious when you need him?


21 posted on 04/28/2014 9:55:48 AM PDT by READINABLUESTATE ("If guns cause crime, there must be something wrong with mine." -Ted Nugent)
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To: cuban leaf
"Walk away."

If the bank auctions the property and gets less than you owe, you still owe the difference, even though you no longer have the house.

A better scenario is to put the house on the market. If it won't fetch enough to pay off the loan, then try to convince the mortgage holder that a short sale is in their best interest.

22 posted on 04/28/2014 10:07:23 AM PDT by DannyTN
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To: MrEdd

The 2007-2008 financial crash is proof those with MBAs are as stupid or naive as the rest of us. Mortgage backed securities based on the assumption property values cannot go down - when all assets can devalue - was either stupid, naive or deliberate deception.


23 posted on 04/28/2014 10:07:28 AM PDT by tbw2
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To: Chances Are

Note, too, that when you do this, your credit rating takes a tremendous hit.

You have to debate with yourself and your family the pros and cons of this approach.

Just be careful out there.

CA....


Yeah, that is true. I don’t even think about for my friends that were doing this kind of thing in Seattle because we’re talking about coming out hundreds of thousands of dollars ahead in some cases. It’s kind of like giving up 20k in credit to save 200k. It’s worth it.


24 posted on 04/28/2014 10:08:49 AM PDT by cuban leaf
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To: Pollster1

live a little, eat two eggs.


25 posted on 04/28/2014 10:09:32 AM PDT by RitchieAprile
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To: wolfman23601

My wife finally quit her job and it had very little financial impact on us. It actually costs a lot of money for both husband and wife to work outside the home.


26 posted on 04/28/2014 10:09:51 AM PDT by cuban leaf
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To: RitchieAprile

Back then, two eggs would have been too expensive, leaving me with no cushion. Now I live more than a little (and still spend significantly less than I take in).


27 posted on 04/28/2014 10:14:35 AM PDT by Pollster1 ("Shall not be infringed" is unambiguous.)
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To: george76

People need to save at least ten percent of their earnings (excepting for special situations of course). People with very low incomes can often save a little each week or month. It adds up over time.

There is something missing in the education of the young if kids grow up without learing how to save some of their money.

(Perhaps their public schools are wasting too much time teaching our kids all sorts of sex?)


28 posted on 04/28/2014 10:16:12 AM PDT by faithhopecharity ((Brilliant, Profound Tag Line Goes Here, just as soon as I can think of one..))
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To: george76

My son-in-law and family is living from pay check to pay check and he is making a lot more then $41,000. Daughter can’t find a job and she has a Master’s degree.


29 posted on 04/28/2014 10:16:41 AM PDT by Vinylly (?)
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To: george76

41K??

Who they kidding?

After all the taxes what’s that? 28k??


30 posted on 04/28/2014 10:29:42 AM PDT by dragnet2 (Diversion and evasion are tools of deceit)
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To: DannyTN
If it won't fetch enough to pay off the loan, then try to convince the mortgage holder that a short sale is in their best interest.

Make sure to tell the mortgage holder you will continue to maintain the property to the best of your ability. Better yet, ask them about a HAMP modification, and keep a copy of all of your correspondence. It will come in handy if you need to write your Congressman, or contact the state Attorney General's Mortgage fraud task force.

31 posted on 04/28/2014 10:48:57 AM PDT by Night Hides Not (For every Ted Cruz we send to DC, I can endure 2-3 "unviable" candidates that beat incumbents.)
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To: george76

The great melt down of a few years ago removed many of these pay check to pay check people from the so called middle class ranks.

Would it be a safe bet that in many of the families now living on pay check to pay check have a new or recent I Phone or similar Smart Phone for every member of the family and an expensive family monthly service, plus a smart tablet for about every member just to keep up with their extensive social media sites?

Do they have one of more large screen HD tvs with the most expensive cable/satellite and internet service available in their homes.

Do they download movies as fast as they come out for multiple viewing on their smart phones, pads and other digital processing/display units and up load and down load massive amounts of so called personal photos from social media and their own creations.

They contribute a minimum if anything to their 401k’s or IRAS.

They have zero educational funds for their kids.

If they donate to a church, it might be $5 every Easter or Christmas.

They have no problem walking by a Salvation Army kettle trying to raise money for food in their areas.

They were for Obama care until they found out they had to pay for the increased services most don’t need.

They stop at Starbucks every morning for an expensive coffee and some sweet dessert instead of brewing their own coffee and preparing a good breakfast for everyone in their family at less cost then their Starbucks daily bill.

Last but not least, if they post on Free Republic, they are Freep Loaders, and never contribute a penny, because they “don’t” have any money to spare.


32 posted on 04/28/2014 10:51:55 AM PDT by Grampa Dave ( Herr Obama cannot divert resources from his war on Americans!)
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To: george76

That democrat recovery program is just kicking a$$ I guess.


33 posted on 04/28/2014 10:57:54 AM PDT by Vaduz
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To: george76

The key point here is that American prosperity has been declining for a long time, since the first Bush, and that massive debt, public and private, has kept living standards from falling much until the collapse in 2008. Had it not been for increasing personal debt, the Clinton years would have not have seemed as good economically as they did. Same with the Bush years, but add massive gov’t debt to that.


34 posted on 04/28/2014 11:01:32 AM PDT by Monmouth78
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To: Monmouth78

Good post.
Dave Stockman’s book indicates the number of “breadwinner” jobs in the US has been declining since 1998.

However the Democrats understand how to win national elections based on massive debt and the voting core of the Entitlement Army.

The party will continue until the markets someday start puking on our debt.


35 posted on 04/28/2014 11:09:25 AM PDT by nascarnation (Toxic Baraq Syndrome: hopefully infecting a Dem candidate near you)
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To: Monmouth78
The key point here is that American prosperity has been declining for a long time, since the first Bush, and that massive debt, public and private, has kept living standards from falling much until the collapse in 2008.

You bet...Some acts surprised that people making 41k per year have no assets, savings etc...Private sector wages have been stagnate for 15+ years and millions then had their hours and jobs cut, slashed or just eliminated, not to mention losing all their benefits medial etc...

All this while on the flip side millions of retired government public servants receive *double* what the 41k median income workers earn working. ??

And these people act surprised by what's happening?

This is get much worse....Bet the rent.

36 posted on 04/28/2014 11:19:29 AM PDT by dragnet2 (Diversion and evasion are tools of deceit)
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To: george76; mickie; pax_et_bonum; flaglady47
That 41K figure....I presume it's before taxes....and I just don't mean federal income taxes....everyone knows the litany.....state taxes, county taxes, town taxes, school taxes, water district taxes, phone taxes, food taxes, etc. etc. and so forth.....let's get some realistic figures in these articles.

But that might mean some research and onerous number-type work for the journalistas, wouldn't it.

Leni

37 posted on 04/28/2014 11:32:23 AM PDT by MinuteGal
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To: dragnet2

I find it infuriating that some conservatives, mainly old baby boomers say stuff like “forty thousand is good money, why are these people complaining.” Forty thousands is not good money in most parts of the country. It’s enough to pay for the basic necessities of a first world lifestyle with nothing left over to save. Making 40 a year is like making 15 a year in the 80’s.

“Private sector wages have been stagnate for 15+ years...”

This is the most important fact in any discussion of America’s economy. Conservatives better come up with a plan focused like a laser on making incomes rise for the broad middle of Americans or conservatives will disappear as a major force in American politics as the baby boomers die off.

Public employee pensions are too high, but focusing on government workers is reminiscent of the crabs in the barrel pulling back the ones closest to escaping. Most people are going to ask “why are private sector workers paid so little” when conservatives start complaining about public sector salaries. Some conservatives give the impression that they want everyone in America to be working under the wages and conditions of WalMart “team members” and that anyone who wants better is a spoiled, entitled communist. That kind of attitude has to go if conservatives want to get enough votes from younger Americans to stay viable.


38 posted on 04/28/2014 11:43:23 AM PDT by Monmouth78
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To: Monmouth78

For the longest time on this site, many global free traders came out of the wood work to deny wage stagnation existed and to promote that off shoring jobs was a good thing in the grand scheme of things. They didn’t listen back then (before the 2008 collapse) and most of them don’t listen now. The reality of the situation unfolding has at least quieted them down some.


39 posted on 04/28/2014 1:31:49 PM PDT by Gen-X-Dad
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To: Gen-X-Dad

Yep. I’ve been reading FR since the late 90’s. During the W Bush era, whenever someone posted an article about how the official unemployment figures were a crock or that incomes were rising slower than inflation, most Freepers dismissed the truth as anti-Bush propaganda and insisted that the economy was doing better than ever. Anyone who told the truth then was called a shill for Democrats.


40 posted on 04/28/2014 1:49:59 PM PDT by Monmouth78
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To: Grampa Dave

One can forgo all those electronic gadgets and still not have enough money left over to pay for rent, a mortgage, and education, a car, a new business etc. Look at the numbers involved. Rent on a one bedroom apartment is $1000 where I live. A smart phone costs a few hundred and comes with a two digit monthly bill. Do the math, your number don’t add up. All the electronic crap most young Americans have might pay for a couple months rent or mortgage.

This idea that because people today have smart phones, they are not really poor or wouldn’t be poor if they just made better decisions is false. It’s like saying that a person in the 1930’s who owed a gramophone or went to the movies every week could not really be poor.


41 posted on 04/28/2014 2:05:38 PM PDT by Monmouth78
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To: Monmouth78

I also have been on this site since the mid-90s and was in the pro wage stagnation camp trying to get the “greed and stupidity” crowd to pay attention to strategy (i.e. China using their honey pot of labor to capture our manufacturing) vs. profit is everything. Every system needs to be balanced for the long haul. Short term thinking has led us to this very predictable outcome.

You also were very astute in pointing out why the GOP is losing the younger voters as their message is “we got ours, what is your problem, suck it up” while they systematically destroy what is left of the economy for entry level workers through outsourcing, insourcing illegal immigrants, and automation. I have seen this up close and personal while trying to help my twenty-somethings navigate the current landscape. If the GOP has any hope in the future, they need to quit drinking the global-free-trade financial-class kool-aide and start focusing on Main St. vs Wall St.


42 posted on 04/28/2014 2:16:54 PM PDT by Gen-X-Dad
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To: wolfman23601
If you have room in your house, get a roommate to pay some rent. It suck to have a wife and kid then share the house. You can find a mid 20s woman or an older one that needs a good safe place to live. It might add $ to your monthly income. If your married, let your wife choose the renter. Its not a great option but would help.
43 posted on 04/28/2014 2:58:28 PM PDT by wgmalabama
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To: cuban leaf

I do not get a “paycheck” per se....but as a small business owner...I ain’t got nothing to spare.

In fact I stood in line at the grocery store last night and it took all I could stand not to burst into tears at the checkout. The lady in front of me had a government card too....man was I pissed off then. That’s my money feeding her & her kids.

I don’t want to be on the government plantation for food, medical, heat, water etc...

But damn...it gets harder every two weeks to put low grade food in my mouth.


44 posted on 05/01/2014 8:25:24 PM PDT by EBH (And the head wound was healed, and Gog became man.)
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To: george76
It's no wonder. They need more debt/revenues, but there's no other full vein left in society to stick and drain for them.

Leviathan (Uncle Sam employs more people than you think)
National Review ^ | 02/03/2011 | Iain Murray
"...nearly 40 million Americans employed in some way by government."

About "70 million" people are receiving good incomes but are also steeped in debt and can't borrow more for big ticket items. Meanwhile,...

More Than 101 Million Working Age Americans Do Not Have A Job
http://www.freerepublic.com/focus/f-bloggers/3005481/posts

Heavy Hitters: Top All-Time Donors, 1989-2014
http://www.opensecrets.org/orgs/list.php

American Fedn of State, County & Municipal Employees $60,949,129 [Democrat] 81% [Republican] 1%”


45 posted on 05/01/2014 9:03:47 PM PDT by familyop
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To: rightwingintelligentsia

My wife has had clients that were making 7 figures, living paycheck to paycheck, and going bankrupt. Not joking. The private school tuitions, new M-Bs every year, nannies, gardeners, big mansion in the best part of town, $30k shopping sprees at Saks and Nieman-Marcus, expensive European vacations - well, pretty soon it all adds up.


46 posted on 05/01/2014 9:22:18 PM PDT by FreedomPoster (Islam delenda est)
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To: rightwingintelligentsia

Not quite paycheck to paycheck but we pay for private school and had a child in a serious accident that racked up some medical bills (because I pay mine) and the usual government stealing.


47 posted on 05/02/2014 5:50:22 AM PDT by Resolute Conservative
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