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Proud to be at uncle D
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Where are my swing traders at??
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Does anyone put money into CDs anymore?
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SCARED MONEY DONT MAKE MONEY. BUY NOK 🚀🚀🚀🚀🚀
Rising Star
Here we go again.
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Chief
Yes
Normally, the phrase “living paycheck to paycheck” connotates that the person has no other choice. They need to spend all they have to meet the basic standards of living for themselves and their families. To me, folks that have the funds to meet a comfortable standard of living and have the option to save, but choose not to, are not truly living “paycheck to paycheck”. They are spending irresponsibly.
Absolutely not. Framing it like this would be insulting to people who actually live paycheck to paycheck (…I know you’re just asking the question, so I’m not criticizing you). If you max 401K + HSA, you are saving $24K a year…that’s like half of what an average household takes home in a year.
Yeah it also refers imo to blowing all your money and not saving, so OP isn’t living pay check to paycheck but it’s also not insulting as the term refers to both people in lower income levels AND people who do not budget properly, depending on the context
A helpful framework is the 50/30/20 approach. 50% of income to required expenses (rent, insurance, utilities, groceries), 30% to lifestyle expenses (cell phone, streaming subscriptions, vacations), and 20% saving/investing.
In that framework, I would say you are not paycheck to paycheck, as your 401k and HSA contributions are part of that 20%.
However, I would ask if you have a 3-6 month emergency fund in cash and have paid off any high interest debt (6%+). If not, would focus on that first.
A modified approach I use here is you consider the 401k and HSA max out as essential, with 20% investing on top of that
Dave Ramsey’s ‘zero based budgeting’ says every dollar should be given a task and ending up with 0 is the goal. If you’re covering expenses, living your life and putting away into savings/investments then I don’t think it’s necessarily a bad thing that you end up at 0. The last few days before payday are always tight for me but I put 30% of my net income straight into investments so I don’t feel bad about it. It would be a different story if those last few days were tight and I hadn’t paid myself first, however.
I thought it was inferred that you are not living paycheck to paycheck.
For clarity, no, you are not living paycheck to paycheck.
This is how basically all tech workers end up feeling like they live “paycheck to paycheck”.
Especially when they take out ESPP, 401K, FSA, Childcare Savings account, and their stock / bonus doesn’t come regularly.
Chief
Right. They’re completely disconnected from the reality that millions of Americans live every day, where a car repair or accident or even a simple doctor visit can derail them completely.
Having to dial back your 401(k) contribution from $61k to only $40k is not “paycheck to paycheck,” and it’s tone deaf and insulting to insinuate otherwise.
Enthusiast
If you're saving money for retirement or have savings in general, you're not living paycheck to paycheck.
I find it a bit ridiculous that people think they are living paycheck to paycheck after maxing out all retirement accounts, investing in child’s savings and purchasing company stock. Living paycheck to paycheck means your expenses are 100% ( or very close to it) of your take home pay. If you are investing any money, you aren’t living paycheck to paycheck
I don't know your age, but here are some statistics for you to compare your current situation against:
The median salary for a 30yo is <$50k.
Only ~41% of U.S. citizens contribute to a 401k.
The median 401k balance for someone 25yo-34yo is <$20k.
So I think you are not living "paycheck to paycheck"
Sources:
- https://dqydj.com/average-median-top-salary-by-age-percentiles/
- https://www.personalcapital.com/blog/retirement-planning/average-401k-balance-age/
Homeless? I could never put another dime into my 401k and still get $16 EVERY MONTH, speak for yourself
I think most people interpret “paycheck to paycheck” as struggling to survive. If all your money is allocated to a specific purpose - be it food, investments, entertainment etc. - and you end with 0; then no, you’re not living paycheck to paycheck in the way that most people interpret it.
If you don't have enough cash to cover a minor emergency, you're living paycheck to paycheck. Would a visit to the ER scare you that you won't be able to foot the bill? Would a broken down car be a cause for great concern?
Building your retirement account is great but having an emergency fund is important as well.
That is called a zero dollar budget, not living paycheck to paycheck. You are spending what you need and saving the remainder, while paying yourself first.
All of those are good habits to have.
No, you’re not living pay check to check. If you’re maxing out 401K and retirement, plus I assume that you have 3 months expenses emergency fund, no. You have the ability to scale retirement down when needed. Paycheck to paycheck is when you can’t care for a small emergency without using a CC/loan and don’t have ability to save for a rainy day.
Enthusiast
No.
Lol definitely not paycheck to paycheck. If I ever see someone say this trash to me who is obviously making significant amounts of money legit slap em on the face.
Living paycheck to paycheck is synonymous for literally surviving on your last dime not being able to contribute to your full retirement lol the amount of privilege I see in this app is crazy.
I hope people can humble themselves by volunteering at a homeless shelter or just something.
No? That’s just zero sum budgeting. You’re choosing to invest that money. It’s a smart decision, and you should do it, but you don’t have to. Paycheck to paycheck means you only have enough for necessities of survival. If you have the latest iPhone, you aren’t living paycheck to paycheck.
Pro
What? I know a lot of people who live paycheck to paycheck who have the latest iPhone…….do you know how Americans live? Lol
No. You’re living paycheck to paycheck if you can’t pay this month’s electric bill until you receive next month’s paycheck, and are unable to save anything for an emergency or for retirement.
No, but it’s always a good idea to have enough liquid assets to address any immediate needs. You’d be surprised how many people on the app would struggle to maintain for more that 30 or 60 days if they lost their job.
No.
Especially if you don't habitually draw down the HSA but keep the stack of medical bills so could draw that much tax free in an emergency
That how it felt when I first started working, at only 70k maxing 401k didn’t leave much discretionary spending. I wouldn’t say paycheck to paycheck since it was by choice and could easily change my circumstances if I wanted. However, after pay raises and promotions my discretionary money started to grow. Now, I am working to grow a brokerage account and spend on things I like all within reason.
Pro
Technically no but it may still feel like it at times especially if you don’t have an emergency fund. Your 401k is not easily accessible so if you were to get laid off withdrawing from that during the period while you’re looking for your next job would be rough
Yes. But It would be foolish to have all your money ONLY in investments that are difficult to access without high penalties.
No one should do this.