Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Again you just can't see the forest thru the trees. Amazing how you feel you can tell people this is the choice you should take. Wow what an ego.
Budgets shift depending on due dates of bills and where they fall to pay periods. If I get paid weekly I follow a schedule based on my due dates and pay dates. Moving to a twice a month pay period I can no longer follow that old system. Especially since I keep minimal funds in a checking account.
Please since you know everything write a book and we will all watch as you fail to sell a single copy.
There really is no hope for you. Keep posting your nonsense.
What you have described is an inability (or unwillingness) to manage your cash flow, and for you, being paid your annual salary in 12 rather than 10 paychecks would help you to solve your cash flow issues. But from a purely financial perspective, that is a sub-optimal solution.
If possible, one will be better off by accelerating their receipt of cash.
Dr. Thomas Sowell said something to the effect that people with high time preference, that is, they would take a smaller reward if they could get it NOW, are low class or tend to become so, while people with low time preference, willing to wait for a bigger reward, are high class or tend to become so.
The people with good jobs who live paycheck to paycheck simply never learned to save, it's reasonable to be paycheck to paycheck in your first professional job right out of college, say, for the first 6 months or so, but if you start saving from the get-go, even on a modest salary one should have some reserves after 6 to 12 months.
It boils down very simply to what the old Marine DI said: "Discipline, lads!" That and a bit of ability to do 4th grade maths.
Dr. Thomas Sowell said something to the effect that people with high time preference, that is, they would take a smaller reward if they could get it NOW, are low class or tend to become so, while people with low time preference, willing to wait for a bigger reward, are high class or tend to become so.
<<SNIP>>
The ability to calculate the discounted present value of a future cash flow and compare it to a current cash flow is in comparison, a decidedly high-class activity. Taking the current payment OR the delayed payment may be the optimal decision, but unless one understands TVM, they won't KNOW which is the optimal decision.
Later, due to other issues, we did have a time where we were not making it from check to check and sometimes struggled to find money for gas to get to work or groceries until the next paycheck arrived. But that had to do with a bad investment and some health problems that resulted in my wife managing our finances when she was unable to do so, than we couldn't actually make it check to check.
I do not worry about it overly much. The fact is you are going to spend all of your money one way or another. You can chose to live well now, or later. You can try to leave money for your kids, or help them now and leave them very little. I am glad we sent a lot of the money we did then, we had some marvelous adventures, that I could not now participate in because of worsening knee and back problems. Still waiting to learn whether they can ever make me better, but if not, it is a good thing I did all the things I did and enjoyed them while I could. As for the kids, I would much rather see them enjoy the fruits of my labor than leave them money to buy a car when they are 50 or 60 and already established on their own.
We have a little savings now, which is prudent for emergencies or employment issues or the like. Sometimes we borrow form tat savings between checks, sometimes we add to it a little bit. I am certain somewhere in the next several years, an emergency will arise and we will be back to starting over again and we may well end up living paycheck to paycheck at times, especially if we want to set aside money to build savings.
People who expect their purchasing power to be lower in the future - as I do - might not want to part with money.
This thread kinda sounds like my sister. After her divorce, she had about $500,000.00 in the bank and various stocks. She remarried a guy that was a sales manager for one the largest car dealerships around. He was making pretty big money- mid 6 figures a year. He ended up getting fired because he couldn't keep his hands off of the secretaries. Five years later, everything they had, house, cars, cash, was gone and had over half a million in credit card debt. Seems he turned to drinking and playing big man on campus by buying the house drinks all the time. He ended up dead from his drinking. She now lives in a low income housing project and lives off of SS. This was a local socialite that knew everybody by first name basis that was anybody in town. They no longer call her or talk with her. So yeah, there are a lot of stupid folks out there. The family chatted with her often about it before it hit bottom but she had to do it her way.
The ability to calculate the discounted present value of a future cash flow and compare it to a current cash flow is in comparison, a decidedly high-class activity. Taking the current payment OR the delayed payment may be the optimal decision, but unless one understands TVM, they won't KNOW which is the optimal decision.
The understanding of TVM is not of much practical import to a burger flipper who gets paid next week and needs to pay rent this week. The burger flipper is screwed regardless of understanding.
I read the articles about how 40% of people or whatever can't put together $500 to cover an emergency.
I find that hard to believe since I've also read that the median checking account balance is around $3000.
Personally, I stress out that I can't save 50% or more of my paycheck. As it is, we save around 20%, which is what all the personal finance stuff I read say you "should" save. Of course, most personal finance stuff is targeted at people well above median income, one of the most frustrating things for me. It's always, "save 25% and retire early! Yes, you can live on $5000 a month! It'll pay off when you retire at age 51!"
What you have described is an inability (or unwillingness) to manage your cash flow, and for you, being paid your annual salary in 12 rather than 10 paychecks would help you to solve your cash flow issues. But from a purely financial perspective, that is a sub-optimal solution.
If possible, one will be better off by accelerating their receipt of cash.
Anything takes an adjustment, but once you adjust it is manageable. When we jumped form 24 checks to 12, it seemed impossibly difficult, then when we went back to 24 it was hard to adjust again, now we get 26 and it took another adjustment. Actually, 26 made things kind of easy in a way. We budget to 24 checks and the extra 2 are savings.
It's always, "save 25% and retire early! Yes, you can live on $5000 a month! It'll pay off when you retire at age 51!"
I am 54 and do not want to retire. Not yet anyway. Glad I used the money to have fun instead - before my knee failed.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.