[yulker]

How does $2k spread across a couple of checks make people feel they were "COVID rich" is something I just can't wrap my head around. Even for someone with a low income this would amount to at most a paycheck or two extra

[JohnMakin]

I struggle adjusting my tone when responding to comments like this, so just know any snarkiness is purely accidental and colored by many years living in an extremely high cost of living area at a joke of a minimum wage.

Living paycheck to paycheck, truly, and I mean truly in that sense where you need to wait for checks to clear before buying groceries occasionally - is extremely common. When you live like this long enough, "big" costs start adding up. That funny sound in your car that you can't afford to get fixed gets worse. Your tooth hurts super bad, but can I afford a $1000 dentist bill? I'll just hope it doesn't get worse. Maybe your kid gets really sick, forcing you to take time off you cannot afford to (not everyone is salaried or has vacation/PTO policies), adding to the strain. You go to credit cards to stretch things out, but of course that has a limit to how far it can go, especially when you're barely treading water. Eventually you will drown, something has to break. What it is varies and will probably largely determine the long-term outcome of the situation.

Anyway, all this to say, there have been many times in my life where these nagging, lingering problems that caused significant strain and hardship in my life that I simply could not afford to fix would have been solved immediately with a few thousand dollars, or whatever "trivial" amount you want to put as a value here. $2000 can actually be a lot more than that when you consider interest and paying down a credit card debt. I can think of one very specific time in my life where $500 being loaned to me was the difference between where I am now and being out on the street, and that is not an exaggeration whatsoever.

The reason you cannot wrap your mind around it, and why this bothers me, is that comments like this come from people that truly cannot imagine how massive swaths of the united states, and more broadly live day to day - it comes from a position of enormous privilege, even if you may not realize/acknowledge it. To me, I struggle to imagine how this comment I am responding to can be made at all, but I know our life experiences probably differ in a drastic way.

[JohnMakin]

As a more personal note, and without responding to some other victim-blamy comments in the larger thread that kind of irritate me, the only way I got out of my situation was a big (to me, a similar amount as being discussed in this thread) financial gambling windfall that led me to being able to purchase a cheap vehicle and expand the hours I was able to work due to having semi-reliable (it was a cheap ford piece of crap that constantly broke, but it was something) vehicle. From there I was able to enroll in community college, which luckily was free-ish for the income I was at, which is way too low of a threshold. I could not qualify for any kind of government aid whatsoever despite living in "welfare state" CA because at $15,032 a year I was well, well over the limit of what qualified you for food stamp assistance or anything like that. Pre-ACA healthcare was completely out of the question and I amassed $200,000 in medical debt that sidelined me for many years before it fell off my credit report.

I am very lucky in that things panned out (relatively, I still deal with residual issues due to living that way for as long as I did, about 15 years) and I was somehow able to finish school due to traits I believe not many people are lucky enough to have. I don't believe at all that many people in this situation are there of their own fault, and I'd die on that hill, but I can only provide my own brief story and some really basic cost of living statistics that are very easy to look up. It's bleak out there.

[vladms]

I read the original reply as "how can extra 2k change your habits or expectations", your interpretation seems to be "how can extra 2k make a difference".

Only the author can detail on what he really means, but do you think the extra 2k would significantly influence the people's behavior on the medium / long term (I do agree that for many it can have a significant impact on the short term and really help them) ?

[hansvm]

It's something like 4 post-tax paychecks for people at minimum wage, even better if they weren't full-time (more common than you might imagine even amongst people trying to move up, since low-wage employers tend to shove hours down so that you don't accumulate overtime if they have to call you in suddenly, and they all want you to work the same busy hours, making truly non-overlapping jobs challenging to come by).

I've been that poor before (never _truly_ struggling like some countries experience, but unable to comfortably afford both food and a roof), and some other units might make that check make more sense:

- 4.5 yrs worth of rice, flour, or beans (the bulk of my diet by weight and by cost)

- 5 months of rent

- 5.5 yrs of electricity (almost all of which went to cooking or refrigeration -- heat was unnecessary unless it was under 0F outside)

- a new-to-me car, enough money for the parts that I'll inevitably have to buy to fix any used car shortly after I buy it, and enough gas to drive to work for a year

When you're struggling paycheck to paycheck, that's a life-changing amount of money. I'd already escaped that life by the time covid hit, but if I hadn't then that might've been my ticket out.

As to how somebody in better circumstances might be "COVID rich"? I can only speculate, but even in the middle class people tend to have a number of "essential" payments: health insurance, mortgage/rent, newish clothes for their kids, you should probably eat a vegetable once in awhile, .... People are living "paycheck to paycheck" in those more comfortable lifestyles, and going from $0 to $2000 in discretionary income is huge. That's a year of weekly date nights at someplace better than McDonald's, a year of monthly date nights at a pretty good steakhouse or other gourmet opportunity, kayaks and road-trip money for the whole family, a very nice clavinova and a few months of lessons, ....

In either case, I suspect the key to understanding is to compare that $2k (really $2.2k-$3.3k in equivalent income depending on relevant tax details) to $0 rather than to total expenses.

[IncreasePosts]

You might not understand how precarious many people's spending habits are. After all of your bills and necessities are paid, many people only have a few hundred dollars per month spare. So if you get $2,000 popped in your lap, that might be the equivalent of 9 months of fun time money for them.

[SoftTalker]

The weird thing to me is, that knowing full well how important every dollar is, most people in this sitution would blow that $2k on frivolities, rather than save it or try to make it last. It's part of the psychology of being poor. Money is something that never lasts, so when you have some, you're inclined to spend it immediately.

[throwway120385]

I've lived in places where that would be 6 months rent.

[jimmytucson]

It wasn't just the stimulus checks, it was also the increase in income from job hopping, seeing my 401k and brokerage accounts explode, etc. I'm not saying it was rational or that stimulus checks weren't a good idea, I'm just reflecting on my own personal psychology. Not surprised it doesn't match everyone's!

[ska]

> feel they were "COVID rich" is something I just can't wrap my head around.

I think that term ("Covid rich") isn't meant just for the checks, but for the general increase of disposable income.

If you are low income, $2-3k in checks can effectively be a pretty big windfall as people note in this thread.

If you were middle income, there was probably a bunch of discretionary spending on e.g. meals out, shows, vacations that you didn't spend compared to previous years. It's not hard to see that being an "extra" 5 figures for lots of families.

[conductr]

For higher incomes, people spend a lot on travel, the inability to travel for a period during Covid meant tens of thousands of dollars of available budget for other things. This is what these people used to do all their home remodeling.

On the lower end, assuming you were able to WFH the instant savings from not having to commute (gas, tolls, etc). Was a pretty big change to your budget.

Other things like childcare can be a significant expense for many families and it’s a huge change when kids were forced home and the expense was avoided. Some of these things came with reduced household incomes, layoffs, etc for other households. But if you were able keep your income and just reap the savings then you benefit. At first, before inflation kicked in, but since then if you’re income hasn’t increased ~30% or more since 2019 (very dependent on your locale) then you’ve probably been digging a hole the past ~2 years, unless you are a great with budgeting and cut back in real time as prices increased. My feeling is it’s been had to do for many people as most people don’t budget and I know for many income hasn’t grown enough to keep pace with inflation.

I’m pretty pessimistic about Covid economics/politics. My opinion is it should have triggered a global recession, likely worse than the financial crisis. There’s still a ton of inflation that needs to flush through the financial system. While we talked about flattening the curve of the virus, we really just flattened the curve of the economic fallout of such a large event. I think a period of austerity is likely going to be required. Rates and prices have a lot of people locked in their houses or out of home ownership, average vehicle age is at a record high, people are dining out less, even cutting back on their beloved Starbucks, etc so I think the signs of this are ramping up. I’m not quite sure how it plays out, especially with the US political leadership changes coming up; but I feel like the majority of Americans (at least) have some financial strains coming their way, likely uncomfortable changes will need to be made and will feel like a type of austerity to us.

[mulmen]

How does $3,000.00 become five figures?

Do you mean four or that four figures feels like five?

[chrisweekly]

citation needed by me (sorry) but a few years ago I was surprised by an apparently validated assertion that something like 60% of all US households would be unable to come up with more than $2k cash given a month's time

[conductr]

$2k is massive sum for most US households. Many are a flat tire away from bankruptcy, they lean on cash advances and their communities to help them through simple things like a flat tire.

I grew up kinda poor and lived this as a kid, my family was always helping or being helped by a neighbor or something. Through my friends and some extended family I knew these things were like a sign of our “class” and even slightly more secure people would never do them, it would even be a social faux pas to even ask for help. Now, at middle aged, I’ve done pretty well for myself and sometimes make other types of faux pas statements like “just buy a new car instead of dealing with that”. I have to be somewhat mindful that even a 10 year old used car is a huge purchase for many people. Even if it’s in good shape and can get another 5-10 years out of it, and would technically be the best move, it’s not viable if they can’t afford it or have to subject to some usurious loan.

TBH I generally like to just take the “it’s impolite to talk about money” approach unless I know the person well enough. Although I’m a financial professional so people tend to like asking my opinion/advice on a lot of things, even if I barely know them, I have found that I prefer to avoid those types of conversations altogether until I know you pretty well.

[whaleofatw2022]

I believe it. Happened to me once or twice when I was making under 50k/yr over a decade ago.

[jeffbee]

I think what you wanted to cite is "Financially Fragile Households", Lusardi et al, 2011. But, instead of getting the conclusion from the opinion page of the WSJ it would probably be better to read the paper and especially the notes by reviewers at the end of the article, particularly the comment of Pence which is almost a rebuttal.

[charlie0]

Me neither. I've just accepted that a majority of people are horribly bad at finance, what the reasons are, I don't care to find out. I'm sure it's a huge list of things thay are not solvable. You know what I mean of you've ever tried to help someone by lending them money.

[naming_the_user]

A lot of people are just financially illiterate. I grew up poor and the other comments here are super foreign to me. I agree that a couple of grand would be useful but not for buying toys, mostly for fixing stuff.

Especially the idea that money just disappears so spend it whilst you have it. That’s like saying your legs might disappear so cut them off now to avoid the surprise.

[LordDragonfang]

In addition to what the other commentors have said, regularly going out to eat or have a drink or two adds up quick, and being unable to do that during the pandemic forced people to save all the money they would otherwise have spent on that. This left people with a bunch of cash to spend on other things.

[whaleofatw2022]

There were lots of cases where covid unemployment pay was better than better than minimum/near minimum wage.