Many people who live payday to payday will be the types of people who if they had there pay doubled would adjust into the same payday to payday model.
In general these will be young people who are out to enjoy life and whilst many adapt a more moderate balance lifestyle, there are always some who carry on.
Certainly with the lack of incentives for savers, this certainly does not help motivate people and why should it.
What I would be interested in is a graph of fiscal behavour done per age groups and fiscal income. Also if they are single or married or have children. Then I believe you would see a more measurable trend.
Though it is worth bearing in mind credit card companies prefer people who live like this as they make them more money than not and with that is it a testiment to how well credit card marketing is actioned I do wonder.
> "Many people who live payday to payday will be the types of people who if they had there pay doubled would adjust into the same payday to payday model."
This is an audacious enough claim that citation is needed. It also smells a little like fundamental attribution error (i.e., assigning behavior because is is the nature of the individual, rather than situational).
>Many people who live payday to payday will be the types of people who if they had there pay doubled would adjust into the same payday to payday model.
Yes, only in the first case they buy mostly essentials and they are fucked if they have some emergency, where in the second they buy more stuff, can take of their children more, and can use some of their paycheck (or the next one) if a need arises.
I don't care much for the morally scathing undertone of the comment.
>In general these will be young people who are out to enjoy life and whilst many adapt a more moderate balance lifestyle, there are always some who carry on.
Spoken like a middle or upper class person who has never come in contact with the large swaths of poor people out there before, or if he ever had, has long forgot all about it.
The US is like a third world country job-wise and living conditions wise in many places. I've been to all, from Mississippi to South Dakota to Georgia and Alabama to Idaho -- and I've seen and spoken to people in similar situations all over, from NY to Seattle.
Living from paycheck to paycheck is not about some ...hipsters ("young people out to enjoy life"). It's about the declining middle class and the new masses of poor. Including millions upon millions of blacks and latinos.
Considering that the top 1% earners captured 121% of all income gains during 2009-2011 (yes, 121%, that means the other 99% of people's income went down)[1] it's also possible that many of these people used to be able to save money every month and not live hand-to-mouth before the recession and the sorry-excuse-for-a-recovery, but that their declining real incomes have squeezed their savings margins down to nothing.
> Many people who live payday to payday will be the types of people who if they had there pay doubled would adjust into the same payday to payday model.
Yes, the less surplus income people have, the greater is their marginal propensity to spend.
> Certainly with the lack of incentives for savers
The US tax system has such extreme incentives for saving and investment as opposed to spending that any statement that starts this way is worth nothing but a laugh.
Do you mean aside from the inherent motivation of being able to weather the small financial storms of life and generally being able to build wealth and have significantly more options available to you in many parts of your life?
Paycheck timing is nothing new in the retail business, and it's used by virtually all of the big retailers to roll out promotions, product refreshes, new lines, etc.
Traditionally speaking, paycheck timing was used by retailers catering to low-income segments -- especially those on food stamps, and those who buy groceries on extremely predictable cycles (by necessity). But what's interesting, not to mention troubling, is that this trend is proliferating up the socioeconomic ladder. It's been going on for awhile now, dating back to before the 2007/8 crash, though certainly made a lot worse ever since that downturn.
Most people that spend their full salary do never put more than 20$ of gas at a time. At the end, they spend around the same amount than others, but they seem to prefer to go the gas station many times instead of just filling up the tank.
When gas prices are volatile this actually makes sense. It's the same principle as "dollar cost averaging" when you buy stocks. Purchase a fixed dollar amount, and you end up buying more when the price is low, and less when the price is high, which is what you want to do. Therefore when I buy gas I stop at $25 unless I have a coupon or I'm somwhere that prices are significantly lower than where i normally buy (prices vary by $0.50--$0.75/gal within a 50 mile radius).
This is a fair point, but more often than not people living paycheck to paycheck aren't as familiar with dollar cost averaging and are probably just buying in $20 amounts because that's how much cash they have at that time.
The OP also said it was based on 5+ years worth of data which probably means it is less about gas price fluctuations and more about buying habits.
That would a case of people doing this to counter volatile prices if people also took advantage of the quite low gas prices they chance upon to fill it their car up completely.
But what the article says is that they don't put more the $20 at a time, period.
Such a behavior wouldn't see any advantage given volatile prices, because in the end you end up paying the same (you pay lower at some times, higher at other).
Which is the article points too: that they see the guys doing that end up paying the same amounts as the guys filling it up normally.
So it's not the volatile prices that get people doing that, it's perhaps a false idea of saving money, or that they infact do not have that much lying around and try to get to the end of week accounting for any emergency.
Also if the probability that your car is going to breakdown before the tank is empty is significant it doesn't make sense to fill up. At a certain point the fuel may be worth more than the car.
This has another benefit as well - you're not burning more gas just to carry around gas that you're going to use later. If you had a 20 gallon tank and put 7 gallons in at a time, that's 13 gallons (x 6 lb/gal) you are carrying around needlessly - 78 pounds at its peak.
Been there done this. As a college student, when I only had $20 to my name didn't spend 50% of my capital on gas. I spent enough to make it to the party.
[+] [-] Zenst|13 years ago|reply
In general these will be young people who are out to enjoy life and whilst many adapt a more moderate balance lifestyle, there are always some who carry on.
Certainly with the lack of incentives for savers, this certainly does not help motivate people and why should it.
What I would be interested in is a graph of fiscal behavour done per age groups and fiscal income. Also if they are single or married or have children. Then I believe you would see a more measurable trend.
Though it is worth bearing in mind credit card companies prefer people who live like this as they make them more money than not and with that is it a testiment to how well credit card marketing is actioned I do wonder.
[+] [-] potatolicious|13 years ago|reply
This is an audacious enough claim that citation is needed. It also smells a little like fundamental attribution error (i.e., assigning behavior because is is the nature of the individual, rather than situational).
[+] [-] coldtea|13 years ago|reply
Yes, only in the first case they buy mostly essentials and they are fucked if they have some emergency, where in the second they buy more stuff, can take of their children more, and can use some of their paycheck (or the next one) if a need arises.
I don't care much for the morally scathing undertone of the comment.
>In general these will be young people who are out to enjoy life and whilst many adapt a more moderate balance lifestyle, there are always some who carry on.
Spoken like a middle or upper class person who has never come in contact with the large swaths of poor people out there before, or if he ever had, has long forgot all about it.
The US is like a third world country job-wise and living conditions wise in many places. I've been to all, from Mississippi to South Dakota to Georgia and Alabama to Idaho -- and I've seen and spoken to people in similar situations all over, from NY to Seattle.
Living from paycheck to paycheck is not about some ...hipsters ("young people out to enjoy life"). It's about the declining middle class and the new masses of poor. Including millions upon millions of blacks and latinos.
[+] [-] kyllo|13 years ago|reply
[1] http://www.huffingtonpost.com/2013/02/12/top-one-percent-inc...
[+] [-] dragonwriter|13 years ago|reply
Yes, the less surplus income people have, the greater is their marginal propensity to spend.
> Certainly with the lack of incentives for savers
The US tax system has such extreme incentives for saving and investment as opposed to spending that any statement that starts this way is worth nothing but a laugh.
[+] [-] tnorthcutt|13 years ago|reply
Do you mean aside from the inherent motivation of being able to weather the small financial storms of life and generally being able to build wealth and have significantly more options available to you in many parts of your life?
[+] [-] jonnathanson|13 years ago|reply
Traditionally speaking, paycheck timing was used by retailers catering to low-income segments -- especially those on food stamps, and those who buy groceries on extremely predictable cycles (by necessity). But what's interesting, not to mention troubling, is that this trend is proliferating up the socioeconomic ladder. It's been going on for awhile now, dating back to before the 2007/8 crash, though certainly made a lot worse ever since that downturn.
[+] [-] rgbrenner|13 years ago|reply
[+] [-] r00fus|13 years ago|reply
[+] [-] ams6110|13 years ago|reply
When gas prices are volatile this actually makes sense. It's the same principle as "dollar cost averaging" when you buy stocks. Purchase a fixed dollar amount, and you end up buying more when the price is low, and less when the price is high, which is what you want to do. Therefore when I buy gas I stop at $25 unless I have a coupon or I'm somwhere that prices are significantly lower than where i normally buy (prices vary by $0.50--$0.75/gal within a 50 mile radius).
[+] [-] bsims|13 years ago|reply
The OP also said it was based on 5+ years worth of data which probably means it is less about gas price fluctuations and more about buying habits.
[+] [-] coldtea|13 years ago|reply
But what the article says is that they don't put more the $20 at a time, period.
Such a behavior wouldn't see any advantage given volatile prices, because in the end you end up paying the same (you pay lower at some times, higher at other).
Which is the article points too: that they see the guys doing that end up paying the same amounts as the guys filling it up normally.
So it's not the volatile prices that get people doing that, it's perhaps a false idea of saving money, or that they infact do not have that much lying around and try to get to the end of week accounting for any emergency.
[+] [-] josephlord|13 years ago|reply
[+] [-] btgeekboy|13 years ago|reply
[+] [-] tpainton|13 years ago|reply