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October 23, 2009

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@Jim
I wish VA would allow us to kick out people who can't pay. Under VA law you must provide your tenant with a 5 day notice and only after non-payment of those 5 days can you then take him to court. The hearing can be postponed, etc, etc to the point where your renter can stay for up to 2 months rent free (TRUE story)


From VA Renters Rights:
"If you do not have a lease agreement, the landlord can evict you without any reason; however, you must receive a 30-day written notice. If the eviction is for nonpayment of rent, the landlord may give you a “five-day pay or quit notice.” If the rent is not paid within five days, the landlord must go to court or give you written notice to leave."

We vacationed in France about a month ago. They pay a 19.6% VAT tax on everything, it's actually a pretty good type of tax. It's a consumption tax where the government collect tax money every time that value is added to any product. Currently it accounts for 45% of government revenue. Gasoline was also about $8/gallon.

In France education from kindergarten through university is FREE. Healthcare is also FREE.
People seemed very happy, in general they tended to be much slimmer than Americans and have one of the highest life expectancies in the world. They tend to shop every day in street markets rather than in big supermarkets, as is the custom here, and they are also pretty active, lots of pedestrians and lots of cyclists. We travelled from Nice in the South of France to Paris and we never saw a single homeless person - they do have more grafitti than I am used to seeing where I live however.

The USA is going to have to change its ways as we transition from being a Producer nation to a Consumer nation and I believe that we will be heading down the path that the European nations started going down after WWII whether we like it or not. As has been mentioned by others, here the Rich are getting Richer and the Poor are getting Poorer and that doesn't auger well for the future of our country. I happen to benefit but I don't need it. Now I see that there's a plan afoot to give everyone over 65 a check for $250 to make up for not getting a cost of living increase in Social Security next year - that's more debt for future generations.

The causes of the current severe recession and joblessness can be directly attributed to reckless and greedy risk taking by some of our largest commercial and investment banks, mortgage companies, and insurance companies, as well as by consumers using the rising value of their home equity as a piggy bank and maxing out credit cards then not paying them.

Unemployment insurance was never meant to last forever and if budget deficits continue at the current rate as many economists predict we are heading down a terrible path where interest on the national debt will consume an inordinate percentage of government revenues.

It will be interesting to watch this battle play out as the two political parties line up along with all the lobbyists and special interest groups.

There are so many smart ideas posted here, i feel like i wrote them ;)
Just kidding. But really, recognizing myself in some of these comments feels super and is great validation. Its also great to see others that live counter to the stats mentioned at the top of the article.Its prolly true that sometimes the authors of articles like those come up with conclusions and then pose the questions in a way that backs them up. And while the 6 tips at the end of the article are all fine sugestions, there is really nothing ground breaking there. I think in general, we humans have a tendency sometimes to focus too much on the negatives, and then deal with them by ignoring actually dealing with them.

I get so tired of people saying that instead of decreasing savings, you should cut cable TV, fancy vacations, etc. We save $100/mo. and really have to scrape to do that much, and we do not nor have we ever had cable TV. We don't even own a TV. We don't take fancy vacations either. We drive to visit relatives twice a year. We shop at Goodwill, clip coupons, almost never eat out (and when we do it's Fazoli's with coupons), don't have a gym membership, we have one 10yo car~~I could go on and on about the careful, frugal choices we've made. Please don't smugly assume that just because a family has decreased their monthly savings amount that they are squandering their money frivilously. I know that happens quite often, but it doesn't happen in every case.

Musicians and artists often live paycheck to paycheck as we have an uneven income stream. When we are really busy we save a lot, to cover dry periods. But.. a dry period can last longer than expected. In order to keep doing what we love, we've cut out expenses to the bone. Live in NYC, rent stabilized apt, we don't own because it is much cheaper to rent (in our situation), we own our car, it's nine years old, we cook at home (mostly)shop at great consignment stores for clothes. NYC has gallons of free and inexpensive culture, which we partake in all the time, and you can walk everywhere. Our work requires a car otherwise we'd not own the car. I'm saying all of this as a theme on this site is how overly expensive NYC and other great cities are, but... that is not entirely true. You can go out every night, on foot, for nothing, so you don't need to pay for a car, or transportation. We have great food shopping, I can visit a farmers market and get wonderful, less expensive produce six days a week. I can shop in Chinatown for inexpensive fish and shrimp if I am so inclined. I can join Audience Extra's and pay $3.50 for theater and concert tickets, including sometimes Lincoln Center and Broadway. I can use our great libraries both research and otherwise, I can visit the Strand Bookstore and buy books for as little as $1.00. I can eat out for two at a wonderful restaurant for $20.00 and it's not a chain restaurant. I can visit the greatest art in the world at our museums, the Met has a pay what you desire policy so I pay little when I'm tight, other museums have free nights and there are many smaller ones with no or limitted fees. I don't need cable, when it's raining I watch netflixs. And I have this great city to play in, and build a career that does benefit from being in NY for inspiration and connections/networking.

Old Limey,

the aggressive risk-taking by banks can itself be blamed on the mess of government regulations (of the bad sort), interventions, under-the-table deals, and protections put on banks. Nobody is going to give out a bad loan to an unqualified person if they have to take on the risk, but they'll give plenty of bad loans out if they can pass the risk to someone else.

How does living paycheck to paycheck happen?

Just an observation from my perspective... A few people had control but experienced a catastrophic event that propelled them into the situation.

Far more people started in the position while young and never learned how to escape it. It's ignorance, they simply don't know what they don't know and never make an effort to learn.

I recall clearly thinking if my monthly income can afford a $100 monthly payment for a new computer, that I could afford the computer. In those years I never thought about all the other unexpected expenses that would push me over the financial edge. If I had disposable income, I disposed of it!

Having kids triggered me to get a handle on my money. But I know and have met hundreds of people that never "woke up". The ignorance continues...

@Old Limey, It sounds like you _were_ living paycheck to paycheck when you first arrived in the US, at least how I would define it. Or was the $400 enough to live for six months back then?

I moved countries recently and that's how I got to be living paycheck to paycheck - it lasted about six months while I learned my way around. The first month in my new place, the only furniture I had was a mattress and a plastic crate. That plastic crate was my everything! :) Pretty similar, eh?

Well done though.

People need to try to minimize living expenses, free up cash flow and don't keep upgrading your lifestyle to fit your income...

My salary is $20k per month. Taxes eat up $6700 per month. I fully own my condo and prorated monthly fees are $120 per month. There is no property tax. Live in a tropical country so there is no heat, only electricity, about $75 per month. Water is $3 per month (no joke!) and local phone is about $2 per month, can only receive calls. Cable is $60 per month and high speed internet is $25 per month. Groceries are about $400 per month. I give my wife some spending money each month at about $1500 per month.

Cell phone is paid for by the company, as is the company car which covers all expenses (gas, maintenance, insurance, tolls, a driver, etc)- pretty common in this part of the world. Health insurance fully covers all doctor expenses, I do have to pay out of pocket for dental and vision, accruing $50 per month would normally cover all expenses.

$1200 per month is used for fun money- going out to eat, doing weekend trips at nice resorts, it's enough money to have the occasional splurge.

$10,000 per month goes into savings. I don't contribute to a 401k as there is no tax relief for this on my overseas taxes. No social security to deal with either. No Roth IRA as we earn too much to make a contribution.

It's possible to have a high savings rate but you must systematically remove as many fixed costs as you can.

-Anon (want to keep my personal info private for obvious reasons)

Re: Living paycheck to paycheck is very irresponsible behavior and even more so when you have children that are totally dependent upon you.


I don't have kids, but I live paycheck to paycheck. On a poverty-level income, do you have a better alternative?

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