Question: So, help those of us who are living “hand-to-mouth”, paycheck to > >>>> paycheck…what sort of planning do you suggest? Should we all quit > >>>> our jobs and look for work with employers who will fully fund our > >>>> medical insurance and retirement pensions? I plan to keep spending > >>>> everything I make just to get by for the foreseeable future! I haven’t > >>>> had a vacation in eight years…I can’t afford to go anywhere. I hear > >>>> most employers are going to hit up their employees again this year for > >>>> a fifteen percent increase in medical insurance premiums. So, what do > >>>> we do? Do we buy groceries and pay the rent or do we buy health > >>>> insurance? A difficult decision for most of us working stiffs!
Answer: Bill – my husband and I were just like you a few years ago. One by one we saw people who had given good service and been with his company for 30+ years being let go. We had never realized we were living pay check to paycheck. We thought that meant people who were going hungry. What it means is if something happens and you are let go and don’t receive a paycheck, miss even just one, that means that that months bills will not be paid. When I realized that we were exactly there…. we bought everything we wanted, went everywhere and did everything we wanted, and thought we were living on top the world. But when I realized that if my hsuband should get a pink slip at work, we would not even be able to make one month’s bills, I realized we were being insane. In the past, when there was such a thing as security, people lived on credit and never worried about paying it later. Now, there is no such thing as security, one could find out they have no job tomorrow, and then find out they can’t find one, at least with the pay they need to make their payments. Our goal is to pay down our bills as fast as possible, and should my husband find himself at a job loss, the less it takes to make it each month, the better chance we can survive on small pay till if and when he gets good pay again. We started about 3 years ago, $150,000 in debt, and are now down to about $80,000. We do take vacation, and we do special things. We actually saw 2 movies this weekend. But, the thing is, it is not SCHEDULED matter of fact, doing it like clock work. That is where you have no leverage at all and all your money is already predestined to be gone without fail. We do things infrequently and work like crazy to bring our debt down. It’s also worth mentioning that at our age there is anything that could go wrong with our health and as hubby and I are both on maintenance meds, no job would mean no meds. Don’t paint yourself in a corner. You asked if you were living a lavish lifestyle. Lavish is directly related to whether you can cover your bills, and be secure if you should find yourself unemployed. If you are fiddling away all your money like teens dating, you may not have to wait till you are 70 years old to feel the burn. You could feel it this month if your job or health took a bad turn. I’m so proud of my son of 24 years. When he went out on his own, we advised him how nothing was secure this day and everyone had to have money laid back to make their payments on should the get the axe at work, so they don’t their home/apt/car, etc. He has his own apartment and pays his bills on $22,000 a year and still put away $4000 this year! Things we changed to have more money to bring our debt down: 1. I started making hubby’s lunch, simple but more nutritious than what he was buying everyday 2. Cut off most extra phone services, leaving call waiting 3. Stopped the ‘casual’ eating out, except special cases (anniversary, birthday) If we did eat out on a lark, tried to get most bang for my buck (whopper with lettuce, onion, mater, cheese – see how many food groups I got?) 4. Cut off extra phone line I had for years for dial up service and installed an Emerson Switchboard that allows the phone connected to it and computer to ring 2ce if a call comes in. 5. for the first year, we were just making enough to make our payments (there were so many). We were very strick, practically no eating out, we were brutal with the air conditioner and we cut our channels down to local networks only. We made so much headway in that year that we cautiously gave ourselves a little more extras and are still paying very much over the amount required in all our remaining payments. Our home loan is a line of credit, so it works like a charge, as the balance comes down, the payments get smaller, but we keep making the full amount we have extra every month, and hope to pay our home off in 2 years, when we are 53. We also have the security of knowing that as the payment goes down, if my husband should get the pink slip, his job will probably still be able to cover the payment, even if it is a horrid job. 6. started shopping at ALDI, if you have one, please try it for 3 months. The first time I went I thought they didn’t have anything, but as I kept going back to get those 3 things I saw the first time, I kept seeing MORE things, and MORE and I save hundreds of dollars every month on groceries compared to the normal stores (Kroger, etc). There are different ways to do it, what one thinks is secure, another will say it’s wrong, but to not even try is to think you are invincible and you or your lovely wife could have a stroke tomorrow. Honestly ask yourself what would happen on the next payday if the check didn’t come??? Goodluck to you, and remember that not all activity cost money, you don’t have to quit living to enjoy life. But when you spend it, it should be a case of “do we want to do this OR that, not just doing it all, with no way to survive at all should you lose your job/s. Yes that is living lavishly. Start by making sure that you have 1 month of bill money laid up to make it should the check suddenly disappear. Remember, even benefits may take _months_ to kick in and actually arrive. You failed to tell us if you are in debt of any kind, (home, rent, utilities, meds, car, charges, what MUST you pay, or you’ll feel the burn this month) How much did you pay on your total bills last month? Believe me, there are plenty of people who show up here AFTER they lose their job / devastating health problems, and they are hurting badly, age is no guarantee, many were younger than you. Don’t think you are being told to save for when you are 70, you are being told to save to secure your life right now.
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