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We Tracked Every Dollar 235 US Households Spent for a Year, and Found Widespread Financial Vulnerability (hbr.org)
Income inequality in the United States is growing, but the most common economic statistics hide a significant portion of Americans' financial instability by drawing on annual aggregates of income and spending. An article on the Harvard Business Review adds: Annual numbers can hide fluctuations that determine whether families have trouble paying bills or making important investments at a given moment. The lack of access to stable, predictable cash flows is the hard-to-see source of much of today's economic insecurity. We came to understand this after analyzing the U.S. Financial Diaries (USFD), an unprecedented study to collect detailed cash flow data for U.S. households. From 2012 to 2014 we set up research sites in 10 communities across the country. The USFD research team engaged 235 households that were willing to let us track their financial lives for a full year. We tried to record every single dollar the households earned, spent, saved, borrowed, and shared with others. [...] Our first big finding was that the households' incomes were highly unstable, even for those with full-time workers. We counted spikes and dips in earning, defined as months in which a household's income was either 25% more or 25% less than the average. It turned out that households experienced an average of five months per year with either a spike or dip. In other words, incomes were far from average almost half of the time. Income volatility was more extreme for poorer families, but middle class families felt it too.
I don't see how TFA has anything to do with tech.
How does this relate to Windows 10?
But why is it on Slashdot?
Now, if you'll excuse me, I have backups to corrupt.
Just got my hours cut from 40 to 32, due to no fault of my own. Supposedly temporary. Right after moving into a new house. I said 'well, at least this didn't happen while I was applying for my mortgage'. Response was "We wouldn't do that to you!". I am grateful, I guess. And also looking for a new full time job, as now my financial calculations are all off due to using a full time salary as base numbers for my financial planning.
A fair number of people get paid biweekly (2 months get 3 paychecks) which would show variability.
Nothing to see here
tax returns on the side for friends since I like seeing what people make, I've noticed it's more about throwing money away on stupid stuff rather than lack of money that's the problem. At my company, all of the developers make $140k or more a year, and they constantly whine about having no money. No one in the office goes out to lunch any longer because they can't afford to eat. Working through lunch is depressing. You should get out of the office and talk to people. My office mate just wasted $12k on an expensive stove, and he doesn't even cook. My boss spent $130k on a BMW and has since asked to borrow money since he's about $100 short each month. He makes over $200k!
People are financially vulnerable because they make the decision to be. Personally, I save just over 60% of my income and have since two years after college when I finally learned throwing money in the trash on things like expensive speakers, car models that depreciate badly, expensive home remodels, etc. just aren't worth what they cost.
I get paid twice a month (not twice a week). My paycheck period can vary from nine to 12 days, depending on the calendar layout. My monthly budget is set for two 10-day periods. If my paycheck has an extra day or two, the money goes into savings. If my paycheck was short a day, the money comes out of short-term savings.
Well played.
The less predictable your cash flow is, the more you need to save. You can only ever rely upon the fraction of your cash flow that is reliable (which is so obviously true that it's actually a tautology).
That means the fixed expenses + minimum variable expenses in your budget should always be less than the minimum you might get paid in a month, excluding things like bonuses, commissions, or overtime.
Moreover -- and I realize that people would consider this extreme -- if you can get your bare-bones budget down below the amount of income you'd get from unemployment if you lost your job, that would be even better. For example, in my state unemployment pays the about same as full-time minimum wage and my household has two working adults, so double-unemployment would net about $2,400/month and that's the number I budget around.
"[Regarding the 'cloud,'] ownership was what made America different than Russia." -- Woz
A lot of people that are good with their money play their cards close to their chests, they do not necessarily discuss or share their financial information with others regardless of how innocent the request seems. This would probably skew results of a long-term survey toward those who don't have as much problem with others knowing their finances, which would more likely be those who aren't so good with money.
Second, who finds this to be a surprise? There are lots and lots of jobs where monthly income varies, and while a lot of those jobs tend toward labor, there are still plenty of other jobs that would see varying compensation due to things like commissions. Sales jobs can be very high paying one month and almost without compensation the next. Same for many skilled trades, if there's no work then there's no money.
I would not be surprised to learn that the cushy, regular-income jobs that most people think of are almost the exception, not the rule. Even IT is not immune to this; those who work as consultants may be paid for jobs that run for a few months and then end, or might be paid per billable-hour billed to their regular rotation of customers. That could mean income vastly varies from month to month depending on if anyone needs outside services or not.
Do not look into laser with remaining eye.
There is no rhyme nor reason to the headline, presumably just cut and pasted from the original article (likely on a site where the "we" made sense). The first sense after the headline is incomprehensible. Forget the fact the whole thing has nothing to do with the theme of the site. Everyday, it's a drip-drip-drip into complete irrelevance, like a slow-motion train wreck...
Income variance is good because it encourages people to live in a smaller house, have less recurring expenses, and then it sometimes feels like "yay, I have more money." Well, that is, if they're not an idiot. Then they'd probably just overspend based on the high number and go into debt.
C'mon, news aggregators like Slashdot shouldn't use "we" in a headline unless it's an original article or it's a clickbaity title talking about people in general.
No kidding. Seriously though, the more interesting thing to find is WHY families don't do budgets. Because families barely make enough to pay for basic needs. The +/- $30 they could be saving after their basic needs doesn't amount to any real value. Stock market will just crash and take it all anyway. Might as well enjoy it while they have it.
More people need to play the lottery!
to understand is you can't budget what you don't have. I see this a lot, where people are struggling and convince themselves if they could just budget the numbers a bit better it'd all work out. I'm seeing apps that say they'll do it. But fact is we make about 20% less than the boomers did. That's why we're struggling.
It reminds me of all these stories after the crash of folks who paid off debt by living frugal. The stories always glossed over the $100k+ salaries. It's a lot easier to be frugal when you make that much. It's the difference between a new car and paying rent...
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Not the best sample size to draw real conclusions.
1. Never, EVER borrow to pay off borrowing. That's a fiscal death spiral. If you can't pay it back, better to tell them and then take the hit. Maybe they'll settle for less than you owe.
2. Never borrow to pay for a sunk cost. Only borrow for something that increases in value over time.
3. Build up a cash hedge over time so you can borrow from yourself.
"We receive as friendly that which agrees with, we resist with dislike that which opposes us" - Faraday
Yet every person who can't budget has an iPhone7 or Galaxy7 or whatever the latest smartphone is. They buy new cars every 3 years on credit and have a credit cards maxed out.
If I had no money to pay off a credit card, I would pay cash for everything and make damn sure not to buy anything on credit. The less money you have the more you must save and the more frugal your lifestyle should be.
Understanding the differences in income is useful. But what's really important is spending.
Whether a person makes 15K or 150K a year, if you spend more than you bring in, you're sunk.
People who never have enough money typically have no idea where they spent it. When you sit down with them and analyze where "every dollar went," people tend to be completely shocked at some of the silly things they spent it for.
The #1 difference between a person who is well off and one who is not, is not income. It's spending habits.
Let me guess... tied to variable number of paydays (and when they happen) in a given month applied against billing on a regular schedule.
did 'fix' income equality, rising sea levels, or global warming?
How come people say that we need companies to make a profit so that they are encouraged to grow and do things, and that without the profit there is a lack of motivation to enter that endeavor. Yet when the common worker has raises and bonuses taken away, and is negotiated down to the minimum rate, they are expected to work their hardest or they are considered lazy.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
But fact is we make about 20% less than the boomers did. That's why we're struggling.
What is this number? 20% relative to what.
The world was different back then. Some things were cheaper (like housing in dense areas), some things were more expensive (like electronics).
We Tracked Every Dollar 235 US Households Spent for a Year, and Found Widespread Financial Vulnerability
Oh you did, did you, Slashdot? Or did you just blindly accept a copy-pasted headline without giving it much editorial thought?
Income inequality in the United States is growing, but the most common economic statistics hide a significant portion of Americans' financial instability by drawing on annual aggregates of income and spending. An article on the Harvard Business Review adds:
And what do you mean "adds"? The opening sentence is straight out of the article as well! You did nothing!
systemd is Roko's Basilisk.
it's the same price upfront or over 2 years. no sense in using a credit card to buy it upfront. when apple/att start giving me discounts on the pay cash price, i'll pay cash. for now the best they do is BOGO deals a few times a year which i'm going to take advantage of next cycle
Not to mention the crazy volatility of being self-employed. I just read an article about how Americans have become "lazy" and are taking fewer risks. Well, when one wrong move -- including getting stick -- can lead to complete financial ruin, that tends to disincentivize risk.
I worked as an attorney in a solo practice, but after the better part of a decade of high stress and month to month struggle, I threw in the towel and (thankfully) landed a much more stable salaried job outside of law. Even when I was working steadily each week (which was not the rule), sometimes it would take month to collect from clients for work provided. Sometimes clients had their own financial troubles, other times they had rigid payment cycles, or occasionally, they were simply reluctant to pay for poor outcomes.
(How maddening is it to advise your client that they are blatantly in the wrong, the law is not on their side, and that they should settle; to tell them that moving forward will result in nothing but frustration and lost productivity and money; and then they insist on going forward. And refuse to pay when they lose.)
That tripe? I know people much poorer than you that blow their money in stupid ways and go out of their way to make the worst financial decisions possible. Oddly enough they even manage to deal with the odd hiccup too. They aren't nearly so much in need of your pity than you might think.
A Pirate and a Puritan look the same on a balance sheet.
>but the most common economic statistics hide a significant portion of Americans' financial instability by drawing on annual aggregates of income and spending
Thanks Obama!
Of course his point flew right over your head and that's really the point here.
A Pirate and a Puritan look the same on a balance sheet.
My wife gets paid every two weeks, so two months of every year she gets three paychecks instead of the usual two. So a 50% uptick in income two months of every year.
A weekly paycheck means that four months of the year you'll get five checks instead of four. Note that that frequency conveniently maps to a 25% uptick in income four months of every year without any instability at all.
Not going to bother running even preliminary numbers for a household with two jobs, one paid weekly, one biweekly, but I expect that most of the income instability they saw could be accounted for that way.
Caveat: I'm not trying to imply that all the income instability was illusory, but it's certainly possible that a good chunk of it was an illusion produced by monthly spending and weekly/biweekly income....
"I do not agree with what you say, but I will defend to the death your right to say it"
Is that income is a rate. Savings is an amount. More precisely, your savings (or checking) account balance is simply the integral of your income minus your expenses. (Or if you prefer, (income - expenses) is the first derivative of your account balance.)
What this means is that unless you're racking up debt (loans, credit cards), you have to live within your means. The average rate of money coming in (income) has to equal the average rate of money going out (expenses). And (this is the crucial part) that requirement is the same whether you have zero savings or a million dollars saved. In other words, the person with a million dollars saved up has to live by the same constraints as someone living paycheck to paycheck. This realization struck me when I was counseling a co-worker who was having financial difficulty, and when we went over the numbers I realized she made just as much money as I did. Except instead of saving 20% of it like I was (both for retirement and as a buffer against unforeseen expenses or loss of income), she was blowing it all on toys and going out.
If you're living paycheck-to-paycheck and aren't accumulating debt, you''re already following the first rule of personal finance management - limit your spending to equal your income. All you have to do is lower your expenses slightly and you'll start accumulating savings. That savings will act as a buffer, evening out the dips and spikes TFA describes so that they don't turn into a financial emergency.
The person with a large savings account isn't necessarily better off than you because they make more money than you. They're better off because having a savings buffer frees them from having to waste time (and pulling their hair out) dealing with spot shortfalls in income or spikes in expenses. Instead of having to pay the electric bill at the last minute because you haven't gotten paid yet, you can just pay it whenever. It all adds up to exactly the same amount of income and expenses at the end of the year regardless of which way you do it. Just the paycheck-to-paycheck way is a lot more frenetic and nerve-wracking, while with a savings buffer you can just pay it, and go on doing things you enjoy instead of worrying. The savings way may even be cheaper as you won't be hit by late fees and penalties.
I realize many of you already know this. But in my experience talking with friends and co-workers, the majority of them live the paycheck-to-paycheck way. Many of them don't even track their spending - they deposit their paycheck, then spend money until the ATM tells them they have none left. This country really needs to make basic finance management a required course in high school. If you do use the ATM method, open up a free savings account. After depositing your paycheck, take, say, 5% of the amout you just deposited and transfer it into the savings account. Over time, gradually increase the percentage to 10%, 15%, and hopefully 20%. Make ATM withdrawls only from the checking account. If an emergency occurs, you can transfer some money from savings to checking to tide you over. No, your friends asking you to go to a concert with them does not constitute an emergency. But if an item you were saving up to buy next month goes on sale this month, then yes you can tap into your savings to get it now. Just be sure that you "pay back" any money you "borrowed" from yourself for the item on sale or for the emergency, by increasing the percentage you put into the savings account until you've caught back up to where it would've been without the "loan" to yourself.
Poor people hate money. When they get a little extra money they have to get rid of it as soon as possible. I see this at work all the time. Sometimes we get a $500 bonus for a job we completed. The guys that are constantly broke will waste every dollar of that money in two or three days. They simply can not stand to have any money.
Are you sure you tracked *every* dollar?
... uhh, realy? A budget is a plan. It can be a good plan, it can be a bad plan, it can be a plan that you ignore or execute to. However, if you don't have a plan, you most certainly will go off the rails. And no, I most certainly didn't get out of debt on a 6 digit salary, I did it working hourly.
Exactly. The basics where cheaper, much cheaper. Luxury was more expensive, but it was not expected. Nowadays, internet, smartphone etc is all expected.
Article does not provide raw data nor link to it, nor even data summaries.
It only provides interpretations which is a red flag for fraud.
Show me the data !
Wages are stagnant, but we have no inflation, so no worries! Oh yeah, groceries have really gone up in price, but they don't count! Gas is lower than it was four years ago, but that was a historical high, and the current price is still high, but not record high, so that's ok!
to understand is you can't budget what you don't have. I see this a lot, where people are struggling and convince themselves if they could just budget the numbers a bit better it'd all work out
A budget should not be like a diet - it's not a plan. If you try to make it a plan, what always happens is you plan to lean, and eventually binge.
A proper budget is a spending journal that you review as a family. This is amazingly powerful: at the start of the process, list the things you think you spend money on in order of importance to you (no consulting for couples, each list independently). After a couple of months, list what you spend money on in order of how much. It's very rare for the lists to align.
When you see that your spending a lot on shit you don't actually value, and really conserving on the thing you like the most, life gets better. Sometimes couples will discover that they each are prioritizing something because they though the other one liked it, but neither actually does.
Anyhow, that's the point of a budget - discover where you're spending a lot on stuff you don't care about, and where stuff you really like is actually quite cheap.
Socialism: a lie told by totalitarians and believed by fools.
If you have two incomes on bi weekly pay roll you could see wild month to month discrepancies even though in the wash it all comes out. Look at any company's bi weekly pay calandar, there are always 2 months with three pay days because 26 pay periods doesnt divide evenly into 12 months...duh...figured that out when i got my first job (full time) at 19...
Then you factor bonuses, commissions, tips, overtime and other variables its not a shock to see income swings month to month.
My dad worked for a company that did not pay you for vacation or sick time. If you were not at work, you did not get paid. However, they did include extra money on your anniversary check. A long time worker could easily get ten or more weeks pay on that one check.
More than one wife, at husband's retirement party, was surprised to discover that.
But to keep this in the programming world, the state decided to require income tax withholding. One of our ten week paycheck employees got his check on the first payday of the year. The program assumed that was the usual paycheck and took out a large withholding. It took some time to fix this.
I also worked for the same company and, as a programmer, I was "management" getting the same check each week. I was paid the grand sum of $9,000 per year, but I got to play with a 30 million dollar computer system.
Oh yes, woe is you.... You've been mistreated and it's NEVER been this bad before...
Come on, everybody wants to make more money (well, almost everybody) and there is always someone who makes more than you.... I've learned that the trick to being comfortable is to live within your means. If you find yourself not able to make ends meet, you have gone beyond your means. If you find your debt load is increasing faster than your ability to service it, you are spending too much. Most don't want to admit it, but the temptation to over spend is hard to resist, but it is easy to recognize when it's happening. If you cannot stop spending when it's obvious you should, you are killing your future..
Ideally one should not be in debt for anything but *real* property and NEVER should you owe more than what the property is worth if you can help it. No credit cards that are not paid off monthly, no upside down car loans, no unsecured loans of any kind. Plus, one should always have 3-6 months of salary in reserve. One should also be putting a significant percentage into savings (retirement and investments).
Don't think this is possible at your pay? Unless you are literally making minimum wage (and few of us actually are) the Ideal situation I'm describing IS possible. The issue usually is that younger adults somehow think that they need to live at the same standard of living as Mom and Dad, with all the things they had. I've seen many young adults fall victim to the "buy now and pay later" "You can have it now!" before they have enough experience to earn enough money to actually pay for that luxury stuff. They dig a hole of debt and keep shoveling faster and faster only to realize that they can no longer get the dirt out of the hole because it's too deep.
Earn your way up, don't spend money you don't have on stuff you can live without. DON'T go into debt but DO save. I know it isn't easy to overcome the temptation to just spend, but if you do, you will have a better life with less stress and financial mess. In the end, it's not who dies with the most toys, but how well you have lived. Living well includes living within your means.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
The authors of TFA did something. Learn. To. Copyedit.
I'm not totally against going to lunch with co-workers, I do so occasionally.
However going out to eat every day is a huge expense over time compared to eating leftovers.
A financially prudent person can easily save a ton by simply not going out to eat very often...
Another strong factor is that I am a consultant paid by the hour, so taking an hour and a half off for lunch is like going to a fine french restaurant even if we are just going to Good Times (for those not in the U.S, the times are not as good there as the name may imply. It's basically McDonalds with better fries [chips]).
It does sound like your co-workers are not avoiding eating out by choice though, which is sad and disturbing.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
If you get 26 paychecks a year, sometimes 27, you will see two or three months where your income is +50% of what it normally is. If you have two incomes on a Biweekly payroll, you could see up to five months in a year with such a spike, or depending on how you look at it, 7 months with a dip.
Also, bonuses, commissions, and other incentive pay often cause big fluctuations in earnings even though the DC component is not just sufficient but also prevalent.
Ebbs and flows sounds a lot like stock market manipulation. And households nowadays follows the market volatility (VIX).
Considering markets are manipulated, push the people to the markets and you've now got indirect control by following the ebbs and flows.
It's cute you don't think degrees depreciate.
Age discrimination and other forces (like H1-B) are alive and well and eating into your future earnings potential.
I know people much poorer than you that blow their money in stupid ways
This is completely anecdotal, but shortly after Hurricane Katrina hit and people started getting their FEMA money, the jewelry shops here in Louisiana were bombarded with orders for gold teeth.
People on this site seem to be under the delusion that only rich 1%'s do this. They just can't grasp that someone at the bottom 1% can be just as greedy as Mr. Burns.
If you post as Anonymous Coward, don't expect a reply.
Instability of income and expenses aren't problems in and of themselves. Think of CEOs who get irregular (but giant) paydays from things like exercising stock options, or highly successful trial lawyers who win a big contingency case. There is only an issue if insufficient savings cause a mismatch between the timing of income and expense, or there is insufficient access to cost-effective credit to smooth the mismatch through borrowing. The linked article mentions that the study did look at how to resolve those issues, but the linked material doesn't really provide any meaningful discussion.
thing. You only get that dollar once. When, over the period of your life, is the best time
to spend that dollar? And what is the best thing to spend it on? (Hint -- probably
not a double shot mocacappachinofrapoola at lunch time).
Hey, Jason Chaffetz, I'm still not going to be able to afford my health insurance even if i *don't* buy that "fancy new" iPhoney and instead stick with the bag phones from the 1980's.
A friend celebrated his new higher paying job by purchasing 100+k car. At dinner I commented, "you could have bought a Toyota and retired a a year earlier". Judging from the look on his wife's face she shares my opinion.
Just knowing where the money is going can help a lot because you then will have that in mind whenever you're spending money. Years ago I analyzed my spending for the previous 6 months and realized I was eating a significant chunk of my paycheck by going out for lunch everyday. So I started packing leftovers for lunch 4/5 days a week and started saving $200 a month on that alone. I was still spending money for food to eat but the cost for food you prepare yourself is a small fraction of what you pay for even cheap food from a chain restaurant.
My wife has been a real estate agent for 20+ years, a job with built-in income instability. I was in software consulting for a long time, then went to work in a state university for health insurance and to trade a more stable income for a little less money. Now the state's in financial crisis, and we're all taking 20 percent temporary cuts to weather the situation. Meanwhile, last year's big election froze the local real estate market for about six months. Lots of fun.
The very wealthy are like Mr Potter from the old Christmas movie: they can easily weather cyclical slowdowns and have no trouble using them to consolidate their own financial power.
The average person spends what they make. Their expenses... almost magically... come out to... what they earn. And often more.
We live in a consumer culture. Easy credit and endless spending opportunities. Choice is considered an unvarnished Good, how can choice be bad?
Yet listen to the sales pitches:
"You work hard, you deserve a new truck."
"It's winter and cold and awful. Go to somewhere tropical, it's paradise!"
"This new shirt will make you a Winner. Don't be a Loser, be a Winner!"
"Four easy payments of $99.99. Act now and we'll cancel one of those payments! One whole payment for free!"
"Save $10,000 but the deal will be gone by Friday!!"
When I graduated from High School I took an option course in Personal Finance. It literally changed my life. Now understand, I had always taken an interest in money. My parents taught me the basics of finance, investing. My math skills were strong. Yet I discovered, I had no coherent picture of "how" family finances fit together. I had a lot of the parts but it didn't add up to a complete picture. I had never been responsible for running a household and so was a somewhat disinterested observer.
My guess is, this is true for a lot of other people too. There are endless case studies published by financial advisors; some of the profiled individuals are almost comically willful and misdirected about money.
My personal take-away? Do try not to be a Scrooge; living responsibly isn't about not having any fun. The problem is, many people spend on things they think will make them happy, which do not. Said item is rapidly discarded and the cycle begins again.
So spend money, but make sure you spend on things which really improve your life and make you happy. Even little luxuries can add a lot to your life. The key is, it has to be a luxury you will get genuine pleasure out of. Major bonus points if that luxury can be re-used, many times over. The best way to determine this? Think about it. Spend time planning the purchase. A good idea now will still be a good idea a week or a month from now. Fads, impulse buys, and Shopping Channel purchases never work out.
Probably because of the Bill G. connection. You see, his household was one of the participants. :( ). But he was able to sit at the kiddie table with Donald T. and friend H.R.C., so I guess it
Amazingly, his house goes through the same income ups and downs as the rest of America, which
I found quite interesting. One month in 2013, it's reported in the article, that he could barely afford
the $32,432.12 lunch special at the local club. He was pretty embarrassed, but his good dear friend
Warren B. picked up the server's tip, for which Bill was very grateful (he had to forgo the desert,
though
wasn't all bad. If only he knew then what he knows now about the election, what he could have done!
CAP === 'annotate'
If more peeps followed Dave Ramsey's advice, they'd be a lot better off.
"Debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice."
I'm doing better than most of them (not by much).
We're all good and screwed except a few rich asshats. The last gen didn't "Earn their way up". They had massive socialist programs. College, welfare, higher minimum wage, etc. There's a name for what they're doing: Pulling the ladder up behind you
And did you even read my post? The problem is you can't save what you don't have. Shit happens and it takes money to put out fires.
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I spend about 4000 USD per year on food, many and extra 1000 USD include slightly more luxurious choices. Perhaps on average less than 1000 USD on electronics, like a PC/laptop/phone upgrade every 3-4 years. I buy electronics on the slightly more expensive side, so the nominal prices are overall par of we what I've seen 20 years ago. Of course, we could do a lot more with the same category of electronics, but pretty much the same regarding food. Not to mention I spend money on rent that scales with inflation, if not more quickly.
Most other luxuries such as travelling also scale with food and rent. It's also curious that electronics get cheaper but say Gucci bags get more expensive over time. Basically if you're anything below the kind that buys yachts for fun, your pay most likely has not kept up with inflation, and inflation still dominates your spending, unless you can eat your computers.
My income spikes because we're paid every two weeks. Two months of the year I get three paychecks. Did they take this into account?
OK let me get this straight. Choose 235 people in the US and "the households were diverse". We now have results, so we can now apply this to the entire population. The population of the US is 326 million - how conclusive can this be with such a small sample of the overall population ? The results may be interesting but how representative can it really be ?
The lack of access to stable, predictable cash flows is the hard-to-see source of much of today's economic insecurity.
So Economic Insecurity is Positively Correlated to Economic Insecurity?
Troll is not a replacement for I disagree.
The financial budgeting comments are off base. The piece give solid reasons why there is income fluctuation, that has nothing to do with the worker. My own research (and direct experience, my income has fluctuated from $12k to $150k/ yearly over the past 5 years) confirms this is due to completely due to a shifting economic landscape. Don't distract the point of the article or state the "solution" is a workable budget. That is important, but it's a moot point if the income doesn't support a livable life due to increasing housing/health/transportation costs.
"Fundamentally, the instability of households’ cash flows that we saw arises because families bear far more economic risk than they have in the past. Their jobs deliver less-steady income, even when they are full-time. They have less room between their incomes and their spending needs, and less ability to accumulate reserves. And employers and government do less to buffer individual families from the resulting ups and downs."
Easy, car breakdowns. Someone got sick and missed work. Laid off for a few months
This would have been a much better article if they would have published the data behind it.
If they're much poorer, they may be in a position where savings are going to be wiped out somehow, so it may make sense to spend it while they have it, as long as they can manage to deal with the odd hiccup.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
To put a geek spin on this, it's like making sure to profile before optimizing software.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Does community college have a tuition bubble too? If not, I was under the impression that the path was like this (source:
1. Get a job that needs a high school diploma.
2. Use that to put yourself through a 2-year community college.
3. Get a job that needs 2 years of college.
4. Use that and your transferred community college credits at an in-state college and finish your degree.
This article would be great if they actually included data from the study (which is why I clicked on the link). While interesting, the content was totally shallow and represents a missed opportunity. Boo.