'An economic divide that is widening': Almost one third of Americans earning $150,000 a year or more say they're living paycheck to paycheck and many rely on credit cards to close the gap

Speaking anecdotally, I've always heard "living paycheck-to-paycheck" to mean having insufficient savings to cover a missed paycheck

I.e. if you don't get an expected paycheck then you cannot pay your monthly debts/utilities/rent and still have enough money to feed.yourself and your dependents

(provided we scale back retirement savings).

But it would affect you, just longer-term than shorter-term. You don't know what things will be like when you're old, which is why most people who can do put the max amount in their IRAs, 401Ks, and HSAs. That doesn't mean they're bad people or misspending their money or not living paycheck-to-paycheck.

If you suffer in your old age because you had to cut back on retirement, that's a huge impact on your life. It's way easier to live paycheck-to-paycheck when you still can work than it is when you literally cannot and are relying on Society Security or retirement investments. I think that matters.

I'm poor as fuck, but I don't feel like I need to judge people who barely make more money than me in the context of fucking billionaires.

Also, do you have kids, because that's a huge impact on the bottom-line of people who make a decent salary.

I'm not sure that they asked that directly. It looks like they asked if people are using their credit cards to cover bills more, and whether they expect to be able to fully pay the credit card bill off by the end of the year.

This is like all those surveys saying that 70% of Americans have less than $5000 in a "savings account."

No shit, yields on savings accounts have been pointless for about two decades. Everyone with spare money puts liquid savings into index funds in margin accounts and runs on credit cards.

Rent in NYC where I live is insane. My partner and I recently toured a place where they broke up the basement of a building into 4 apartments, none of which had a real bedroom, and were asking for $3k each

Try making $150k in a "reasonably priced area." It can be done, but is not the norm. The problem is that to make a good salary, you have to be in a place that pays those wages. Obviously, this attracts more people, so real estate is more expensive.

The trick is to make $150k in some kind of sweet spot where housing does not compensate. But it's always a moving target and is extremely difficult. Then in you lose your job? Start all over again.

Go look at a mortgage or even rent in any major city.

Hmmm you're not going to be making 150k a year in a shit fly over state.

I moved from the Bay Area to the East side of Washington near Seattle, folks here don't make as much as I do for sure, at least not on average. We both have good salaries so we can afford a lot of things. We essentially got to keep most of our bay area salaries.

But even then if we need a big repair we still have to sit down and plan out the money.

I can't even imagine what it's like for folks around here.

In California, a new mortgage payment is 8-15k/month. Rent on an apartment is 3-4k/month. $150k salary isn’t enough for the mortgage and will struggle to cover that cost of rent.

Terrible assumption

Student loans

Household income not personal income? And gross not net, correct? After healthcare, taxes and retirement deductions my net is 50% of gross so let's say that calculates to 6,250 a month. It is a lot of money! But for a household of 4, 2 paid off cars 3 drivers and one college student with no tuition costs, and one high schooler in a school that gives everyone lunch(so it could be much worse) here the average community monthly costs are:

2.5k mortgage with the tax & insurance in there, make that 3k if you are renting.

800/ month car insurance

600/month electric, water, internet

200/month family cell phone service

50/month streaming and donations to community radio

600/month average repair & maintenance on home and cars

Leaving 1700 for food for 4, gas, vet bills, credit card payments (because if someone is making bank now, they got there by making less for years). It's certainly reasonable but here it's about the least you can make household - wise and be solid, so if you are making 50k, you need three people working not two. And I can see how a family could get behind. That 2.5k plus $600 housing cost can be much more if you bought a house in the last year or so, and car loan or tuition could also blow this up, as could a medical emergency.

Or you only consider your expenses after savings and think that you are "living paycheck to paycheck" because you use up all your non-invested money by the end of the month.

I know a few programmers that are broke because they spend every penny that comes in and bought a $90k car the moment they got their jobs.

I don't understand why people give up financial security willingly like that

100% agree

PS: porque no los dos?

It's both. People try to always live above their means. Inflation causes that to catch up

150k for me would be a dream right now. I have a dog, a gf, and I rent. But if you're making 150k and you have two kids and a spouse for example, suddenly that 150k doesn't go very far at all.

Yep, my mother used to manage pays for engineers making up to 300k and for some of them it was a disaster if a mistake lead to 200$ being missing from their cheque and they would be in her office first thing in the morning in full panic mode...

My combined household income is more than 150k per year and I have not changed my spending habits since I was in college.... caveat being I own a house but my mortgage may only be twice what I was paying in rent. Also I now have healthcare.

Still living paycheck to paycheck. I guess I'd be ok if I missed one or both my wife and I missed one. Though, my marriage would start to be in jeopardy after 2 or 3 I'd guess. Not that she would leave me because I'm not making enough but the added stress would quickly become unmanageable.

If you are living in an area with a high cost of living, $150k won't feel like $150k.

From Bungalow, 10 Mist Expensive Cities in the US,

1. San Francisco, CA The cost of living in San Francisco is the highest in the country. Jobs in the City by the Bay pay well, with average annual incomes of over $100,000. In 2019, the city had an unemployment rate as low as 1.8%. But a good chunk of each check goes toward the nation’s highest housing costs. As of January 2020, the average rent for an apartment in San Francisco was $3,700, and the median home purchase price was $1.35 million. Prices are sky-high because of limited housing stock and lack of new construction.

If you are making $100k and renting at the average rental price of $3,700, in one year the cost your housing is $44,400 which is almost 45% of your income. The goal is to spend 30% of your income on housing. If people with would be normally considered to have a good income are struggling then the poor are completely fucked.

There is a small group of people who are making money off this system and ain't us.

This is out of touch. There is a huge number of factors that dictate what amount of money is enough to live a fulfilled live. A bachelor can live a fulfilled life on 30k a year and still save money, but a family of 5 can definitely be living paycheck to paycheck on 150k, especially if they live in an expensive area.

I think location definitely plays into this. 150k in some places is nothing.

I'm almost there.

I also live in the Bay Area. My rent is locally cheap but nationally very high. My wife has a chronic illness and an unrelated acute issue that recently required surgery. She can barely work. Until this most recent surgery I was keeping ahead, but expenses are up and income is down and that's not true anymore.

I have good health insurance but there's a lot more to medical costs than just doctors, and to partially manage her daily quality of life it's not weird to cook her three different dinners and she can only stomach one. This explodes our meal budget.

We're childfree but one of our dogs recently also got diagnosed with chronic illness. They are our kids, full stop.

Shit happens. Don't be a dick about it.

Nope. If people having been living the exact same without changing many of their habits then it is absolutely fair that they would also be struggling paycheck to paycheck. They're effected just as the rest are. We need to focus on the jackass causing us to turn on eachother. We shouldn't be comparing ourselves because there are people who consider 30k/y as living lavish and think they also shouldn't be complaining.

They use the median instead of mean here for a reason... Can you guess it?

Wholely agree. I live in the most expensive region in the US on $160k base salary. My total annual expenses (including vacations, wants, gifts) don't exceed $50k, and of that $20k is rent.

I think the point is, they are living paycheck to paycheck unless they choose to decrease the quality of living.

On one hand we can say these people are way better off than they deserve and laugh at their stupidity.

On the other hand, that's not a great sign for the economy. The "every day" kind of rich person isn't even that rich anymore. And lowering the ceiling pushes you into the floor.

If society were healthier and functioning, relative costs would be going down for everybody. But enshitification is the new big thing to earn another buck.

I mean, this depends on a lot of factors. Stop applying your own prejudice to this?

$150/y = ~$100-110k take home

The average monthly expenses (Living very much in your means, in an area with avg cost of living, not performing maintenance...etc) for a family of 4 is ~$101k/y

So you have between ~ -$80/m to +$700/m in disposable income. If you start doing the necessary maintenance & long term cost amatorization of living in the U.S. (ie. Having to buy a car eventually, if you own a home replacing the roof....etc). Suddenly you're close to negative. Meaning that when these events happen you have to cover their cost with credit card debt or some other form of debt, which means your cost of living is over time partially covered by debt.

This also seems that you are living not surviving... Much of the US is not really living, they are simply surviving. We should not measure the bar that low for what we consider acceptable quality of living standards.

Or, if you are in a marginally higher cost of living area that $700/m evaporates.

Even for a single person, a HCOL area will eat way that income to the point where eating out is a monthly luxury.

It sounds like a lot of money but depending on where you live it can be an incredibly small amount of money.

We came close with COVID, but literally the businesses of the world fucking rejoiced that we avoided a Black Plague scenario where enough people died that workers were able to demand better wages. They were so happy it mostly affected old people, because that meant they could just pile those old non-money-makers into wood chippers while they would lean on the able bodied workers dwindling health's.

You can see it in how it went from "essential workers are heroes!" back to "you should be happy to have a job, I could replace you with anybody in an instant!" pretty much overnight in early 2023.

As fucked up as it is, if more young, able bodied people would have died, the people that were left would have been in a better bargaining position.

On the plus side, millennials aren't having fucking babies so we're killing this fucking sick system one way or another by showing how it's a fucking pyramid scheme that benefits the already-wealthy at the expense of everyone else.

When they won't have enough workers to keep pushing exponential "growth" each year, this whole fucking kit and caboodle will fall apart. Especially when the workers start actually demanding to have their real human lives back.

Even worse, climate change will probably kick all of our asses far before that's even possible.

As sad as it is, the last thing that could change things will be the thing that changes them so far for the worse that forward movement will be nearly impossible and society as we know it will likely fail.

Capitalism (depending on how you define it) is coming up on 600 years soon. That's usually the point at which systems start to break and new ones emerge. Unfortunately, if you're a fan of Marx you'll be aware of his theory that cycles of power relations and exploitation tend to reproduce themselves within these new systems - unless that cycle is broken.

Sounds like this might rectified soon, then.

Edit: before folks reply with a comment about people being worse off, I know. I agree. This is just a scenario description.

It is very easy to be strapped with a modest sized house or apartment in the "right" zip code.

As in a 1.2mil mortgage on a 3 bedroom house that's never been renovated since the 70s. That mortgage could be 5k / month.

150000 a year is 8.7k a month, after taxes. If you have student loans, any medical debt, kids, that remaining 3.7k is pretty critical. You aren't swimming in liquid chocolate every night and wiping with singles.

If you own a home things can happen out of nowhere. I personally just had to replace my sewer line last month. 17k for the work and 1.5k for new concrete. Not covered by my home insurance because I didn't opt for the rider on my account. My fault there... My finances are a bit different than the above description but if you were the 150 + paycheck to paycheck situation, you'd be in hot water.

This isn't a "woe to the 150 crowd" comment. I'm well aware folks are way, way worse off, but when a 150 household talks about being paycheck to paycheck, it's totally possible.

Bay area

They couldn't afford a new one

A lot of, if not most, folks in that income bracket vote democrat and hate republicans. These are tech folks who voted for Bernie. It isn't until you add another couple of zeros that you find the people funding the Republican party. 150k isn't elite, it's literally just barely middle class in any major city.

Sorry about your dad - I hope you got to enjoy some good times together before he passed.

Define high cost living area. Wife with 2 kids and a pet, I assume you're going to need at least a 3 bedroom condo for a modest living arrangement.

Where I live, southern California, the average cost for a 3br condo is $4k per month. Mortgages at this time would be way more (standard 20% down).

Someone else estimated 150k is around 8.7k a month after taxes. So that's already almost half your income just for a roof over your head.

Include the expense of kids, student loans, car loans, health insurance, etc. Yeah, paycheck to paycheck isn't unrealistic.

Not everyone was lucky enough to be in the financial place in their life to buy a house 5 years ago.

To be fair, I live in a low cost of living area and having purchased a house this past January, if I dropped to 130k I might be paycheck to paycheck after a while. Which, granted is lower than the survey.

This being said, my mortgage payment is only $50 more than what my rent was about to increase to, because landlords are the devil.

I also didn't get a big house, it was well under the national average for cost and size, very much a "starter house". But still over 300k, because housing is a nightmare.

I'm somehow sure that plenty of people were still buying houses when rates went up. Once again, people blaming choices and circumstances. It feels eerily similar to how people judge the homeless and talk about their "bad choices."

I don't understand your point? The article and the survey found a 3rd of people earning over $150k were living pay cheque to pay cheque, but also 36% in the bracket below and over 55% of people on $50k or less.

Living pay cheque to pay cheque is a sign of financial distress but not the only sign. People's living costs also match their lifestyles - it's possible for someone earning $150k to be living pay cheque to pay cheque as the cost of living, schools, transport, etc are higher. Of course people in that bracket have the "luxury" of being able to move down the quality of life ladder - move to a cheaper area, cut back on their lifestyle.

Whatever you may think about people earning that much, the message is that the cost of living crisis is affecting everyone and pulling down living standards for everyone. Not only is it hard to live your previous lifestyle but it's impossible to aspire for more.

The only exception is the millionaires and billionaires who continue to screw the rest of us over. We have more in common with someone who earns $150k a year than someone who earns $500k or who is sitting on millions or billions in asset wealth.

The sooner the middle classes realise they're aligned with the poor and not the rich, the better. Maybe then they will stop voting for shit right wing politicians who only benefit the truly rich.

Try living in a high CoL area on 150k. Don’t bother with the “just move” or whatever trite oversimplified solution. People live where they live. Not everyone wants to earn 75k and live in Ardmore, Oklahoma so that their money goes further. If you can find a 75k job in Ardmore, anyway.

Higher taxes, higher mortgage or rent costs, cost of commuting all add up fast.

That said, burning through $150k does seem a stretch. I lived in a major metro area on a lot less (we were definitely poor), it is possible to keep expenses low, but it sure isn’t comfortable at all.

Dude. Get a grip. These people are far closer to you in wealth than the people who fund SuperPACs or own news organizations. You have much more in common with someone who makes $150k/year than you do with Elon Musk, Jeff Bezos, George Soros, Warren Buffet, Rupert Murdoch, or whoever the fuck else has obscene amounts of money. Those people, the billionaire class, the 0.01%, are the people using their larges to influence politics and media.

These people making $150k/year are overextending themselves, I get it, but if I actually spent the money I wanted to spend on improving my life, especially in relation to things like my health, I would be looking at needing to spend that kind of money each year. My teeth are falling out of my god damned head and I've gotten the cost of such things shared with me and it's out of fucking control. I'm talking like $10k for one of the many problems I have in my mouth. The others aren't cheaper. All it means is that we are so poor that we're literally putting off life-saving medical care because it's fucking unaffordable. All people making $150k a year are doing is just barely scraping by while actually getting that care.

Oh no, they own a single super shitty, hollowed out house that is busted as hell and needs massive repairs constantly. Yeah, man, they're doing so much better than us just because they have a house. /s Like maybe take a minute and understand a lot of those people just bought their house, and it's not like they were buying it in their 20's.

People making this much are not your enemy, they are the people you have to convince that the system is broken and get them on your side.

People whose entire wealth and income comes from investments are the people who are your real fucking enemy.

Because guess what, these $150k/year stiffs still work for a fucking living.

Because I get it, it feels like they have so much more when they're making over $100k a year more than you, but like, they're still treading water, just like us, just like this article points out. Trust me, if you were making that money, you'd still be pretty broke unless you didn't have kids.

Source: my broke ass sister, a lawyer who lives in a fucking hovel that needs tons of repair and is being bled dry by medical bills, child care, a psychopathic narcissist of an ex-husband (who literally lives off of credit cars and spends like Paris Hilton) and housing costs. She didn't buy her home until she was over 50, she's Gen X. She's on thin ice just like me, even though she's doing better by a lot of measures. The only "investments" she has is her fucking 401K to try to have a halfway decent retirement (ha, as if).

EDIT: Second Source: Just remembered a conversation I had with a friend years ago when I worked at a local mexican restaurant. He was upset at the owner, because he had like a million dollars in the bank. I explained that a lot of that was because he had been in business a long time, and frankly, you need that kind of money to keep a restaurant running (thin margins). I told him at the time that any huge disruptive thing could eat into that million and make a lot of it go away fast. COVID hit, and that restaurant nearly bit the dust, but only JUST scraped through the other side. I bet they don't have a million in the bank now, they had to shut down to satellite stores where they sold their tortillas.

Many probably live in higher cost of living areas.

And it's entirely possible/likely if they move to a lower cost of living area they will suddenly not make anywhere near as much and still live paycheck to paycheck.

You don't get any sort of financial assistance?

I grew up on the poverty line. Food Stamps and Affortable Housing programs got us by.

I worked my ass off to get above the threshold of qualifying for any sort of assistance, and now I live at about the same level because food and rent eat up the difference between what I make and what my parents made.

What's even the point of your comment, I'm not trying to be rude it just seems unhelpful and the attitude is prevalent. Sure, if people adjust their habits they could make due, but the problem is the fucking robbery of all working people so it's just wasting time bickering with points like this.

Yeah, I was making a flat 50k a few years ago, and seeing some college classmates making three times as much complaining about how poor they were could only make me laugh.

I'm doing much better now, but it still drives me nuts when people don't know how to appreciate what they have.

It's called living in a city. Housing is expensive as fuck in cities.

When people hear "living paycheck to paycheck" they automatically assume it means barely making enough money for essentials. It for sure can mean that, but often people living paycheck to paycheck make good money, they just don't live within their means. It's not hard to buy a nicer house and a nicer car than your can really afford, and run up credit card debt, and find yourself in a situation where you can't pay your bills because you're overextended, even with a good salary.

A few additional things to consider:

• Accrued debt
• Areas with highest cost of living tend to also be areas with relatively high population density (San Francisco is usually the go-to example for this)
• Inflexibility of living in austerity
• Intuit benefits from scaring people in the lower and middle economic classes

I continually rotate debt through 0% interest deals on credit cards, it's how I've paid for a lot of my home improvements.

Paid for a new roof and awning on the house that way, currently paying for solar panels and a large electrical project.

If a credit card offers me 0% interest for a year, why WOULDN'T I do that instead of paying cash?

I have three different cards now that every time I pay them off they're like "Heyyyy... here's some balance transfer checks... 0% until January '25..."

Cost of living varies from state to state, and city to city.

Fucking GREAT for you, no one asked, thanks for being an asshole.