Living Paycheck to Paycheck: Reality vs. WTF?

There's an article published by CNNMoney.com about a week ago.  A Nebraska family is struggling to make ends meet, living "paycheck to paycheck" on a $150,000 income.  Needless to say, they have taken a virtual beating on in the PF blogosphere.  Franky, Boston Gal, Free the Drones, Kevin at DebtFree4ever, and Moneymonk all wrote about the Schuett family.  The concensus seemed to be that the Schuetts need need some financial education, to put it lightly.

I came across another story yesterday in New York Magazine about a man actually living paycheck to paycheck.  Robert Gonzalez works from 6AM to 2PM as a security guard in New York City for $10 per hour.  He receives a bi-weekly paycheck for $676 and has two kids to support.  As the article begins, Robert has $4.41 in his pocket.  Just enough to get him through the day which, luckily, is payday.

To me, the Schuett's problem is obvious.  Brian's ego.  The rental properties are failing.  His ego is twice wrapped up in this.  After making the decision to invest in these properties, he wants to make it work in order to avoid feeling like a failure.  Also, since losing his job, the investment properties give him an outlet to feel like a productive human being.  That should be obvious to his psychiatrist wife.  But, I guess it's the old story of the cobbler's kids going without shoes.

Robert's problems run a deeper.  No doubt he has made mistakes.  He was involved in some illegal activities in his youth, or at least with some people who were involved in illegal activities.  He dropped out of high school, but through night classes, got his diploma by age 20.  He took some community college classes, but finished with $6570 in student loans and no degree.  His bank statement reads -$146.53, so he pay eleven dollars to have his paycheck cashed.

Occasionally, he splurges.  Like spending $19 for a movie ticket, hot dog and soda by himself.  It's his favorite treat to himself, but not one he can afford often.  Immediately after receiving his paycheck, $200 goes to the mother of his children, $40 to his father, $62 to the cell phone company.  A ten dollar metro card, and a five pack of ramen noodles, and half of his paycheck is gone before his it sees sunrise.

This is living paycheck to paycheck.  I would ask what world the Schuetts are living in, but I know the answer.  The same one as the rest of us.  See, we don't live in Robert's world.  When I read the Schuett's story, I rolled my eyes and shook my head at the obvious mistakes they are making.  But I understood them and empathized (not sympathized) with them.  Reading Robert's story was like reading some Charles Dickens novel.  It couldn't be real.  Yet, it's more real, and I'm sure more common than the Schuetts.

“If I could come home with at least $800 or $900,” Robert says, “I’d be happy.”

How much would make the Schuetts happy?

Comments

[frankyj]

Thanks for the link, but I'm currently updating my blog to the new blogger. It was suppose to take "a few mins"...but it's been more than that. Curse you blogger!

[NCN]

I've found that for most people, if they make 10K, they spend 11K, if they make 50K, they spend 60K, and if they make 150K, they spend 200K...
it's amazing!

There's this dude I know, he "owns" 4 houses, 2 horse barns, and countless acres of land... but he can't afford to buy lunch half the time b/c he's "broke"... why? he lives above even his considerable income...

PS... I've moved to dedicated hosting...
could you update my link url to read

www.ncnblog.com

i've dropped the blogspot...

Thanks,
NCN

[Armin]

I understand that the sense of desperation in Robert's situation increases the empathy we feel. I would say however, that we are all responsible for ourselves.
Maybe if Robert chose not to live in on of the most expensive cities in the world, that $10 an hour would go a long way.

[Dan]

Im sorry but no matter what city of the world you live in 10 dollars + two kids doesnt even come close to making ends meet. It just doesn't.I do feel for Robert becuase that situation occurs all the time everyday. Ive been in that situation before. You cant earn more because you dont have the right degrees or skill and you cant gather that skill because you have to work your life away to pay basic needs of your life. Its a hard cycle to get out of.

[Prince of Thrift]

Great post, as a shift supervisor (specifically overnight) I only make $9/hr and I struggle...Lot of the things are my own mistakes....I would love the $150,000/yr, for that matter I would love the $21,000 that Robert makes, though with my current debt I need $25,000...of course I could do quite well once I payoff that nasty debt and live on what I make.
At that point my savings will grow by leaps and bounds.

[moneymonk]

Good comparision. It just go to show that it's not your paycheck, is your net worth. You can be broke given earning any income. It's understandable when you are making a low wage and are broke.

It's just more embarrassing, when you are making 6 figures and broke! making that kind of money it is no excuse to be broke.

[Daisy]

"Im sorry but no matter what city of the world you live in 10 dollars + two kids doesnt even come close to making ends meet. It just doesn't."

Yeah, it does. The ends meet. Sometimes they're a little frayed, but they can meet. It just requires a willingness to, oh, cut the cable, not have a cell phone, etc. I've done it. I can't even say it was all that uncomfortable. Spoiled rotten Americans! 10 an hour is good, if you're not in frigging NY!

[financial freedumb]

LAMoneyDude! Wow, I come back to your site after the hiatus and you're still up to your same tricks. Writing great posts.

I gotta say, I see the Schuett's around in real life more than the Robert's...even amongst my own friends.

In response to: "Maybe if Robert chose not to live in on of the most expensive cities in the world, that $10 an hour would go a long way."

That's true. We can all make decisions...we could even move to another country. The point is though, in America, someone wants to live in NY, they should be able to work their way up and do it. Unfortunately, I think in Robert's case, even if he wanted to move, imagine the costs involved there...2 kids...housing...new job. Can it be done without any savings? A tough choice I'd say.

[financial freedumb]

Puts my recent decision to leave my job into perspective, that's for sure.

[Medicated Money]

Good post, LA Money!

To be honest, we were the Schuett's roughly a year ago! Definitely hard to see the writing on the wall when you have your head stuck in the sand. Change will only come when they see it for themselves instead of others pointing it out!

As for Robert, I too feel for the guy. He is trying to make it, but is finding it more and more difficult! IMO, the problem lies in not the government or the system, but rather in society itself. Our society glorifies the "easy life" where everyone is living the high life. Robert mentions this briefly; unfortunately, too many people find out too late that hard work in school, staying out of trouble, and not worry about impressing the Jones will get you ahead in this world of ours.

Unfortunately for Robert, his mistakes have led to other's making decisions for him. He obviously feels he has lost control which in turn is driving him deeper into the depths of poverty. I can only hope he can gain control of his life and turn it around!

-Medicated

[vm]

Maybe robert should have kept his pants on and choose not to breed. If you're making ten doallars and hour and have no way to make more than that you should really not breed.

how did he think he could afford children. I feel no empathy for people like him, he's just perpeptuating more poverty thru those poor kids who probably live just as poor a lifestyle.

I hope people like him freeze to death.

[lamoneyguy]

VM,
so, poor people should not be allowed to procreate? Grow up.

[asap1011]

I sympathize with Robert, but at the same time I recognize that $10/hour definitely carries a long way if you budget financially. Instead of movie and hot dog, he can make some healthier and cheaper food at home.

Robert also quits his second job because he considers a 80 hour per week work load impossible for his health. But if eats healthier food than top ramen and hot dogs, he should be in better conditions to work. In addition, if he looks across the street, the analysts that work at investment banks work consistant 100 hour weeks and under enormous pressure, although most analysts do move on after two years.

After all, I think poverty is an escapable cycle if the person has much drive and dedication. I consider poor education and backgrounds, or any weakness or inadequacy in that matter, simply things that we have to overcome in order to succeed. Of course, Robert comes from a disadvantaged family, but if he was determined to succeed as a child, he would have worked hard and gotten a scholarship to an Ivy League and he wouldn't be doing what he is doing right now.

[Schwamie]

For all those that think he can just pick up and move to a cheaper area, I might remind those who have never experienced divorce or having to be separated from their children that to move away means that he might not have the opportunity to have a meaningful relationship with his offspring. Sometimes financial decisions are put aside for the welfare and benefit of the children even though it is true that better employment or cheaper living could be had elsewhere. Just a thought.

[C wood]

Yes, it would be nice if we all had a 50 yr old's mentality when we were kids, but most of us were busy being kids when we were in grade school and high school. Anyone who lives paycheck to paycheck is one check away from being homeless, even those on this blog.

[P. Harvey]

I sympathize with Robert, because I, like him, am living paycheck to paycheck. but unlike him I have chosen to do something about it. In February I started auto depositing $50 into my savings account. I called the bank and asked for paperless statements and I removed the account from my online banking. Out of sight out of mind. And since the money isn't in my checking account it doesn't get spent, because we do spend every last dime in that account, just simply because we know its there. To say the least there is around $400 in my savings now and it might not seem like a lot to some people but to me it is something to be proud of. But I had to make that decision to not keep living the same way. And Im taking the steps one of which led me to this article. So to Robert and others like us make the decision, move forward, even saving $20 a paycheck would be a start to taking that first step. Because like some of you said there isn't really any excuse for being poor.

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