barrybbegault
My Voice – The Daily Rant!

Living on the Edge…Paycheck to Paycheck

I just read an article in Reuters San Antonio dated Sept. 19 2012, that stated that more than two-thirds of Americans are living paycheck to paycheck. That means that these people have NO savings and if they lost their jobs, would probably be homeless, and among the starving poor! And some of these are what would be considered very middle class families!

It’s getting harder and harder for Americans to save! Now this may sound very frightening, and it is but I wonder about surveys like this. I mean college students are mostly living paycheck to paycheck.  Young couples  who buy houses probably live paycheck to paycheck until they can get some money back into their savings.

There are articles where both the husband and wife have college degrees, both work but cannot seem to save.  I can see their problem in saving. Just a few years back, the consumer prices of groceries and fuel did not swing up and down as much as they do today.  For instance, my gage on the price of food is celery.  I know strange, but I am a Cajun and we use celery in almost ALL our dishes! Just three short years ago, celery was 59 cents a bunch at the local food store. Now, that same bunch of celery is $1.50 -$1.99!

What is the key to undercutting how much we have to pay for everything is the price of fuel!  Diesel, which is the least distilled motor fuel of all and should be the CHEAPEST, is hovering around $4.00 a gallon here around Houston! So what does that mean? Well everything is delivered by truck, and most trucks run on diesel! So every time diesel goes up a dime, it’s money out of our pocket because the store owner has to raise the price of his goods to pay for the rise in the fuel that he has to pay . Put that together with the average person getting either no raises or very small raises significantly more of our paycheck is going to the rising cost of gasoline and food!

When Obama took office the price of gas was $1.95 a gallon. Now it’s $3.56 in Houston.  So that’s $1.61 a gallon increase over the last 4 years.  So that’s an 133% increase in gas over the last 4 years!  Take my celery example for food, and it comes out to around %154 increase using the current price of $1.50 ! So what does that say about Obama and our economy?  Between 2002 and 2008 gas prices soared 385%.

Now I have read may articles that quote that a sitting president has nothing to do with the price of oil, and I can see that. The world economy determines the price of oil. The more demand, the higher the price. It used to be when oil would drop below $100.00 per barrel, there would be a significant drop at the pump. Not seeing this lately.

So where is this all going? Oil drives ALL the economies. Living paycheck to paycheck is new to some people. A lot of us have SOME money in the bank, for small emergencies, but not enough for a catastrophic event like the loss of a job. Those that used to be able to put some money into savings are using that money for the more expensive fuel, and groceries and well, everything else!

Some of us also have adult children moving back in because they cannot afford the high cost of an apartment.  Some apartments charge over $1,000.00 for a 1 bedroom! Add to that the fuel, groceries  a person starting out just can’t afford the costs!

Also children who have lost their jobs, or gone through a divorce cannot handle the extra expense of a restart so they move back in with their parents. Most likely, the parent needs to  give some financial aid to the returning child until they can get back on their feet,  so that further erodes the amount of money that the parent can be save, causing the parent to not have the money for savings; no savings then back to paycheck-to-paycheck living.

A lot of the people who are now living paycheck to paycheck are experiencing this for the first time and don’t know how to handle it. I know I have cut back on a lot of things I used to take for granted. We buy grocery store products in place of name brands, if the grocery store product is the same quality, and taste.  We don’t eat out as much anymore.  Eating out costs so much more than it used to.  minimum eating out, except for fast foods, is around $25.00  – $30.00 for two people.  It’s probably go up about $5 – $8. I remember eating at the cafeteria would cost us about $20 for two. Now that around $31 for two! Big increase!

I plan my errands so I use less gasoline by doing all my errands at once. I have changed out all my light bulbs to compact flourescent.  This has given us some savings. We monitor electricity usage, making sure lights are off in unoccupied rooms, fans are off in unoccupied rooms. Every little bit helps. Like I said before we buy store brands where possible.

Our biggest savings is our mortgage. With escrow, it’s under $1000.oo per month. My wife wanted to move to a smaller home, but the price of a smaller home is two to two and a half times more expensive! I would have to spend at least $1500.00 per month on mortgage! Having a mortgage $600 to $700 more than we pa now would be ridiculous! I told her just don’t go upstairs!

Finally, the problem some people have is that they have no budget. Yeah,  I know budgets are hard but knowing what is coming in and knowing what is going out is very important! It’s the first step in controlling costs.

I have a financial application called Quicken. I enter all my spending and deposits, and I download from the bank a few times a week to reconcile the account. Being able to see at a moments notice what my financial status is, helps greatly in determining my budget.  We used to overdraft our account a fe time a month and at $35.00 per overdraft that adds up quick! Now, we have only had 1 overdraft in five years! And that was  because we used our bank debit card and hadn’t reconciled our bank account and had less in the bank than we thought!

So plan a budget and stick to it! I am planning on getting a second job  to pay off debt and save.  It may not pay much but like my wife always says, “Slow and steady wins the race!”

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