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by WalterBright 2305 days ago
A majority of people are significantly above the poverty line. If they're living hand-to-mouth, they are mismanaging their finances.

For example, I know a fellow who told me he could not handle the slightest disruption in his paycheck. He was driving a new car, living in new house, wore expensive clothes, and was starting a family.

A friend of mine living in an apartment told me he was unable to pay his bills. I asked him what the payment was on his new car. I suggested he sell the car, and buy a car he could pay cash for. He surprised me by following my advice and was able to reduce his stress about his finances.

My father, an officer in the AF, was once tasked with counseling the privates on their finances, as many were unable to pay their bills on the local economy. (The AF really tries to be a good citizen in the community where the base is located.)

The privates were paid every two weeks. Half of them drank their paycheck away and ate steak for the first week, and begged/borrowed/stiffed others for money the second. They received the same paychecks, but half could not manage their finances. My father would counsel them, work up budgets for them, all for naught.

2 comments

A lot of people overspend their income because they're eating out. Restaurants are an extremely expensive way to get fed. Even a quarter pounder at McD's is $6, but I can get a half pound of good steak from the supermarket for $2. My drip coffee costs me $.03 per cup, compared to $4 at Starbucks. You can fry yourself 3 eggs for $.50.
Not sure where I read this, but there was some article about the top skills you can learn that can help you save up money. Cooking was the top skill.

Apart from the upfront restaurant bills, also you can save money health wise on the longer run.

I'd personally file it under the entertainment budget too. It's fun!
Part of the problem here is that restaurants in America are extremely expensive. It's cheaper to eat out in other industrialized nations in my experience. Worse, they try to hide the prices from you by not including tax in the advertised price, and also expecting a "tip" for the service because they don't pay their servers.
> A majority of people are significantly above the poverty line. If they're living hand-to-mouth, they are mismanaging their finances.

Or, another scenario, the 'poverty line' is arbitrary and hardly an indicator of universal financial power.

In other words : the poverty salary 'line' tells you nothing of burden, it's just a magic number. If an individual has multiple unknown burdens, their 'poverty line' is at a much different , unknown, level.

I live in California, mostly. I know of families that live (far) below the 'Poverty Line', but because they send everything they can back to their home country for the rest of their family to live on.

Suddenly an individual at the poverty line is supporting 3-7 people in another country; and has no real legal way to justify or exemplify the practice in any legal financial way that would signify their increased burden - they become essentially a lost statistic and generally lie on their taxes due to fear of losing the arrangement.

Individuals that lead this style of life tend to go back home periodically simply because the burden of living in the US with a sub-poverty income isn't realistic.

tl;dr : The poverty income line alone means next to nothing in personal context. Don't assume that you can dwindle every persons' life down to fitting within it, that's not realistic. Saving money is absolutely important, I agree, but let's not just assume that that kind of financial flexibility exists for every individual. It'd be nice, but it's fantasy.

> exists for every individual

I said "a majority of people". Not every individual.