If You’re Living Paycheck to Paycheck…Watch This

This was so incredibly eye opening! Thank you Ramit — this is the type of stuff I love to get corrected on! These talking points are huge fodder for doom and gloom misinformation. Thank you for bringing reality to the situation and giving actionable plans for folks to improve their situation

@ramitsethi I like your videos but your sponsorship require an annual subscription? And today’s sponsor is not the only one. 🤔

A personal trainer, a good mattress and quality food are an investment. For your health, future and longevity. The greatest wealth out there. 😊
Yes, I do buy organic blueberries.

The "making financial decisions" was us. You could say we lived paycheck to paycheck - but we were putting ~20% of our income into investments. And we still had enough coming into the checking account for all the monthly bills and discretionary spending. And then there was the cash cushion that we could have lived on for a few months, longer with a bit of belt tightening. We didn't get into that situation overnight, but it was worth it.

Ramit skipped Step Zero — make enough income / have any margin at all

Hi Ramit - can you do (or link to a video if you have done) a video for retirees? figuring out how to handle our money during retirement is not easy for us as a couple (complicated differences include huge health issues and varied emotional views of money).

Feelings don't care about your facts

Yes Ramit. Thank you.
The economy is good right now and has been on the rise for the last few years.
What would your advice be in the volatile times like we have coming?

It would appear that there are many Americans who believe those stats and have that mental attitude about their money and voted accordingly.

Hey Ramit, great video! I have a question about handling savings goals, like for a vacation. When it’s time to use the money you’ve saved, what’s your approach? Do you add the amount back in as income for that month and track the expenses as part of your budget or do you have a different approach? Thanks!

Counterpoint: most of people who go on Caleb's show think they are a 5/10 when in reality they are 30k in debt, don't pay their taxes on time, and have a few bills in collections. Just because they feel they're in a good position, doesn't mean they are. Also, I don't care if people's net worth increases 23-37% if 90% of that increase is because of their home. I know too many people who's only retirement plan is the equity in their house.

At 60k with a family of 6, o am truly living paycheck to paycheck k to paycheck. So it burns my biscuits to see how these sites cool the numbers!

At 50k with a family of 6, I am truly living paycheck to paycheck. So it burns my biscuits to see how these sites cool the numbers!

Thanks for sharing the Truth with your subbies, we need this badly. Americans have waaay more💵 than reported🙏🏿😊

No

I know this guy who says he lives ptp, forgetting that he contributes to 401k and builds equity via mortgage.

😂 "No" service! People would pay for that!

"Everything is fine and if you're poor it's your fault"

Ramit, I wish you would give more advice to college students. Most of us are truly living paycheck to paycheck and that's not an exaggeration. I'm lucky enough to get scholarships so I don't have to pay for school, but nearly everyone i know has 2 part time jobs while going to college.

I have to call myself out and I fit #1! I always told myself we're living paycheck to paycheck, but we were each investing 25% to our 401(k) and then additional to max our IRA. I had to do the math on what ours would be has we not and then I slapped myself. 🤣

I must not be the median American household , because we're barely able to tread water right now and have lots of credit card debt just to pay for the necessities. I like Ramit's advice, but he's definitely out of touch with a large swath of America.

I felt targeted when you said my espresso machine is not an investment…

Say it with me, PRESIDENT TRUMP!!! 🇺🇸🇺🇸🇺🇸🇺🇸🇺🇸🇺🇸🇺🇸

This is a question for those who like to use Ramit’s method of separating money with multiple checking and saving accounts: do you find this system easy to maintain? Obviously, you set up automatic transfers to simplify some of the process , but overall it seems like you have to transfer a lot of money around when you spend I.E. save for a trip in savings account and then spending money for that trip by transferring back to a checking account / credit card. Huge fan of the content! I’d just like to get a sense of others perspective .

Great video. I respectfully disagree about your point on “other” investments. While I agree there are diminishing returns when you cross the border of good quality to luxury to me there is real monetary value in some of the items you listed.
-Having a quality mattress for quality sleep has real health benefits that can in long run reduce disease or medical bills
-putting money into better quality clothes can save money in terms of longevity , repairs etc. also depending on your field it may help with confidence, executive presence etc which can result in monetary gains such as increased sales, promotions

I think the viewpoint is nuanced because the calculations aren’t as easy to get as let’s say an ETF however to me it doesn’t make the gains any less real

OK....
I am LITERALLY LOL at the No As A Service bit...
;-)

I've seen people say they are middle class living paycheck to paycheck making $280k per year, spending $60k on housing, saving $70k in investments and living a 'modest lifestyle' only spending $60k/year on fun while living in a $1 million dollar house in New York. Some people really get out of touch when they start making lots of money. I think part of it is your social circles change as you gain more wealth. If your college or high school friends aren't making the same as you, then you might move on to other friends that do or even make much more than you. They continued saying that their friends make $250k per month and fly on chartered jets regularly. The truth is, there is always someone poorer than you, and there is always someone richer than you, so you will always compare yourself to others, and you will always think you are part of the middle. The audacity to say you are living "paycheck to paycheck" in this situation is ridiculous though.

you mentioned that the guilt free is also for travel but when is it that the percentage for savings relate to saving for a vacation and the percentage of guilt free? like do I cut my guilt free by 5% to put to savings to save for the vacation or what exactly?

bro, stop playing soft core economist, you're embarrising yourself. your averages are means not medians..... so talk about misleading ....

You went from "82% of Americans rate their financial situation as good or very good" to "feelings are not reliable data" in less than 30 seconds Ramit.

I Love saying No too. All those things where they try to sell you something and will give you a freebie for listening Im like WOOHOO I can say No and get this freebie, if it's worth my time.

Hi are you promoting a what’s app group on investing ?

I'm investing 1500 to a ring systen as me and my wife work at ngiht and live in a bad part of town and that is an investement as it is security

I totally agree! People are comparing about the economy but they spent millions on Amazon Prime Day.

This is a great video.

I feel like 35% is so high for guilt-free spending. Is this an indicator that I'm more frugal or maybe some kind of scarcity mindset?

I’m going to conduct a survey of all sheep farmers world wide asking them where I should go on my next vacation.

Okay but median is so vague??? Is it a normal distribution? No it’s not. Not a great statistically relevant argument. Go speak to people in low income areas.

Americans don't believe in data.

Calling data about people's feelings being unreliable and then using another source about people's feelings, isn't a good counter.
Granted, I do agree with you that a majority of Americans are not living pay check to pay check, because they have pensions and retirement plans which they pay into.
And just because they made dumb financial decisions, and now have a lot of debt to pay off, doesn't mean they aren't living pay check to paycheck. It means they ARE dumb AND living pay check to pay check.

NO

Ramit is so sad average people don't agree with him 😂 people aren't doing good in this country and voted that way - no amount of stats and telling people things are great will change that

This dude needs a Snickers, and a gummie. He’s gonna stroke out before he’s 50 being wound up this tight.

I often struggle determining whether something is worth the expense or not. I have a hard time quantifying the value of my desire or the future enjoyment I'll obtain out of a purchase.

More fact checks!

Do you recommend financially preparing for a trump administration? As in, liquidating assets, pulling cash from bank accts, etc?

Need more advice on people making 50k down my guy. I make 180 in year's, I wasn't born or brought with wealthy family or very well education. I wish I brought home 8k a month. Knowing what I know now, I for sure will be wealthy with that amount of money. But I do like your break down with money but I need more money lol to

Well, technically they are living paycheck to paycheck. I think what is implied with 'living paycheck to paycheck' is wrong, as it implies that people are not making enough money, which isn't always the case. As for the savings / checking balance, I think it's a bit more nuanced than that, since 30% of Americans are at least 6k in debt, so I'm assuming their savings / checking account are technically lower. We've seen in your podcasts, for instance, that people are holding onto debt even if they have money in their other accounts.

Of course, I do agree that people tend to latch onto stats that give them an excuse to hold onto their current spending habits. ;)