Saving Money is a Privilege

One that many do not get.

There is a ton of personal finance advice out there from a bunch of people who call themselves experts. Live below your means. Put extra money into an emergency fund. Save for retirement in your company’s 401(k), and make sure you’re taking advantage of their match. Invest in index funds rather than individual stocks or actively-managed mutual funds. When you get a raise, don’t fall victim to lifestyle creep — use that extra money for savings or retirement.

So much of this advice is centered around saving money — whether it’s in an emergency fund, a 401(k), an IRA, or a taxable investment account. These savings are more important than anything else — if you don’t have savings, you need to skip eating out, ditch the daily latte, and just say no to avocado toast.

Pick up a side hustle if you need to, live on beans and rice, find a cheap apartment with roommates to split the rent, and live like a serf until you have enough savings to retire. Anyone can do it!

Well, I’ve got news for you: no the fuck they can’t.

More than 60% of Americans live paycheck to paycheck. You can find a collection of stats about that here, if you’re interested — I’ll be pulling a lot of my stats from there and the other studies linked from that page.

First off, let’s describe “living paycheck to paycheck.” According to a quote from that Bankrate article:

“A person is living paycheck to paycheck when their paycheck is used to cover their necessary expenses with no money left over,” explains Dr. Thembi Aquil, a financial wellness coach.” There is no money for anything extra, and often the paycheck may not be enough to cover their necessities.”

Now, the CBS news article linked above mentions that 21% of paycheck-to-paycheck consumers spend money on nonessentials like restaurant spending and other expenses unrelated to basic living. That seems outlandish, but it still means that 79% of the people living paycheck to paycheck (about 48% of the general population) are not indulging in nonessential spending.

Instead, they’re putting every last cent into paying their basic living expenses — and sometimes it still isn’t enough. According to PYMNTS, 31% of people surveyed who identified as living paycheck to paycheck had issues paying their monthly bills. A strong majority of Americans (72%) do not feel financially secure, including 26% who do not expect to ever be financially secure.

Almost three-quarters of Americans do not feel financially secure, and just over a quarter feel like they never will. On top of that, nearly half of Americans live paycheck to paycheck without spending anything on nonessentials. Let that sink in.

If, at this point, you’re going to start saying things like “well, if people didn’t buy expensive coffee,” don’t. Personally I make zero judgments on people living paycheck to paycheck who spend some of their money on nonessentials. Buying a nice coffee for yourself once a week is not outlandish, it’s survival.

Trying to survive on strictly beans and rice for a long period of time until you magically become financially stable somehow is draining as all get-out. Sometimes, you have to make a small splurge for yourself in order to make life worth living, and if it’s a $6 coffee once a week, I’m not about to argue with that.

And, to anyone who wants to argue that saving that weekly $6 will eventually land you financial freedom, tell me what kind of financial freedom that $312 buys in a year. Any savings that most of us can scrounge together tends to be used for emergencies, and it’s amazing how quickly that weekly $6 will get eaten up by other things.

What it boils down to is that when you are hanging on by a thread, you often need something to make life worthwhile. In that way, maintaining your mental health via a nice coffee once a week is both valid and encouraged. Don’t let a bunch of millionaires who masquerade as “personal finance gurus” tell you otherwise.

That, by the way, is another thing that bugs me about the advice that goes out to everyone living paycheck to paycheck. All of those financial gurus who are dishing out personal finance advice are millionaires and have been for a while now. I’m talking about people like Suze Orman, Dave Ramsey, and Robert Kiyosaki — they’ve all been rolling in money for decades because of their financial advice.

I don’t know about you, but I’m not about to take advice on day-to-day spending from someone who became a millionaire 25 years ago. Whatever advice they might have is likely outdated at best and outlandish at worst — the whole “make coffee at home” bit of advice is so wrong at this point that it’s a trope, and a shitty one at that.

At one point, they may have had some good points. These days, however, they’re so far removed from having to live paycheck to paycheck that they cannot be trusted to give advice to someone in that situation in this, the year of our lord 2023. You want advice from someone who is described as a “financial guru,” look for someone younger who hasn’t had fame for more than a few years.

Erin Lowry seems to be a decent starting point from what I can find in a 10-minute Google search. Her book came out six years ago and she falls into the millennial bracket, so she’s likely experienced things like “being broke” and “having massive student loans” more than Dave Ramsey ever has.

That said, I don’t have time to read her book or do a ton of research on her, so maybe keep taking the general advice of “financial gurus suck” to heart. Generally, the people who give out financial advice to people living paycheck to paycheck are trying to sell you something — a book, a secret method, a subscription service, something.

Generally speaking, a lot of “financial gurus” got rich in no small part due to their ability to sell books and the like that talk about how they got rich. They’re much like Donald Trump was back in the 90s and early 2000s: their image is someone who is wealthy, and they make more money off of that image, ensuring that they remain wealthy.

These people don’t have student loans, expensive rent, or any other financial worries that most of us have. They haven’t seen the cost of a loaf of bread in decades, they don’t have to worry about a broken-down car or a rise in gas prices, and they haven’t had to count pennies in an Aldi since before the turn of the millennium.

What this all adds up to is the fact that saving money is a privilege that many people do not get. Having savings is a privilege that is generally afforded to those who don’t live paycheck to paycheck, which again is only about half the country. And, while there are ways to get yourself out of poverty and the paycheck to paycheck cycle, most of them boil down to either luck or the circumstances of your birth.

It’s easy to say “just get another job,” “pick up a side hustle,” or “don’t spend so much on coffee,” but it’s much harder to do these things than people realize. Yes, there are plenty of jobs out there, and those jobs are paying more, but everything is more expensive too.

In my town, they just upped the starting wage at McDonalds from $13.50 to $14.50, which is both a decent raise and also not enough to cover the cost of inflation these days. This is especially true when McDonalds is often unwilling to offer more than 30 hours a week to many of its employees for fear of — gasp — having to pay for their benefits.

Even the places offering $15 or more, echoing the whole “fight for $15” movement, are 11 years too late — we’re starting to get into “fight for $22” movement territory at this point thanks to inflation. At this point, $15 an hour isn’t a living wage in most big metro areas anymore, especially taking into account the whole “getting way less than 40 hours” thing.

Also, working low-wage retail or food service jobs are demanding and exhausting, especially when you have to work several of them to make ends meet. The general public is generally terrible to work with, and if you work one of these jobs and have any energy left after a shift, I have no idea where you get it. On top of that, we live in a country where having multiple streams of income, in whatever form that takes, is basically mandatory for most of us.

(Hilariously, that article I linked refers to another “financial expert” who suggests that side hustles aren’t the best use of our time, as though most of us have much of a choice in this matter. For those of us who work side hustles, we often take what we can get.)

You can’t budget your way out of poverty, and no amount of financial discipline will break the paycheck to paycheck cycle for many of us because the system is designed to keep us in that cycle. Wages are kept as low as possible by design. The federal minimum wage hasn’t gone up in 14 years, and our economic system, put in place by Reagan and a number of Republicans who came before him, is designed to keep most workers from getting ahead.

What’s worse, for a lot of employers, a minimum wage is necessary because if they could legally pay their employees less, they absolutely would. Hell, a lot of them still do — wage theft is the most prevalent form of theft in America right now and has been for a while.

It is in most employers’ best interests, at least according to a lot of economists, to pay their employees as little as possible to keep costs down and keep profits up. Sometimes that means breaking the law and paying a meager fine — it’s still cheaper in the long run to just cheat the system and pay up if you get caught — and that’s a big if.

Ultimately, the notion that “anyone can save money,” and especially the whole FIRE idea that anyone can save huge chunks of their paychecks to reach financial independence, is insulting at best and actively harmful at worst. Saving money is a privilege that not everyone can afford, and the notion that a person can budget their way to financial freedom is simply an impossibility for quite a few of us.

The people who try to tell you that anyone can reach financial independence — hell, even just financial stability — are shilling garbage, often to line their own pockets. People who get ahead in this world are almost always people who were born in a good ZIP code with family money, and even that isn’t a guarantee anymore.

I was born into an upper-middle class family with a lot of advantages in my life, and barring a major windfall, I’ll probably always have a lower standard of living than my parents did. I’m still better off than many other people though, since I have a college degree, student loan debt that was paid off in full years ago, a steady job in a good career, and a mortgage.

I have trained myself to be good with money to the point where my partner and I have a pleasant (if sometimes tenuous) life where we get to enjoy a lot of extra pleasures like dining out. I have a rigorous budget that I stick to as much as possible, I pay off my credit cards in full every month, and what debt we do have is manageable.

And yet, I recognize that all of that is the result of my privilege. I have the ability to do this not because I’m better or smarter than people who live paycheck to paycheck, but because I was blessed with a lot of privilege growing up that landed me in an advantageous position. I didn’t make good choices, I had good choices — choices that a lot of others don’t have and likely never will.

Inequity is the law of the land at this point, and the people at the top of the socioeconomic ladder have a vested interest in keeping the rest of us from getting to the top. There is almost no chance for us to get there, just the faded and broken promise that is the American Dream: that anyone can succeed if you just try hard enough. The American Dream is on life support and in desperate need of immediate emergency care if it is to survive.

I will say this again: you cannot budget your way out of poverty. You cannot just magically put together a detailed budget that will pull you out of the paycheck to paycheck cycle and manifest an emergency fund. Maybe at some mythical point in the past you could’ve, but those days are, generally speaking, long gone.

We need to stop pretending that billionaires are somehow our betters and that our politicians will save us. The latter are mostly in the pockets of the former, and the majority of them on any side of the political spectrum don’t have our best interests at heart. The primary reason I vote for Democrats (and why you should too) is that their platform is not based on turning America into a white Christo-fascist theocracy, and I feel like that’s not a lot to ask for at this point.

Thankfully, workers are starting to figure this out. Union interest is at its highest rate in quite a while, and workers are starting to realize how much power they have over their employers and capitalism as a whole. We have the ability to bring this broken system that doesn’t serve us to its knees, we just need to coordinate, work together, and quit infighting.

Ultimately, the premise that anyone can save money if they just put their minds to it is bullshit. It takes a lot of privilege and good luck to get to that point these days, and the people who say that it doesn’t are almost always out of touch with the realities of life in the middle and lower classes.

If you’re living paycheck to paycheck and feeling guilty that you don’t have an emergency fund, don’t let those jackasses get you down. You are not less worthy or any less valuable as a person because of that.

I know that those are just kind but empty words and won’t pay the bills, but sometimes it helps to be reminded that our lives have value beyond creating wealth for someone else. You are more than just a cog in a machine — you are inherently valuable as a human being. Don’t let some wealthy financial guru dipshit tell you otherwise.

Be well out there.

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