This is an important point. Sometimes you have to spend more up front to avoid paying more over the long term. My strategy is buying quality on sale. Score!
It was really brought home to me when I moved away from home. When I was a kid my mom bought the cheapest sheets available. I think she said they were muslin. It wasn’t like muslin I knew about later, but they were definitely thin. We kids would wear those sheets out (like rips and holes) in about a year. Then, she’d go buy more cheap ones. Oh, and they were scratchy and uncomfortable.
When I was making my own money, I bought more expensive sheets, and guess what? I’d get tired of the design before they’d ever wear out. I’ve never had sheets get worn like those cheap sheets when I was a kid. And I wasn’t even paying the big bucks! Just “nice” sheets. Although I do have a set of Frette sheets that cost $900. Well, they would have cost that if I hadn’t bought them at TJ Maxx for $90. Score, again!!!
You don’t necessarily have to give them access to debit your account for set bills - I have autopay set up for my mortgage , but I set it up with the bank where my checking account is, not the mortgage servicer.
Definitely true about the fatalism. Being unemployed was considered something to avoid at all costs, at least in the mindset I was brought up in. Probably didn’t help that Dad got laid off and was unemployed for most of middle school either.
But as I’ve got older and been laid off and/or fired a few times, I’ve realized that there are plenty of jobs out there, and it’s not my father’s and grandfather’s era where it really paid to try and stick with a job for decades. We don’t have pensions anymore, and often the best way to make more money is to change employers/jobs. I can’t think of a permanent job (not including contract gigs) change that didn’t end up being a better situation when everything was said and done, even if it was abrupt and stressful when they happened.
Yes indeed. Unless you’re living at a level where you’re not sure if you can cover your bills each month, autopay is fantastic. I typically don’t put water or electricity on autopay, just because they’re both highly variable, and I’d rather eyeball them before just paying them out. That’s a monitoring kind of thing, not a funds situation. But my mortgage, Netflix or my car insurance? Absolutely autopay them.
Yes autopay. Nobody sucks money out. My bank sends it to them on my schedule according to my orders.
For variable bills like utilities or credit cards there’s a fairly new feature called “e-bill” wherein the vendor can send the electronic equivalent of their monthly statement to your bank and you can pre-authorize the bank to pay that on the last day before its overdue.
And either pay the balance, a fixed amount, or the balance up to some maximum. My electric bill is typically ~150/mo. So I have the bank authorized to pay whatever the bill’s bottom line is, not to exceed $225. If something goes apeshit and they send me a bill for $12,000, the bank is only going to send them $225. So no overdraft for me and then the humans can work to get to the bottom of the problem.
The bank notifies me via email when each e-bill arrives with the amount included so I can do a quick reasonableness check on whether the amount is about right or is nuts. Or go dig into the details if I care to. Which I almost never do. But I’m never having to remember to go chasing for info. they shove the amount I need at me when I need it and no more.
Between auto-charging stuff to my credit card for the loyalty points, auto-paying the routine fixed stuff like car loans, and auto-paying with limits via e-bill for the variable stuff, all my consumer billing is on autopilot and no 3rd party has access to directly debt my checking account.
This is a solved problem.
I was very late to the online approach to consumer billing. But for a 3-4 years now I’ve been a total convert. For somebody like our dear @wolfpup it would be a very good solution. I used to be lots like him although probably for different reasons.
I have both my electric and gas bills set to the ‘level payment plan’, where the amount never fluctuates by more than a few dollars each month. Like @LSLGuy, I get an email notice 5 days before the automatic debit that tells me how much this month’s bill is going to be. My city bill (water, sewer, trash) fluctuates greatly only during the summer, when we’re watering the lawn and garden. My auto insurance bill is the same each month until my yearly review, when it invariably goes up a few dollars. That was also true of my mortgage monthly debit (our house is now paid off).
If there’s a problem with any of the above bills, I can go online and temporarily halt the autopay feature.
And, as has been stated several times upthread, I no longer have the need to balance my checking account to the penny each month.
As an aside, I think the only checks I’ve written in the past 12 months are to charities for a contribution in the name of a recently deceased acquaintance.
My impression is that the focus on saving vs career advancement as a path to security is one of those memes (like “it’s impolite to discuss your salary”) that is engineered to help out the “business owner” class. A double barrelled “don’t increase the cost of labour by looking for better work” and “if you see a worker struggling financially, it’s their own fault for not having enough self control to reign in their spending”.
I’ve been through a lot of lay offs, but I’ve never personally been laid off. I’m thinking I would have done a lot better at career (and salary) advancement if I had been at least a few times. It would have put a fire under my butt to look for better work.
This happened to me rather unintentionally because we were living out of state when my husband was in graduate school and we had to move around to accommodate his needs. So I worked in various places, basically I had a new job every year for a while, and always with a modest bump up. The upshot is after thirteen years in the field I’m now making twice my starting salary. I mean it’s for a nonprofit job so I’m not Ms. Moneybags, but still. Now that I’m finally getting paid what I’m worth, I have no interest in leaving because they are very good to me and it’s pretty cushy, with flexible hours and a lot of vacation time. It would be difficult for me move up from here without having to work a whole lot harder than I want to.
When working class folks socialize they’d never talk about their own money, except to ruefully lament the lack of it. When owner-class folks socialize, where and how much they’re making is the only topic of conversation.
Part of it is that people often subconsciously or consciously feel that anyone who makes more than them is a douchebag and anyone who makes less is a loser. Or that’s how they think people will feel about them.
Different people also have different mentalities about money. Working class people often have fixed or nearly fixed incomes tied to the market rate for their services. Owner and many professional class people tend to have more of a growth mindset - increasing sales, expanding their business, advancing in their organization.
This has got to be one of the most far reaching conspiracy theories I’ve ever seen.
Company A offers a match on your 401k contributions up to $10k per year, and this is exploitive, because they know not everyone will take them up on it. They should just give the $10k to the employees in pay, and let them do what they want with it.
Do you believe that wellness programs that company’s offer are also just shill programs to make company’s appear to care about their employees?
Do you believe that health insurance programs that company’s offer and pay approx. 80% of the premium costs are just manipulations?
Being financially literate and being financially responsible are two different things. But in most cases you need to be literate to be responsible. And responsibility in a lot cases is making good choices.
Interesting that many of the comments above surround not being able to save for retirement because needing to meet bills due paycheck to paycheck. In the longterm, it’s important to save for retirement so that when you are later in life, you may not be in a condition that will permit you to continue to work and earn at the rate you currently do. What’s more important, satisfying the short term wants today vs. saving for the longterm needs of tomorrow? The government has made it extremely financially beneficial to save for retirement today, and people of all incomes have these mechanisms available to them. Company’s also encourage retirement savings and provide additional benefits for people making retirement savings decisions, because for many people it is an important long term planning option for their lives, and they value employers that help them do that, and will stay longer at companies that provide such benefits.
For the latter, Michael Moore did a whole documentary about it, but yeah, the thrust is that by tying healthcare to your employment, companies get a captive workforce.
So, providing additional incentives to your employees that promote a better outcome for their lives is exploitive and makes them captive? I’d wager that most people don’t feel this way. I’d also wager that most employers would rather have employees that are also concerned about their long term health, wellness, and income security over their lifetime, than those that are not.
Why do employee unions fight for better benefits for their members as opposed to just more cash? Are unions in cahoots with employers to exploit the labor force?
The great thing about America, is that you can go and try and work for whoever you want to…hell, even start your own business if you want to. The purpose of benefits are that they are used as a value item primarily as a recruiting mechanism to try and draw employees to come and work for your company.
It’s less that individual companies get a captive workforce than that many people can’t change jobs or go into business for themselves when insurance is tied to employment and there are exclusions for preexisting conditions. I have always had the health insurance for my family - because at every job I had, my insurance was better and cheaper than what my husband’s employer (at the time) offered. But the last time I changed jobs (in 1994), I went from working for a city where my health insurance cost me about $10 a month to working for the state where my insurance was at least $100/month in 1994.( It was close to $600/mo when I retired last year) My son currently works for that city and still pays about $10/month for his insurance.
So why did I switch jobs when the insurance was so much more ? Because insurance cost is not the only thing that matters. I absolutely was limited in which jobs I would leave for - I wouldn’t have left for a job that paid twice as much but didn’t pay for any part of the insurance premiums , I wouldn’t have left to go into business for myself. But my husband wasn’t limited at all - in fact at his current job, few of his peers take the company insurance. Their wives have better insurance.
Interesting that the linked article provided by @ASL_v2.0 was virtually all about employer-provided snacks, and spoke not a whit about 401ks. Also, this statement from that article appears to be at odds with his positions (bolding mine):
And all of these perks shouldn’t overshadow what really makes a workplace good: good pay, reliable benefits, a safe environment.
Which is, of course, the exact point that @Omar_Little just made.
That’s absolutely NOT the reason they offer things like wellness programs, on-site clinics, etc…
The reason they offer those things is because these things lower insurance costs- either they do so directly by making employees healthier, or carriers are offering discounts for having employees sign up.
I used to work for a large healthcare company, and we used to partner with the wellness companies and the carriers to provide that sort of thing (we provided the actual medical care- the quicky-physicals and the on-site clinics), and the value proposition wasn’t “You can lock your workforce in.”, it was always “It’ll cost you less to do this than to just pay for employees with diabetes/heart disease/etc…”
So maybe not exactly altruistic, but not necessarily anti-worker either. If nothing else, health insurance seemed to be perceived as a cost of doing business- companies past a certain size and with a certain proportion of white collar workers couldn’t NOT provide it and attract quality employees.
One reason why employers offer benefits instead of cash is that it’s more tax-effective to do so. Businesses can deduct the cost of employee health insurance, while it’s not income to the employees for either income tax or payroll taxes. The same is true for a lot of other types of benefits, so long as the employees don’t have the option of taking cash instead. Since many people don’t need all the benefits that are allowed in the tax code, there’s “cafeteria plans” where employees get to pick which of many offered benefits they get. This allows them to attract more employees, as they’re able to offer better salaries + benefits to more people where the benefits are as meaningful as wages to the employees but they don’t have to pay tax on them. Places that can only offer you more cash need to offer more of it than the amounts spent by places that are able to offer benefits for things you already pay for.
BUT the trade off for the free cash is that the only 401K plans are one s the company offers. Yes it is better that nothing but when your choices are We will give you this stock/bond mix based on the decade you retire with no input from you, anyone with a little bit of brains may opt for a Roth IRA and pick a couple of solid index funds.
Well, benefits basically translate into another version of cash. Better retirement? More cash. Better health coverage? More cash. More time off? More cash that you aren’t spending on psychiatrists and/or buying firearms and whispering to them that you are the Angel of Death and the Time of Purification is at hand.
Wages and benefits are both necessary because one without the other is potentially crippling.
