This entry is a follow up to one that I published 3 years ago. Like that one before, I’m posting this on March 12th because of the significance the day has for me. It was on March 12, 2013 when I became completely free from credit card debt. It was one of the proudest and happiest days of my life. But now, 5 years removed from the day and from all credit card debt, I am still struggling with every paycheck.
Here’s the big difference between my 2015 post and this one, I make more money per hour than I did then. However, there were periods in between that I did not. At one point, I was working 2 jobs just to get by. Now, I work a 40 hours per week full-time job that pays me the most I’ve been paid since 2011. So, how am I still paycheck to paycheck with no savings?
One thing I’ve learned over the last few years is that our money has less value than it used to. What does that mean? How can one dollar not have the same value as it used to? One dollar is one dollar, right? Well, yes it is. But, you used to be able to get a lot more with that dollar than you can now. Every time there’s a price increase on an item or service, there doesn’t seem to be a matching decrease. There’s certainly not an increase in my wages.
The Middle Class in America can barely make ends meet. We are being smothered by debt and an increase in costs of living. As I stated, I work a full 40 hours per week, and I have nothing. I’m not alone. It’s a massive problem. It’s been over 8 years since I’ve used a credit card. Everything I buy comes directly from my account. This is why people have such debt, it’s the only way to save money. Isn’t that ironic?
I recently read that rich people spend about 30% of the income per year while Middle and Lower Income earners spend 90% of their income. I definitely fall into that 90% area. No, it’s not me spending frivolously. It’s me spending on things I can afford that I need. I need gas in my car, I need food, and I need health insurance. And every once in a while, I need to be social. I just can’t afford to do as much as I would like to do.
When I received my federal tax refund a month or so ago, I immediately spent it. Half of it went to pay off some work that I had done on my car. I also bought some new clothing. That money went to pay for things I needed that I couldn’t always afford. This is the struggle I deal with on an almost daily basis. I have very little buying power in the economic state the country is in.
The best example I can give anyone about what happens when Middle Class people have more buying power is the experiment that the Atlanta Falcons did with their concessions. When they moved into their new stadium last year, they lowered the prices of all of their concessions by 50%. They made 16% more on food and beverage sales than they did year before. How is it possible to decrease the cost that much and make more money? It’s very simple, they increased the buying power of their customers. It’s very common for people that attend football games to get to the stadium early, cook food and drink beer in the parking lot, and then go in right before the game starts. The prices of food and drinks inside stadiums are outrageous. In Atlanta, fans were (on average) going into the stadium 2 hours earlier than normal, buying more food, and even buying more merchandise. Their experiment worked because they lowered cost and made their customers’ money have more value. You can read more about that in this article from ESPN.
While what the Falcons did is very commendable and a great example of making dollars more valuable, their model is not the only solution to the problem. We need our wages to increase. Overall cost of living is still going up. Gas prices are rising. There could be an increase in the cost of cans of soup, beer, and other items we enjoy. We need more money and we need it to be more valuable.
Our roads need to get fixed. Tax money is used to fund these repairs. Less tax money coming from the Upper Class means less tax money going to fix the roads. History has shown that in times like this, tax cuts on Middle and Lower Class will go away. We are the ones that get taxed more and more to fund things. Our buying power decreases even more in the process. We have less money to spend. Our mental health declines as we worry about paying bills and providing for ourselves, or our families.
Also, poor road conditions can lead the need for car repairs. I know very well that I cannot afford any major car repairs right now and some of the roads I travel on just on my way to my job are not good.
I grew up in a single income house. Many people in my generation did. We had two parents in the house, but only one had an outside job. A second income wasn’t needed. It is now. I don’t want to get into a big discussion about politics in this entry, but the decline of single income households goes right along with everything else I’ve been talking about in this entry and it started in the 1980s. Again, our buying power has decreased because our money is not as valuable as it used to be.
Five years removed from debt. My bills get paid every month. That isn’t my problem. I know how to budget myself to make sure that happens. I just don’t have enough money for other things. I don’t see any real hope with our system as it is. It’s just more of the same that doesn’t help the people on the bottom. Something needs to change or else we’re just going to keep spinning our wheels with nowhere to go and we’re going to always wind up empty. Empty bank accounts, empty wallets, empty cabinets, and empty inside.
Very often when I try to wrap up one of my blog entries, I don’t really have a conclusion in mind, but I try to end on a positive note. I’ll say that I don’t know what to do about whatever situation I’m talking about and I’ll say something vague like “I’ll just keep on going.” But, I think in this case I’ll end it with a quote from the 20th Century philosopher, and more famously a Hall of Fame Major League Baseball Player, Yogi Berra. He said “A nickel ain’t worth a dime anymore.” Unfortunately, it was true when he said, and it’s even more true now.