Paycheck-To-Paycheck Nation: Why Even Americans With Higher Income Struggle With Bills

23 hours ago
Originally published on December 16, 2020 11:02 am

A house. Two cars. A kid in college. Debi and Nick Lemieur had all the markers of a middle class life. But they both remember one purchase — Nick's $600 bass amplifier — that prompted one of the biggest fights in their four decades of marriage.

"He didn't tell me he hid it in the trunk of the car, and I found it," Debi says, laughing, 14 years later. "To me it was like, oh my God, how much will this screw with our budget?"

An unexpected bill like that is what separates millions of Americans from financial disaster. In fact, survey after survey for years has found that most people in the U.S. live paycheck to paycheck.

Today, amid the pandemic, a third of U.S. adults say they are having difficulty covering everyday costs such as food, rent or car payments. While people with the lowest incomes face the biggest challenges, even some households making above $200,000 are straining to pay basic expenses.

For many families, walking the tightrope of financial stress, with little to no savings, is hardly a pandemic-specific condition. Over a year ago, more than a third of Americans said they could not cover an unexpected $400 home repair or hospital bill without going into debt — or at all.

Indeed, the paycheck-to-paycheck lifestyle has long been a widespread affliction. Single mothers live it. Young professionals live it. Even college professors and retired tech workers live it, like the Lemieurs from Pennsylvania. They were among three households that let NPR look at their monthly budgets before and during the pandemic. The budgets offer a window into how life's costs can sometimes leave little financial wiggle room.

"What comes in goes out," says Debi Lemieur, poring over the spreadsheets with her husband, Nick — a weekly drill since the amplifier incident.

These individual stories, like anyone's, are complex. There are winding career paths and unexpected health crises, loans and credit card debt, difficult choices and a few regrets. But the economic backdrop, too, has been unforgiving even for those with good incomes.

For decades, U.S. wages have failed to keep pace with the rising costs of what many perceive as essential ingredients for a successful American life: good education and health care, a home and a family. Student loans are a yoke around young people the minute they graduate and keep many parents from retiring. Medical bills can set people back for years, as they did for the Lemieurs. A home mortgage and utilities can bite off half of a monthly income, especially in big cities.

A snapshot of monthly expenses cannot paint that full of a picture. But it shows how financial strain sustains as incomes change — a tight budget means ignoring a janky phone, while a bit more money can mean finally upgrading — and how life's setbacks and twists can add up.

"I don't feel like, even if I'm saving, I'm saving ... I'm ever going to get ahead of anything," says Rhonda Alvarez, a dental assistant and mother of two teenagers in Ohio. "I feel like it's a constant struggle, you know what I'm saying?"

"I shouldn't have to live paycheck to paycheck"

Rhonda calls them "little spendings." Nothing special or life-altering. New tires swiped onto a credit card. A last-minute birthday gift. Soccer cleats, shin guards and gloves for her youngest teenager.

Rhonda Alvarez, a mother of two teenagers in Ohio, is a dental assistant trained for "expanded functions" like assisting with fillings.
Rhonda Alvarez

"You don't think about it," says the 45-year-old. "Or you do after you've done it — you're like, 'God, what did I do?' "

Debt is powerful, which is why most Americans have it. For Rhonda, a loan helped her discover a dental assistant career she loves both for the work and for the pay. After never going to the dentist until she was 18, she now geeks out learning about gum surgery, earning about $45,000 a year.

A series of false starts came first. Pressure to be the first in the family to attend college. Then culinary school, with another student loan, and food-service jobs. A marriage and a house. A bankruptcy and a divorce.

Debt can also bog you down. When her personal crises piled up, and the sale of the dental practice where she worked pushed her into a new job, Rhonda felt overwhelmed by her loans and bills. She cashed out her retirement savings early and paid some of them off.

Still, she's kept several credit cards. You never know what might happen. Like a worldwide pandemic, perhaps. Or like losing that new job at the very start of it. Rhonda has deferred her mortgage and some utilities; life trudges on despite the global crisis. A minor surgery gets scheduled. Her oldest starts driving and needs car insurance. The younger one needs that soccer gear.

"You're trying to be careful and then you're like, this sucks," she says. "I make decent money now, and I shouldn't have to live paycheck to paycheck."

Rhonda wishes school would teach children money management. "It's way more important sometimes than algebra or geometry," she says. For herself, she's looked at going back to train as a hygienist, too. But it's another $30,000 in student loans — more debt she's not ready to take on.

"Up and down on a roller coaster"

While more education usually does mean more income over a lifetime, it's also expensive. The cost of college has more than doubled in just 20 years, and student loans are the fastest-growing type of debt in America. Many people use this money to learn a trade, like Rhonda — or Robi Hamilton.

Robi Hamilton spent virtually all she had to come to Austin for massage school. She says her life "blossomed" for the first time with full-time massage therapy work and generous tips.
Mary Inhea Kang for NPR

Robi, 28, spent virtually all her savings to get out of her home in Houston and move to Austin for massage school. Between classes, she worked at a salon around the corner, sweeping hair and doing laundry. Her boss paid for her state licensing exam as a Christmas gift, shelling out the $200 that Robi couldn't afford.

After moving to Austin, Andrew Mentzel has struggled to book enough gigs as an audio and video tech, which only got worse as the pandemic meant canceled live events.
Mary Inhea Kang for NPR

She now owes more than $10,000 in student debt, but has kept it in forbearance, or on hold, "trying to get to a point where paying my student loans wouldn't actually break me," she says. That debt relief plus full-time massage therapy work — $24 an hour with generous tips — had Robi feeling solid financial footing for the first time in her life.

"I didn't know what to do with myself," she says. "When you start making more money, you can upgrade your bills just a little bit. I got a new phone. I was like, 'This is a whole new world for me.' Still living — more comfortably — paycheck to paycheck."

The move to Austin proved more difficult for Robi's boyfriend Andrew Mentzel, 30. America's music capital lured him with the promise of lucrative opportunities for his line of work in audio and video tech. Back in Houston, a phone call or two had him running visuals for big oil board meetings or shepherding rock stars to concert sets. In Austin, he struggled to book enough gigs, even after slicing his rates.

"Once the shows stopped coming in, I was completely at a loss," Andrew says, "and I have been kind of pivoting ever since."

The pandemic has undercut both of their careers. Canceled live events meant no work for Andrew. Robi hasn't done much massage therapy since the spring, relying on unemployment benefits and occasional side hustles. Andrew is now baking at a restaurant for $17 an hour.

Bills are a prominent expense for the two — rent and utilities are pricey in places like Austin. The couple defray the cost by living with a roommate. They have also spent more during the pandemic, thanks in part to the boosted jobless benefits.

A new floppy-eared responsibility entered their life: a long-coat Dalmatian puppy named Libby, both the keeper of household sanity and agent of adorable chaos. Homebound life called for splurges at GameStop, Nintendo and Google for video games and streaming. Andrew paid off a TV he'd been financing and began a new plan for a bicycle that gets him out of the house.

Andrew and Robi walk their puppy, Libby. The pandemic undercut both of their careers. Robi has relied on unemployment benefits since May and Andrew leaned into his work at a restaurant.
Mary Inhea Kang for NPR

Financially, "it feels kind of like going up and down on a roller coaster," Andrew says. "I'm able to stay above water miraculously sometimes. But other times, it's too close for comfort."

"Panicky in our gut"

For the Lemieurs, after the amplifier fight, budgeting became serious business: a painstaking accounting of birthday presents and vet visits, car payments and utilities, that ran 12 pages long.

With three children, one expense or another has always popped up, but health care costs have always been the heftiest, as for many families. In the U.S., medical issues are a major reason people file for personal bankruptcy.

The Lemieurs' medical costs weren't just big, they were many. Their son with special needs underwent numerous therapies. They lost a daughter, who died after seven years of fighting brain cancer. Debi had her own cancer battle. Nick had heart surgery.

Nick and Debi Lemieur play with their dogs in their backyard. The Lemieurs instated a weekly budget review 14 years ago to account for all of their expenses.
Hannah Yoon for NPR

"We just never had the way to save," Debi says. To this day, health insurance runs almost $1,000 a month. At 64, Debi looks forward to ditching her high-premium plan when she qualifies for Medicare.

She believes they would've done better with more education. That's remarkable because she holds two master's degrees in classics, Latin and Greek. But in academia, without a doctorate, Debi became an adjunct professor — a higher-ed gig worker — making less than $30,000 a year. She couldn't afford to finish her Ph.D. after her health problems and a funding cut by the university.

Nick, 66, did not finish college. He fell into a solid job in tech, rising from technician to engineer managing software contracts. Then, a few years ago, his work got outsourced. Unexpectedly retired, he aced a community college course in 3D-modeling, but nobody hired him.

Nick picked up a school crossing-guard gig — to pay for the beer, he jokes — but had to stop during the pandemic. Debi's college wages lag in the summer and her tutoring dried up. They've deferred some bills, took their two cats off pet insurance, cut back on museum memberships and charity donations.

Looking back, Nick ponders whether their early start on children was what got them into the paycheck-to-paycheck cycle. What if they'd been more disciplined about budgets and savings earlier? Debi shakes her head. They never made enough money, she says.

"We just would have more savings and so it wouldn't be quite as panicky in our gut knowing that we're pulling from the savings," Debi says. "I think we still would be living paycheck to paycheck."

Copyright 2020 NPR. To see more, visit https://www.npr.org.

STEVE INSKEEP, HOST:

One-third of Americans have been struggling to afford basic necessities like food and rent - one-third. A big reason is job losses during the pandemic, but the truth is most households in the United States always live paycheck to paycheck. NPR's Alina Selyukh spoke with three families who face that reality.

ALINA SELYUKH, BYLINE: In their four decades of marriage, the biggest fight Debi and Nick Lemieur have had was over money - or a purchase, to be exact - an amplifier for Nick's bass guitar.

DEBI LEMIEUR: And he didn't tell me. He hid it in the trunk of the car, and I found it.

SELYUKH: This was years ago. Debi was teaching at a university. Nick worked at a tech company. They had a house, two cars, a kid in college - all markers of middle-class life. But this one purchase of passion threatens to break the bank.

D LEMIEUR: Oh, my God. You know, how much will this screw with our budget?

SELYUKH: It was only a few hundred dollars. That kind of unexpected bill separates millions from financial disaster. More than a third of U.S. adults say they could not cover a $400 emergency without going into debt or at all. A huge reason is that American wages have failed to keep up with three of the biggest costs families deal with - health care, education, housing. And so the paycheck-to-paycheck lifestyle is a widespread affliction. Single mothers live it. Young professionals live it. Even college professors and retired tech workers live it, like the Lemieurs from Pennsylvania.

NICK LEMIEUR: With three kids, we always had, you know, expenses for this thing, that thing, school.

D LEMIEUR: But there was a lot of health problems.

SELYUKH: Medical was always their biggest expense - a son with special needs, a daughter who died after seven years of fighting brain cancer, Debi's own cancer battle, Nick's heart surgery. In the U.S., medical issues are a major reason people file for personal bankruptcy. In July, Debi and Nick's budget was about $6,000. Almost a thousand went to health insurance alone.

D LEMIEUR: We just never had the way to save. We never made enough money.

SELYUKH: Debi thinks they would've been better off with more education, which is interesting because she has two master's degrees. But in academia without a doctorate, she's been an adjunct professor, a gig worker of higher education, making less than $30,000 a year. She couldn't afford to finish her Ph.D. after health problems and a university funding cut.

Nick did not finish college at all. He fell into a tech job. A few years ago, it got outsourced and forced him into retirement earlier than expected. Nick wonders about their now-rigorous budgeting and savings routine.

N LEMIEUR: Had we disciplined to do that earlier, it would've been better.

D LEMIEUR: I think we still would be living paycheck to paycheck. We just wouldn't be quite as panicky in our gut.

N LEMIEUR: Yeah.

SELYUKH: More education usually does mean more income over a lifetime, but it's also expensive. Cost of college has more than doubled in just 20 years. Most take on student loans, and that debt is a yoke around young people the minute they graduate - people like Robi Hamilton from Austin.

ROBI HAMILTON: I've been trying to get to a point where paying my student loans wouldn't actually break me.

SELYUKH: She is a massage therapist - or was a massage therapist - at $24 an hour until the pandemic left her leaning on unemployment benefits. She's kept her student loans in forbearance. And for the first time in her life, that job put her on solid financial footing.

HAMILTON: When you start making more money, you know, you can upgrade your bills just a little bit. So I got, like, a new phone. I was just like, this is a whole new world for me, living more comfortably paycheck to paycheck.

SELYUKH: Meanwhile, her boyfriend, Andrew Mentzel, has struggled. He moved to Austin from Houston doing audio and video tech work but has not been able to book enough gigs in the new city. He's now a baker at a restaurant for $17 an hour, feeling stuck on a financial roller coaster.

ANDREW MENTZEL: I'm able to stay above water miraculously sometimes, but, like, other times, it's too close for comfort. And somehow, I've just gotten used to this, like, fluctuation that I really should just be fed up with at this point.

SELYUKH: Bills are a huge portion of Robi's and Andrew's expenses. Rent and utilities are pricey in places like Austin. And overall, housing is another cost that's grown far faster than average wages. And spending - it's the linchpin of America's economy. During the pandemic, Robi and Andrew got a new puppy, a Nintendo Switch for a distraction. Andrew is financing a bicycle that gets him out of the house. Rhonda Alvarez, who's raising two teenagers, knows how that goes.

RHONDA ALVAREZ: Just little spendings here and there.

SELYUKH: She's a dental assistant in Ohio.

ALVAREZ: If I had a car repair, I would put it on a credit card. Or if I wanted to go out or, like, buy a birthday gift for somebody or, you know, things like that, they just - you don't think about it. Or you do after you've done it, and you're like, God, what did I do?

SELYUKH: Debt can be powerful. In her 30s, a loan helped Rhonda finally discover a career she loves both for the work and for the pay - about $45,000 a year. But debt can also weigh you down. After her divorce, Rhonda's car loan and bills overwhelmed her, so she cashed out her retirement savings early to pay them off. And those little spendings never really end. Her oldest started driving and needs insurance. The car needs new tires. Her youngest needs soccer cleats and shin guards.

ALVAREZ: I don't feel like even if I'm saving and I'm saving and I'm saving I'm ever going to get ahead of anything. You know what I'm saying? You're trying to be careful, and then you're like, this sucks. Like, I just - I make decent money now, and I shouldn't have to live paycheck to paycheck.

SELYUKH: But life keeps adding up.

Alina Selyukh, NPR News. Transcript provided by NPR, Copyright NPR.