not being strapped for cash is possible for pretty much anyone in the lower-middle class and above, and even those in the lower class could get there by stabilizing their finances so they can take some risks to increase their income (i.e. night school, quitting a bad job for a better job, getting CDL and financing a truck, etc).
It’s easy to say “stabilize your finances!” but on a practical level it’s almost impossible to do when there’s no wiggle room. You can’t stabilize any finances if you’re taking out payday loans in order to pay rent every month. It’s not like there’s any money to be put into savings if you’re making $2,000 a month but putting $1,000 toward rent, since most people rather like to eat.
I’m thankful to not be in that situation, personally, but it’s not something you can just wish your way out of. Even your examples require a certain level of financial breathing room that people don’t tend to have when every dollar is spoken for. You can’t finance a truck if your DTI is already high. You can’t take CDL training or night school if you have to work two jobs just to keep food on the table.
I’ve heard plenty of stories about lawyers and doctors having trouble keeping up with debt payments because they got caught trying to keep up with those wealthier than them.
But if you get into that scenario, you can just sell the supercar or downsize your house or whatever. That’s not really an option for people who are living paycheck-to-paycheck.
So I don’t think “strapped for cash” is a good metric for economic class, income is,
I think income divided by local cost-of-living could be, maybe.
At the end of the day, irresponsibility with money is still a problem for sure. And keeping-up-with-the-joneses is probably a problem for some people. I’m not one of them, and none of the people I know are either, but I suppose some people have that issue. In my experience, though, most people who are struggling financially are not in those situations. They’re just trying to keep their heads above water.
Do you actually know anyone who’s in this situation?
In my experience, it’s not a choice they’ve made. Some people are bad with money, to be sure. I’m related to a few. But they don’t typically just decide they’re going to blow August’s grocery budget on a new wardrobe; they have a job opportunity dry up after they already moved for it, or they had a messy divorce because their spouse was abusive, or they poured a ton of money into some career training that turned out not to give them any real, marketable skills. Some bad choices, some unavoidable occurrences, some terrible luck, but nothing that crosses the line to them being frivolous.
Thirty years ago, a family could weather one or two of those, no problem. My dad got laid off not too long before I was born, and he was the sole earner for our family. He got hired fairly soon after, but in the meantime we were fine.
I don’t live a whole lot different than my parents did then. We have more kids than they did, but I’m in a higher earning potential career than he was. Plus, my wife and I are both employed. Yet if either of us were laid off, we would not last long on savings.
One thing I’ve learned as I get older: yeah, people are irresponsible. But the generations are pretty much the same, and trying to pretend otherwise is a good way to get clicks on your article but a bad way to actually get any meaningful insight about people. So if our generation is having more widespread problems than our parents’ generation did at this age, it’s probably not because we aren’t as responsible as they are. Something systemic probably changed.