this post was submitted on 27 Aug 2025
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The difference between "call a plumber, the sink is leaking" and "I'm dedicating my weekend to DIY a pipe repair" is measured in dollars per hour.
My life changed when I move up a tax bracket. Knowing I had the financial flexibility to hire a professional (or afford a maid once a month) when I needed help really changed how stressful day to day chore routine has been.
Sure, but my point is you don't necessarily need to move up a tax bracket to be financially stable, you need to carefully manage your money to maintain an emergency fund so you're not screwed if something goes wrong.
Making more money makes this easier, but it's possible at most income levels.
If you can keep up an efund, you don't need to rely on predatory lenders or pay late fees, which dramatically improves your ability to keep that efund filled. Having access to cash helps make more reasonable decisions, maybe you'll still spend the weekend DIYing a fix, but it'll be a choice.
Sure. But it's like drinking out of a martini glass. Saying "you can do it without spilling a drop" is true relative to physical balance and personal circumstances. A combination of personal discipline and good fortune means you can get by without any income. But as soon as one or the other slips, you're in trouble.
I've lived up and down the income scale, from squeaking by in college to living it up as a well-paid professional. To say it's "easier" is a serious understatement. When you're sitting out in 15° weather for a bus that's an hour late to take you to a job that brings in $10/hr, knowing you can't afford to go grocery shopping tomorrow if it doesn't show, the concept of a budget feels very theoretical.
Then your income exceeds your expenses. That's as much a benefit of having a higher income, as a consequence of a savvy budget. And a cash savings account comes with its own costs. Short term cash savings means less long term compound investment. It also potentially means deferred capital accumulation. If you can't go to work without a car and you can't fix your car without taking on debt, then you can't afford to carry a positive balance. If you can't afford a dishwasher, you're spending time and energy manually scrubbing dishes when you could be sleeping or working overtime.
On the flip side, if you're running a massive surplus then you can build a passive income through investment. Walk in the door with $1M in your wallet, get a (very conservative under most market conditions) 5% ROI, and you're looking at the median household income with zero days worked.
It's a mug's game to think the economic balancing act is just a question of personal choices. And that's before we get into the feedback loop of poverty - wherein people are effectively trained to think short term by selection bias, as potential longer-term investors get fucked by short term fluctuations in the economy.
Look at the statistics, plenty of people with higher incomes live paycheck to paycheck and don't have an efund. Not having money in the bank is more often a behavioral problem than an income problem.
The real issue imo is that nobody seems to get a proper financial education, and resources vary greatly in quality.
Sure, but the compound investment returns will be dwarfed by short term debt interest payments (credit card, personal loans, etc). Far too many people float credit card debt so they don't need to touch investments. That's the problem cash is intended to solve, and you can mitigate that opportunity cost with money market funds and high yield savings asks accounts.
Everyone's circumstances are different, but people frequently have more options available to them than they actually consider.
For example:
Obviously individual circumstances differ. My point is that if you have no cash reserves, your anxiety when literally anything goes wrong can blind you to other options (I know because it has happened to me). If you have the fallback option of just paying out of pocket for a fix, you'll probably also be able to take a step back and consider other options.
I've had a cash reserve since I worked my way through college. Sometimes rebuilding that cash reserve sucked and meant I had to eat really cheaply and not go out with friends. I made just over minimum wage (about $9-10/hr) while attending college full time and renting an apartment (shared a bedroom because I couldn't afford my own room). I know how hard that it because I did it. I remember push starting my manual transmission car for weeks because I didn't have the time or money to replace the starter.
I learned to repair my own car, and I've been doing my own maintenance since, even though I can now afford to take it to a shop, though I do refuse the more dangerous jobs (e.g. anything with high voltage or in the steering system). I also rode my bike + bus for a few years to save money and improve my fitness (10 mile ride, so not super close, and I was the only one doing it).
I'm not saying everyone should fix their own cars or ride the bus and bike, I'm saying that not having a cash buffer can lead to desperate decisions. Do what you can to create a surplus each month, even if it's just a few dollars, and save that for a rainy day.
Yes, a higher income or asset balance makes things easier, but not having that doesn't make it impossible, just harder.
Poverty is a completely different beast with its own set of causes and possible solutions. I'm not saying everyone can just "pick themselves up by their bootstraps," I'm saying most people can do better and create a cash cushion.
But yes, family and community culture is a huge part of the problem and reduces the chances for people to better educate on managing finances themselves and break that cycle.