Exactly what is living paycheck to paycheck?
Paycheck-to-paycheck means a lifestyle in which a person does not save money and would incur significant financial stress if he or she does not receive his or her next paycheck.
Paycheck to paycheck is an expression used to describe an individual who would be unable to meet financial obligations if unemployed because his or her salary is predominantly devoted to expenses. Persons subsisting paycheck to paycheck have limited or no savings and are at greater financial risk if suddenly unemployed than individuals who have amassed a cushion of savings.
The thing about living paycheck to paycheck is that it can occur at just about any income level. That’s because for all but the lowest income group, it has as much to do with spending and lifestyle as it does income.
Before jumping to conclusions about who can’t save, we need to make sure we understand the difference between expenses and spending.
Living paycheck to paycheck is normal? Apparently so.