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What does it mean to live paycheck to paycheck?

Simply surviving nowadays often seems to require some financial acrobatics. After all, according to reporting from Time, inflation remains at near-record levels, forcing you to pay more for the items you use every day. If you do not have enough money to pay for these items, you either must live without them or reach for your credit cards.

It is not uncommon for individuals to have little or nothing in savings. In fact, as U.S. News and World Report notes, roughly 64% of Americans currently are living paycheck to paycheck. Even though the expression, “living paycheck to paycheck,” is a common one, you may wonder exactly what it means.

Nothing left over

Living paycheck to paycheck simply means you only make enough money to pay your monthly bills without having anything left. Your monthly bills probably include your mortgage or rent, utilities, insurance, student loans, credit cards and transportation costs. Even if you earn a decent salary, it is not hard to see how higher prices can quickly eat up every cent you make.

No safety net

Financial advisers often recommend saving what you spend on six months’ worth of essential items. If you are living paycheck to paycheck, though, you are unlikely to be able to save even a few dollars every month. Therefore, you may never be able to create a meaningful rainy day fund or financial safety net for yourself.

If you lose your job or experience a cut in pay, living paycheck to paycheck is likely to leave you with insufficient money to survive. Ultimately, exploring debt-relief options, like bankruptcy protection, may help you get back on track.


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