I read somewhere that most people in the US are definitely not paycheck to paycheck. The article I read claimed it's around 15-20% of the working population.
But living paycheck to paycheck to most people definitely does include spending one’s money on non-bill things like lotto tickets, consumer goods, restaurants, and things beyond their means.
Instead of Netjets you can own your own jet(s). Instead of restaurants you can buy them or have the chef come to your house. At the extreme end, you can start a space program.
The sky’s the limit!
The difference between $900 pants and $50 pants is more than lifestyle creep. I see it as indicative of a stratified society. Previous times had wealthy paying more for clothes but it showed in workmanship or materials.
In the words of Lucille Blutb:
How much could a banana cost, $10?
I see Lifestyle creep as an individual gradually spending more for meals and cloths
You might be able to make ends meet by cutting the 401K and yoga classes, but if that's what you need to cut to eat the next month, what do you cut to eat the month after that?
This guy was obviously not living anywhere near paycheck to paycheck.
By this definition I was not living paycheque to paycheque, but my situation was definitely not good, compared up someone who made better money but spent it each month on nonessential.
and inside that group - people who made one bad decision, and people who have neuro-divergent issues that make managing the budget more of chore than it is for someone without the issue.
Whether that is because you simply dont have much money, or you spent it all on something frivilous is immaterial.
I'm happy to say I wasn't privileged but fortunate if that satisfies you.
He didn't want to work on the building he was doing a lot of work for the Exploratorium. His idea was to put in the 4th floor and have me try to complete the building to get a certificate of occupancy. So that is where I lived.
Williamsburg at that time was very different. One could not park on the street with out a chain to hold your car hood shut. One's battery would be stolen otherwise. The office I worked in was full of people who were concerned that I lived in that neighborhood.
So I had a very good set-up and I felt a lot of gratitude for my situation but it didn't feel much like a privilege. Sweeping the floors of that apartment was almost pointless for the first year or two...
Your comment really brought it home for me.
Now imagine that, but no family support and one of you has cancer.
This exact debate showed up on another thread here the other day. While I agree with you, I was surprised to learn that many people view it to mean that tdon't have anything extra *after* they've done all of their socking away of money each money. Which is weird to me, but hey.
Dictionary seems to agree, Merriam Webster says: "to spend all of the money from one paycheck before receiving the next paycheck", not specifying that you can't have spent the money on semi-essentials that could perhaps be moved by a few months but you'd need to catch up with sooner or later
There is also a way to borrow money short term from your 401k that turns into an unauthorized withdraw if you don't pay it back in a relatively short time (a year?)
These all seem reasonable.
[0] Yes, there are rules to prevent the worst abuse, mostly limiting you to doing so once every three years, the small total, and the need to fill out paperwork explaining the unexpected cost.
That’s pretty much paycheck to paycheck if your savings are that low.
seriously, everyone in this thread should watch Financial Audit and see how people outside the silicon valley bubble really live. That show has extreme examples to be sure but there are so many people like this
Not an excuse for using credit cards, just an explanation why you should sympathize.
In the US everyone is basically forced to have a credit card and use it but many have little financial literacy, especially immigrants.
However, a debit card usually covers the floor of needing a card of some sort to pay for a lot of things.
How do you even get a mortgage without a credit score?
Credit access in the US is ludicrous, you can be a terrible borrower (late or even tons of charge offs) and still get credit offers for credit cards. A lot of people then get into trouble because somewhere in their psychology the credit limit counts as money they "have" even though they understand they have to pay it back. That's why you have people talking about literally freezing their cards in a block of ice to control their spending.
Poorly, that's how.
When faced with a hypothetical expense of $400, 63 percent of all adults in 2022 said they would have covered it exclusively using cash, savings, or a credit card paid off at the next statement (referred to, altogether, as "cash or its equivalent")
https://www.federalreserve.gov/publications/2023-economic-we...).
Anyway, it still doesn’t seem like most people live paycheck to paycheck, according to your link:
> Some financial challenges, such as a job loss, require more financial resources than would an unexpected $400 expense. One common measure of financial resiliency is whether people have savings sufficient to cover three months of expenses if they lost their primary source of income. In 2023, 54 percent of adults said they had set aside money for three months of expenses in an emergency savings or “rainy day” fund—unchanged from 2022 but down from a high of 59 percent of adults in 2021.
Edit: That said, the part you quoted supports GP, the part in quotes seems to be what they actually asked. Credit is probably not what most would think of as "cash equivalent", that would be debit, checks, and transfers like Zelle.
16% straight answered like that, if you scroll down to the next table for non-cash-equivalent payments:
> Put it on my credit card and pay it off over time
Suppose that you have an emergency expense that costs $400. Based on your current financial situation, how would you pay for this expense?
If you would use more than one method to cover this expense, please select all that apply.
a. Put it on my credit card and pay it off in full at the next statement
b. Put it on my credit card and pay it off over time
c. With the money currently in my checking/savings account or with cash
d. Using money from a bank loan or line of credit
e. By borrowing from a friend or family member
f. Using a payday loan, deposit advance, or overdraft
g. By selling something
h. I wouldn't be able to pay for the expense right now
https://www.federalreserve.gov/publications/2024-supplementa...
Edit: The people running this survey also had the same thoughts about ‘maybe some people are choosing to not this directly even though they could?’ And added this question:
Based on your current financial situation, what is the largest emergency expense that you could handle right now using only your savings?
1. Under $100
2. $100 to $499
3. $500 to $999
4. $1,000 to $1,999
5. $2,000 or more
This is discussed just below the stats @Jabble sites!
To explore this potential difference between how people would pay for a small, unexpected expense and whether they could pay for it with cash or the equivalent, the survey included a question asking people what the largest emergency expense was that they could handle using only savings. Eighteen percent of adults said the largest emergency expense they could handle right now using only savings was under $100, and 14 percent said they could handle an expense of $100 to $499
By this definition, I would imagine a very large number of US households fit the mould.
https://www.noahpinion.blog/p/paycheck-to-paycheck-and-five-...
>>> According to our analysis, in 2024, around a quarter of all households fall into this camp, an increase from 2019.
They define living paycheck to paycheck as spending 95+% of income on necessities (housing, food, etc.)
[1] https://institute.bankofamerica.com/economic-insights/payche...