Would you ever live paycheck to paycheck? Or have you in the past? If you are now, or have in the past, you’re not alone. According to a recent CareerBuilder survey, 40 percent of Americans rely on their next payday to make ends meet. And 37 percent say that they “sometimes” need to rely on the next payday to make ends meet.
Apparently this is actually an improvement from 2008, where 46 percent of Americans were living paycheck to paycheck!
So, what did people say they’d be least likely to give up, even if they really should? These are listed in order from last choice to give up to first:
· Internet access
· Cable TV
· Mobile phone
I think this ties in to another post of mine which asks are you really poor if you these kinds of things? To me, if you’re living paycheck to paycheck, you give up whatever you have to in order to stop living that.
But that’s easier said than done – and once you’re accustomed to a certain lifestyle, it’s hard to give it up.
So, what are the consequences of living paycheck to paycheck, according to the survey?
· You don’t save enough – or anything at all. According to the survey, more than a quarter of Americans don’t save money on a monthly basis.
· You miss bill payments at least once a year
· You decrease contributions to your retirement fund (if you had any in the first place).
I think the biggest consequence of living paycheck to paycheck would be fear. Always worrying what will happen if you have an unexpected expense, or someone loses their job or gets their hours cut back.
So, the question is – how does this happen? I can’t think most people like living paycheck to paycheck. I’m sure plenty of studies have been done on this, but to me, the 2 most likely reasons are:
· You don’t know how to live any other way. Financial lessons are learned. I was raised in a house where fiscal responsibility was paramount. My husband was raised in a household where they lived paycheck to paycheck. He freely admits that I keep him in line.
· You can’t live any other way. Your expenses completely out weigh your income, with your bills so high that you can’t possibly get on top of them.
Over the next several weeks, I’m going to try to devote a post a week to how to improve matters if you’re living paycheck to paycheck – everything from cutting back on costs to negotiating with credit card companies and looking into bankruptcy.
Have you ever lived paycheck to paycheck? How did you break this cycle?