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
· Driving
· 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?
I used to live paycheck to paycheck and it was really stressful. I would never want to go back to that way of life. I feel much better knowing that I have enough money to pay the bills and still have some to save and spend.
I grew up in a household where money seemed to come easy so I really didn’t learn about budgeting until I moved out. It was a rough few years until I learned the concept of not overspending.
Miss T @ Prairie Eco-Thrifter recently posted..Pros and Cons of Paying Off Your Mortgage Early
Miss T – yeah, sometimes you have to learn things the hard way. Valuable lesson to learn though!
It took me a looong ass time to stop living paycheck to paycheck. Now when I look back at it, I wonder WTF was I thinking? I’m glad I finally grew up and matured (and still continue to mature) financially. Cheers! Eddie
Eddie recently posted..Don’t Let Fear Sucker You Into Payment Protection
Yeah, growing up is over rated
, but learning to handle your finances is always a good thing..
I don’t have cable tv. My internet access is only $25/month with TekkSavvy. My mobile phone is my only phone. I don’t have a landline. And I work in another city and start at 6:30 am, so there’s no way I’m taking public transportation. I would have to wake up at 4:30 am.
I was living paycheque to paycheque when I was only working part-time. It was rough. The only way the cycle broke was when I got my full time job. Now that I have a full time job and that same part-time job, I try to save a little more conservatively. It is so nice though to have a little bit of breathing room in my savings.
MakintheBacon$ recently posted..Making Sense of My Sense of Adventure
Hey Bacon
Sounds like you are really watching your expenses and doing all the right things – and working super hard!!
Ha ha-I just wrote about this. Thankfully me living paycheck to paycheck (at this time) is by choice as I funnel most towards savings or debt payments. It hasn’t always been this way of course. When I was younger, we lived paycheck to paycheck and though I knew it wasn’t “normal” I didn’t really get out of the cycle until about a year ago. I wanted a better life with less stress!
bogofdebt recently posted..More wisdomy words
Yeah, I liked your post Bog – it was good. Congrats on making changes for the better!
It took me a while to stop living paycheque to paycheque. It’s hard, unless you have a budget and know how much money you actually make and spend. That was the turning point for me. Once I realized that my expenses were actually quite a bit less than my pay, I saw how much money I was wasting and that motivated me to start saving instead of spending everything away and getting into debt.
CF recently posted..So you want to get a job in computers?
We don’t live pay to pay and probably haven’t since we were in University but that’s because we set ourselves up that way with always having and Emergency Savings Fund. We have mates that make good money and have always lived pay to pay and are either broke until next pay or would seriously suffer if that pay did not come in. Not everyone is so lucky that they have extra money in the budget but if that is the case we would have to make more money to save. The other option is If I could save even $3 a week by not buying coffee or cutting back somewhere I would do it. Small steps lead to big gains if you have patience and motivation to succeed. Good Post! Mr.CBB
Canadianbudgetbinder recently posted..August 2012 Net Worth Update-Canadian Budget Binder
Thanks MR. CBB. It sounds like you are in good shape – and your mates could learn from you!
Pingback: Payday Loans – an overview on them and why you should avoid them
Pingback: Weekly Roundup #3 | This Is Common Cents
Pingback: How to negotiate with credit card companies
Pingback: Negotiating with utility companies
you always should have some savings, because there’s always something that can happen for ex. sickness..
Rueben Fillerup recently posted..operante opinie
Very true!