I guess "living paycheck to paycheck" has different meanings to different people. To me it means if I miss a paycheck I can't pay my normal bills. If I have savings to cover a temporary job loss then i'm not living paycheck to paycheck. Majority of people I know seem to fall into my definition where they would have to put there food and gas on a credit card or not pay rent if they missed a paycheck.
https://crr.bc.edu/briefs/why-are-so-many-households-unable-to-cover-a-400-unexpected-expense/
- About 40 percent of households, spanning the income spectrum, say that they couldn’t cover a $400 unexpected expense.
- In fact, some of these households actually do have enough to cover this modest expense, but they feel constrained by credit card debt.
- Overall, the analysis finds that the vulnerable households fall into two main groups:those with low incomes, low educational levels, and/or a job loss; andthose with moderate to high incomes but with substantial debt, such as credit card balances, mortgages, and/or student loans.
- This widespread lack of precautionary savings is likely one reason why many households have trouble saving for retirement.