https://www.cnbc.com/2024/04/09/most-of-americans-are-living... had 65% but the methodoly seems kind of terrible, your number might be better. Either way, its a significant portion, and even those with more generally don't have the ability to quit their job for 2 years.

Maybe you got it from Noahpinion: https://www.noahpinion.blog/p/paycheck-to-paycheck-and-five-...

over a third in the uk

I saw the same stat, and felt like their definition was too restrictive (basically you had to spend 100% of your income on your bills). Usually a small amount of extra income gets spent and those people are also living paycheck to paycheck for all intents and purposes.

Well that's what paycheck to paycheck means: you barely have the ends meet for essentials. Not that you're zero after topping 401(k) and your yoga classes.

<2 months rent p.m. and no savings basically, is a generous definition

Well, you threw 401k in there for some reason.

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.

Thing is it's absolutely possible to scale up your spending to any income level. And this is indeed what happens with many people, this is how you get these NYT pieces on households struggling on $500k. If you go by this the whole expression is kinda meaningless.

Maybe not any income level. Well, you can buy Twitter I suppose. But, yes, you can fly Netjets or whatever, buy supercars, have a bunch of personal staff, and eat out at Michelin-starred restaurants on a regular basis. And burn through certainly multiple $100Ks or even 6 figures annually pretty quickly.

There was once a billionaire in Brazil who blew it all.

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!

Eating from the hand of the same chef all my life? No, thanks.

Having known (tangentially) someone with a live-in chef, I can confirm that they do not supply literally all the meals.

Yeah. I sometimes feel like I'm being a bit extravagant but it's pretty small-scale in the scheme of things. No interest in multiple homes, yachts, jets, etc. Don't even eat out all that much except when I'm relatively modestly traveling.

For all his failings I can't recall Musk ever claiming he lives paycheck to paycheck.

There is a guy on YouTube that runs a channel called "I will teach you to be rich". Part of his content is like a call-in radio show, where people share their trainwreck expenses. It is unbelievable how people spend their money. And these are people frequently earning over 200K USD per year. If you watch more than a few episodes they all sound the same, and it is very hard to have any sympathy for their wasteful spending habits. When confronted by the host about various line items in their shared budget, the guests (invariably!) have unlimited excuses why this or that cannot be cut. Most people that I know that are earning more than 50% above median income are incredibly wasteful spenders. Most of them are in for a huge shock in their 50s when thinking about retirement.

Almost all of us are wasteful spenders in our own ways. The point of that guys show is to teach people to only spend money in ways that really matter to them. But, my matters might (likely) be your wasteful.

We definitely live in a time when one can create their own inflation. Khaki's in the USA can range from sub $50 to $900+. One can decide what is the correct price for our pants.

It's called lifestyle creep. Housing and transportation are the two most impactful items, which can scale from $20k/yr to $20m/yr smoothly.

I think lifestyle creep is too general of a description.

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

Not that I really go to Vegas much any longer (thank the stars!) but when I did for conferences regularly, I'd go into some of the shopping malls and would be (not really literally but close) "I couldn't afford a single thing in this store!"

Because when you look at the people in those surveys who “live paycheck to paycheck,” there’s an awful lot of them who say “after we pay for the mortgage and the car loans and groceries and max out our 401ks and contribute to the vacation fund, there’s nothing left.”

It definitely does not mean lotto tickets and restaurants. People living paycheck to paycheck do not go to restaurants. If you are going to restaurants it means you have funds AFTER bare expenses. Paycheck to paycheck means just enough to survive.

Paycheck to paycheck means just that - your income is balancing exactly your expenses. This doesn't mean that you are not living in modest luxury. Having enough money to cover essentials is just definition of - at the edge of poverty. Paycheck to paycheck is about (anti) fragility. They overlap strongly in the bottom part of the income ladder and diverge as you go up. You may be financially vulnerable even if pulling a lot of income. This doesn't mean that you can't get easier out of a hole if you fall with higher income, but paycheck to paycheck evaluate the chance of falling into it.

if this is what you think, I highly recommend you watch some episodes of Financial Audit on YouTube. Lots of people out there living paycheck to paycheck because they spend all their money on DoorDash and interest on bad debt, even with good income.

I bet paycheck to paycheck like most things has a range of meanings circling around the same essential thing, which is that if you do not get paid next month you cannot afford to live the same next month as you did this one.

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.

Mandatory spending isn't stable either. In my 20s I had low income, but at the end of the month I'd have a bit of money left over. Then the next month my car I needed to get to work would break down or I'd need to get a new shirt to look nice enough for the dress code rules or something. So over time I went slowly into debt.

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.

I think this nails the problem with using that phrase as a rallying cry. There is a difference between people whose problem is that their income is too low to be secure and people who could easily live a secure and comfortable lifestyle if they just managed their budget better.

>people who could easily live a secure and comfortable lifestyle if they just managed their budget better.

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.

The problem with that is there are also a large number of people who make a large amount of money and still save very little. So we should maybe put more work into figuring out what is the fault of economic structure, and what is the fault of poor decision making. Perhaps define some metric that’s a measure of what percentage of people would be unlikely to be able to do anything other than live paycheck to paycheck to paycheck in their current setup and where they live.

If losing your job means you won't be able to make rent this month, i'd consider that paycheque to paycheque. Like that is literally what the phrase is saying.

Whether that is because you simply dont have much money, or you spent it all on something frivilous is immaterial.

Yes, absolutely. I took a job where the company (a major one) effed up HR in some way where I and another person, who got hired at the same time, didn't get paid for around six weeks. He got evicted from his apartment. I had the means to keep mine. His life was ruined. Mine kept on. I believe his situation is / was far more common than mine.

My first job in NYC paid very little. I did something to my foot that required surgery and about 6 weeks on crutches. I ended up spending most of my paycheck at that time to getting car service from Brooklyn to Manhattan for work. During that time I was just spending whatever was needed to maintain the status quo. Only years later did I realize the privilege I was experiencing. During that time I remember colleagues remarking in disbelief that I was taking car service to work. My thinking was the only alternative was the subway and no way thought I was experiencing privilege. I was just trying to keep my job.

You were being taxied to and from work for what seems like a big distance ? Yeah, for sure most people can't afford that :-)

That was my point. One is struggling with life and it may not have to do with money/resources. The struggle removes the sense of privilege from the fore front of one’s thoughts. I was spending $40 a day while earning $70 a day. Later on I realized that for some people that would have ended their NYC experience.

$40/day on mass transit is not unusual either. If I commuted into the nearest major city (and, yes, it would involve a short drive and cheap parking( that's about what I would be.

True but this was 1992. I beleive subways were $1.25.

Certainly costs have gone up. But, throw in commuter rail as opposed to just subway (and maybe some parking) and round-trip costs can easily be more than just a few dollars.

I have no idea how much those things cost because I was taking the subway for $2.50 cents a day. I'm sure people could pay more to get to work but my pay scale didn't provide me many options.

I'm happy to say I wasn't privileged but fortunate if that satisfies you.

So you were netting $30/day? Assuming you worked 21 days/month, that's $630/month before other expenses like food and rent. How on Earth did you survive at that rate, even with early 1990s NYC prices?

My uncle was a kinetic sculptor in NYC and he bought a condemned building in right next to the Williamsburg bridge in 1978 for $10k. I graduated college in 1991 and he still had a condemned building and had made 3 of the 4 floors into apartments. The 4th floor was original meaning a dirty, dusty, with no real facilities. The apartment was full of old broken furniture and building supplies.

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...

You were absolutely experiencing privilege. I know you recognize it now, but hearing this is scary. This is why folks often vote Republican - they have no idea what life is like for very hard working actual poor people who would need services after breaking an ankle.

Your comment really brought it home for me.

What can mask privilege was that I was raised by a single mother who had the privilege of trying to support 2 kids as a potter. We had good family support but it wasn’t glamourus.

> We had good family support but it wasn’t glamourus.

Now imagine that, but no family support and one of you has cancer.

It could always be worse.

> you barely have the ends meet for essentials

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.

I'm not an English native speaker but that doesn't sound correct to me. If you need next month's paycheck in order to survive that month, for whatever reason (even if you gambled last month's money away, much less saved up for retirement or spent it on your health), that's my understanding of living paycheck to paycheck: you miss one paycheck and you're bust. (I assume you can't take it back out of that 401k thing or it wouldn't be a pension fund but a bank account. Correct me if I'm wrong about the mechanics of a 401k)

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

The problem with “paycheck to paycheck” is that it evokes images of people struggling to make ends meet—to pay the rent, keep the lights on, and put food on the table. But a lot of people today are using it to mean someone who’s living beyond their means—spending $1100/month on a brand new pickup truck while sending their kids to private school and maxing out their 401k. That’s not a problem of an unfair economy; it’s simply poor discipline. And so when a half-assed marketing survey asks people if they’re living paycheck to paycheck, you end up with 60% of respondents saying, “Yes,” when in reality only maybe 20% are struggling because they’re in a truly difficult situation. The rest of them may just need to settle for a less expensive car and maybe turn down their 401k contribution for six months so they can pay off their credit cards.

Sounds all correct to me, just the second word in your comment: I'm not sure how this adds up to it being a "problem". It's what "paycheck to paycheck" literally sounds like, it's what the dictionary says it means, it's how people use it -- but apparently not everyone. If you want to refer to people who are financially struggling, not using a broad term but just saying what you mean sounds okay to me?

That's exactly what paycheck to paycheck is meant to convey in English.

Random technical details: You can take money out of a 401k in a couple of ways that aren't retirement. The best way is an authorized reason: Up to a fairly small amount towards a first home. If you become disabled. If you are a victim of certain crimes. If you have a small (< $1000) emergency you cannot cover[0]. You can also take out that money at any time, paying a penalty on top of the tax required.

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.

The US Fed came out with a stat a few years ago that 40% of Americans wouldn’t have cash to cover a $400 emergency: they’d have to sell something, borrow, or other.

That’s pretty much paycheck to paycheck if your savings are that low.

The question asked how somebody would pay for an unexpected $400 expense. If you answered “credit card” then you were considered to not have the cash to cover an emergency. I’d use a credit card…and pay it off when it’s due.

How are you all discussing this question from memory without linking to the source?

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...).

So this statistic means most people are not living paycheck to paycheck right? (Although I didn’t think that “paycheck to paycheck” meant you would be ruined by an unexpected $400 expense)

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.

I suspect multiple things are getting mixed together... I swear I remember reading what GP said much further back than two years ago.

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

The question actually asked is also published. It was:

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

Yep. In the US, I would of course pay for an unexpected car repair (or indeed most any expense) with a credit card. It doesn't mean it won't be paid off at the end of the month in essentially all cases. So one of those meaningless statistics.

YOU would, but a lot of people with credit cards don't even understand that it's a loan, or what compound interest is. They put the expense on the card and then pay the minimum payment, either until it's paid off with insane interest, or they keep racking up debt until they reach their limit and get a worse card, until they're trapped in a cycle of poverty

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

I find it hard to sympathize with people that have enough money to pay off their card bills but don’t actually do so because they can’t be bothered to read.

It is easy to make mistakes when you margins are razor thin. They might be stupid mistakes it still happens and you notice them more because your margins become even smaller. I have been there, being really poor was hard on me.

Not an excuse for using credit cards, just an explanation why you should sympathize.

In many places the fault is not shifted to the potentially vulnerable or undereducated consumer and instead overdraft charges are capped.

In the US everyone is basically forced to have a credit card and use it but many have little financial literacy, especially immigrants.

I'm not in the US myself so I'm curious, how or why is everyone in the US basically forced to have a credit card?

Because paper money is inconvenient as hell. Have you seen the size of those 25ct coins! And then you go to buy the cheapest bottle of water, and you need 20 of them to buy half a liter.

Oh I see. But I mean why not just a debit/bank card that allows you to pay with money you have but not with money you don't? You just meant card in general. Yes I agree cash is now very inconvenient.

Basically, you're less protected against purchases gone wrong with a debit card or against fraud. A fair number of (mostly higher income) folks also get other benefits from credit cards--though that may not be relevant here.

However, a debit card usually covers the floor of needing a card of some sort to pay for a lot of things.

This is hardly ‘basically forced to have a credit card’.

I suspect a lot of people in the US use credit card generally to mean card of some sort because credit cards are so common. You do mostly need a card of some sort (and a smartphone) for many purposes but it mostly doesn't need to be a literal credit card so long as you have enough money in the bank.

How do you get a credit score?

Pay your mortgage on time every month for a few decades?

How do you get good rates for a mortgage, without a credit score?

How do you even get a mortgage without a credit score?

They aren't, debit cards are the default. Credit cards are just readily available and people like having credit.

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.

That’s a weird stat. If I spend all my $10k/month so that I end up with $0, I’d be included in that stat, which is clearly insane.

As I recall, there was also some disagreement in discussions over what "having cash" meant. A lot of people have ready access to assets that aren't necessarily literally cash.

We have no savings right now (I am not working) and could afford a $400 emergency, but we live paycheck to paycheck. Income is good, the extra just gets spent on various things due to having multiple disabled people in the house. Eventually we hope to rebuild the savings.

OP got divorced so they probably sold the house. Many people living on the edge could still end up pretty loaded if they sold everything and lived like OP.

It"s definitely not true https://www.noahpinion.blog/p/paycheck-to-paycheck-and-five-...

I’ve always understood paycheck to paycheck to describe households that don’t have a buffer. Meaning, if the paychecks suddenly stop, or a sudden large expense, there’s nothing to bridge the gap other than social programs.

By this definition, I would imagine a very large number of US households fit the mould.

Recent Noahpinion on this…

https://www.noahpinion.blog/p/paycheck-to-paycheck-and-five-...

50% of Americans don’t have an emergency fund. That’s paycheck to paycheck.

No idea how credible the underlying BoA study is, but from [1]:

>>> 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...