Define “Living Paycheck to Paycheck”
The phrase “living paycheck to paycheck” gets thrown around a lot, but the truth is, I don’t really understand what it means.
Here are some possible definitions:
- Not having enough money in savings to survive for a reasonable amount of time without a paycheck (i.e., not having a three-month emergency fund)
- Spending your entire paycheck (or more) and not saving any money (i.e., not making any financial progress)
- Commiting so much of your paycheck toward debt-repayment and/or savings that you are dependent on your next paycheck to pay upcoming bills (i.e., me)
I’m inclined toward the first definition, but I’m not sure. What do you think?
(This post was included in the Carnival of Personal Finance, hosted by Lazy Man and Money.)
19 responses so far
Prior to getting on a budget & debt-repayment plan a la Dave Ramsey-style, I would say we were in the position of a combination of #1 & #2. Looking back, we were always “one paycheck from total disaster”. I don’t know if i would consider #3 as “paycheck to paycheck”, because to me, the phrase implies living without a plan or goals.
#2 is what I think of. A person in situation #1 might have a few hundred dollars sitting in their checking or savings account, at least. What worries me is when people really have NO money until their next paycheck comes in. One of my coworkers has a dog who got sick a few weeks ago. She rushed him to the vet and waited to hear whether he would need an operation. Had he needed an operation (which she said would have cost about $800), her plan was to *sell her car*. The idea that she’s 31 years old and apparently has absolutely no emergency fund makes me really scared for her!
As for #3, I guess I fall into that category since I keep my checking account pretty empty…although since I could easily get money from my savings without penalty I’m not 100% dependent on the next paycheck.
# 2 To me, living paycheck to paycheck means spending the last penny of the previous pay period’s check and having literally NOTHING until you get paid again. There’s no fallback, no emergency savings, nothing except the next paycheck. And, God forbid, you DON’T work on salary and have a situation where you punch in and your hours/pay is calculated down to the last minute.
Whoo-hoo! I guess I’m not living paycheck to paycheck then!
I consider myself to be living paycheck to paycheck (as you can see from my blog title). I have very little money saved, so each bi-weekly paycheck is used up soon after it arrives in my account. The first paycheck is used for utilities and credit card bills and the second is used for rent / student loans / car loan (essentially…that’s about what it comes to). I have to rely on that money being in my account, so if a major expense comes up, I have to charge it. I know that I’ll be able to pay for it next month when my credit card bill is due, but I can’t pay it right now out of my bank account because that’s for current bills. So I think that it’s a combination of your first and second examples.
[...] Get Personal asks about the definition of living paycheck to paycheck. I vote for #2 as the best [...]
As someone who’s been functionally unemployed for many years now, and gets no paycheck whatsoever, I’m inclined to not really care how you define it.
You, however, are clearly someone who’s not helping me to make any money for the work I’ve done, by your using my photo without 1) crediting me by name (which is required), or 2) clearly indicating the licensing for the image (which is required), or 3) properly obtaining a model release (which is required, and which I know you haven’t, because I’m the model).
If this is a non-commercial endeavor, and you at least meet qualifications #1 and #2, I’ll waive #3.
If you make any revenue from your site, then I would require you first obtain my permission, and second, compensate me for the use of my image.
Thank you.
Maproom Systems: I will add a line saying you are the photographer (#1), but for most people’s Creative Commons photos, a link to your site is enough. If you read the Creative Commons license below, you’ll see that the best way to indicate the license is through a link to the work, which I did (#2). A model release is not required. I do not make money on this site, or I would not have used your photo, given that it is listed for non-commercial use.
If you do not like people using your photos on their blogs, I would suggest you not use Creative Commons licensing.
From Your “Some Rights Reserved” Link:
You are free:
to Share — to copy, distribute and transmit the work
Under the following conditions:
Attribution. You must attribute the work in the manner specified by the author or licensor (but not in any way that suggests that they endorse you or your use of the work).
Attribute this work:
What does “Attribute this work” mean? The page you came from contained embedded licensing metadata, including how the creator wishes to be attributed for re-use. You can use the HTML here to cite the work. Doing so will also include metadata on your page so that others can find the original work as well.
Noncommercial. You may not use this work for commercial purposes.
No Derivative Works. You may not alter, transform, or build upon this work.
For any reuse or distribution, you must make clear to others the license terms of this work. The best way to do this is with a link to this web page.
Any of the above conditions can be waived if you get permission from the copyright holder.
Nothing in this license impairs or restricts the author’s moral rights.
As I said, if your site is non-commercial, then you simply need to properly attribute me as well as clarify the license attached to the work, neither of which you did initially.
Legal matters notwithstanding, I find your use of the image in rather poor taste, and personally offensive. I’m quite aware of the problems involved with creative commons licensing, and a situation such as this is a perfect example of such, and one which i deal with quite often. I allow non-comm use of images because I’m a historian, and I believe in the free exchange of information for historical purposes; You are obviously not using this for any other reason than simple content-padding, but because the letter of the law is such as it is, I will admit that you are NOW within the realm of legality, although not, in my opinion, the realm of good taste.
Thank you.
Again, the photo was linked to your website initially, which is the preferred means to clarify the license and satisfies most photographers’ attribution requirements.
If this offends you, you obviously haven’t read some of my other posts.
Good luck with saving the world from destruction…
And nice photo.
I Think #’s 1 and 2 define living from pay check to paycheck. I have lived that way and sometimes I would even have to pull out a payday loan for emergencies when I didn’t have anything in my savings account. Living from paycheck to paycheck is not fun but sometimes one can’t help it and it causes so much worry because you never know if you will have enough to cover your next bill.
I agree with Jennifer about #1 and #2. I’ve been writing about pay day loans and car title loans on my blog recently(www.budgetblogger.com). When I worked in banking about 15 years ago, we approved loans which were basically the same thing. The interest rate on an unsecured loan was 18%, after fees the APR was closer to 25%. You’re right, sometimes stuff just happens, and when you’re living paycheck to paycheck there aren’t a lot of options.
Jennifer and Budget Blogger -
Based on the links (originally) included in your comments, you seem pretty positive toward payday loans.
I don’t think these are a good choice for people living paycheck to paycheck, and I would argue that a credit card is the better of two evils in these situations.
I think there are pros and cons to both. What happened with my credit card a few years ago made me hesitant to go that route. I took advantage of a zero percent interest rate on a new credit card. I made a mistake and charged a doctor copay on that card. The doctor reversed the charge immediately, but the credit card company charged me interest on the $20 payment until I paid off the balance transfer. I paid the balance off in two months, but the $20 charge ended up costing me close to $75. Payments were applied to the portion of my balance with the lowest interest rate, so if I hadn’t been able to pay the entire balance, it could have been much more expensive.
I live paycheck to paycheck. Often less than that, I literally had only $3.00 left in my checking five days before the next payday. Paycheck to paycheck literally. No credit cards b/c my credit is so awful no credit card company will touch me. No emergency fund. I’m 33 years old and no matter what I do I can not get ahead. There is always something that comes up. I don’t have a lot of debt, just a car and a student loan. It’s the utility bills, grocery costs, kids needs, etc that cause me to not even be able to make ends meet. It’s a very sad and stressful way to live. Everything costs SO much!
I’m really sorry to hear about your situation Heather, paycheck to paycheck is really no way to live. Have you considered trying to get a better job that pays better, or if possible, increasing your income in your current proffession. It sounds to me like you really just have an income problem and you could get in control of your finances if you just made a little bit more and had a solid plan of attack.
I know that you can do it Heather, keep the faith.
Ryan
hello, it’s the photographer again.
you’re now running sidebar ads here, and the site is most certainly generating revenue, therefore you are most certainly violating the non-comm creative commons license that the photo was covered by when you first “borrowed it.”
please remove it, or i’ll file a dmca takedown request with your hosting provider.
thank you in advance.
“and the site is most certainly generating revenue”
Yes, an astounding $10 so far, which does not quite reach the minimum payout threshold of $100.
So, you are correct, I think I owe you about .0532 cents currently and will happily remove your picture from the site. But as a personal finance blogger, I should advise you that actually getting a job or selling some of your art will get you further than harassing bloggers who use your images “legally, but in poor taste.”
thank you for removing the image.