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.)
Photo Credit: self portrait as a custom framing consultant by Maproom Systems, used under Creative Commons licensing
