nearly 24% of all households are classified as living paycheck to paycheck this year…That share is slightly higher than last year…
nearly 24% of all households are classified as living paycheck to paycheck this year…That share is slightly higher than last year…
No.
Here is the key difference. You are not spending your additional funds because of choices you’ve made to save. Folks living paycheck to paycheck don’t have additional funds to save. All of the paycheck is spent inside of that pay period. At any time you could have chosen to spend your saved money, but you chose not to. What you’re doing what most would call “budgeting” and your choice to not spend your savings are “sticking to your budget”. If you had a dire emergency such as being injured or ill for long enough to miss a paycheck would you have tapped your savings to stay afloat and pay your expenses even though it would have broken your budget? I think most would say “yes”. I know I would. This is the difference. Those living paycheck to paycheck aren’t able to put aside money to create an ever growing savings, as you did.
I very much commend you on your savings and budgeting! You’re on great financial footing with your circumstances and your choices. Nicely done!
During the time I was getting paid around $25k a year I was bringing home around $700 a paycheck (every 2 weeks). Me putting aside 10% between my 401k and my savings meant that I had around $30 every 2 weeks going into savings. I often ran out of available money several days before my next check, and having an additional $30 would have been nice, but would have likely only given me another few days.
And yes, when I had unexpected bills, and later when I lost my job, I did dip into my savings because that’s why I had it, but that 10% want going to be the difference between me living paycheck to paycheck, or not. In fact, the transition to not living that way was a very gradual process.
I’m not sure I understand your logic. If you dipped into your savings, then you clearly thought it was needed in those extreme times and it made a material difference. If it wouldn’t have made a difference, then why did you even dip into your savings?
I didn’t say that the savings didn’t make a difference, I said that having an additional small amount of money available to be each part period wouldn’t have kept me from living paycheck to paycheck. Of course having the savings made a difference when something major happened, that was the whole point.
And that is the monumental difference between what you are describing I would just call “sticking to a budget” vs living paycheck to paycheck. Those living paycheck to paycheck don’t have that option to pull from savings because they have no savings. You did. What you were doing, by any definition I’ve run across up until yours, wasn’t living paycheck to paycheck.
If you want to keep saying you’re living paycheck to paycheck, certainly you can. Its a free country, but you’re going to confuse people you talk to or misrepresent to them your situation. It may also be doing a disservice to those that are living paycheck to paycheck.