Last Updated on February 14, 2024 by Lifevif Team and JC Franco
A large portion of the global population lives paycheck to paycheck, and still, those who find themselves in other financial positions believe a number of misconceptions about paycheck-to-paycheck living. If you’re one of those people buying into the myths and misconceptions, this one’s for you…
When it comes to living paycheck to paycheck, there are many myths and misconceptions out there. Today, we are going to debunk some of these myths. Simply read on to find out.
10 common myths and misconceptions about living paycheck to paycheck, debunked:
1. There’s no way out of living paycheck to paycheck.
How permanent is living for the next paycheck? Are you doomed to live such a lifestyle forever, or is there a way out? Many people mistakenly believe that when you get into living paycheck to paycheck, there’s simply no way out, and you will have to live like that long term. The reality is that situations change over time. A significant percentage of people who live paycheck to paycheck do so for not many years. While a smaller number of people find themselves in such a situation for 5 years or longer.
2. Living paycheck to paycheck is a lifestyle choice of low earners only.
Who exactly is living paycheck to paycheck? Is it the poor, or is it the rich? The statistics show us that it’s not only low earners who end up living paycheck to paycheck. In fact, there’s a trend seen of high-income earners also living paycheck to paycheck. This is because people tend to often live beyond their means and take on higher expenses as their income earning potential increases. As it turns out, there is a significant percentage of high-income earners living paycheck to paycheck as well.
3. Paycheck to paycheck living is rare or uncommon.
Just how many people live from one payday to the next? You might be surprised that it is more than you think! In a survey done by Paychex, it was determined that about 60% of people admit to living paycheck to paycheck in America. Most people who live this type of lifestyle were exposed to it while growing up too. It has become quite common for people to rely on their next paycheck to get by.
4. Having a credit card is a bad idea.
Let’s talk about the sensitive issue of credit cards. Some love them, and some love to hate them, but what’s the deal with credit cards and people who live for the next payday?
Generally speaking, people who live paycheck to paycheck have mixed views about credit cards. Some people have a credit card to help them get through the month, until their next paycheck arrives. If handled correctly and your paycheck is used to pay off the outstanding balance, there is no need to view a credit card as a bad idea. Of course, you shouldn’t spend money on your credit card that you will not have to pay it back.
5. A credit card is used to bail you out when you can’t afford your regular living expenses.
Many people, who think about living from one payday to the next, believe that a credit card is their saving grace, and this is where people go wrong with credit cards. If you are living paycheck to paycheck, a credit card should not be used to bail you out of expenses that you will not be able to afford at the end of the month. The misconception that a credit card is a helpful bail-out tool is quite dangerous.
6. People with children are most likely to live paycheck to paycheck.
Let’s talk about how children often get the blame for couples having to live paycheck to paycheck. Is the blame fair? Are children really the cause? The statistics actually tell us a fairly interesting story.
In the same survey previously mentioned, done by Paychex, it was revealed that close to 60% of people with no children actually report living paycheck to paycheck. Of course, those with one or more children still reported that having kids was one of the main causes for living paycheck to paycheck as their earnings simply weren’t enough to put them in a healthy and gainful financial position – however, children are not cited as the main offending expense.
7. Living paycheck to paycheck is a result of overspending.
What is the underlying cause for living paycheck to paycheck? What most people think is often simply not true. Many people believe that those who are living paycheck to paycheck have found themselves in an uncomfortable financial position because of overspending.
The reality is that most Americans find themselves living paycheck to paycheck because of their housing expenses, simply not earning enough, utility expenses, and auto payments that they have to meet. In many instances, living for the next paycheck has nothing to do with overspending but merely the cost of living nowadays.
8. Only slashing expenses can solve living paycheck to paycheck.
Is there a way to solve the issue of living paycheck to paycheck? Many people believe that there’s only one way to solve the problem of living paycheck to paycheck, and that is to slash expenses. The truth of the matter is that some budgets simply cannot be slashed any further. We all have to pay rent, pay utilities, pay for transport, pay for schooling, and of course, pay for food. Some of these expenses are set and cannot be reduced.
There are several other ways of getting out of a paycheck to paycheck lifestyle. For instance, one could look for a higher paying job, get a second job, start a sideline business, pay off credit cards, increase savings, and even downsize the home or get each of-age family member to get a job to contribute to expenses. This means that there is more than just one way to solve the paycheck-to-paycheck lifestyle.
9. Living paycheck to paycheck is uncomfortable.
There’s a general misconception that people who live paycheck to paycheck actually live uncomfortably. To be honest, it can be an uncomfortable way to live, but some people handle their finances and lifestyle in such a way that it isn’t as bad as many people will assume. Living for the next paycheck can be handled effectively by having an efficient budget set in place and learning to stick to it. Once you are used to living according to your means, a paycheck-to-paycheck lifestyle can be somewhat comfortable.
10. When living paycheck to paycheck, there’s no room to save money.
It’s a complete myth that living paycheck to paycheck means that every last cent is spent on expenses and bills, and there’s nothing left over. People who budget may make provisions for savings that form part of their “expenses”. By setting savings as an expense on your budget, you will get used to set that money aside each month. Many people live for the next paycheck and can still manage to save quite effectively.
Last word
With the above 10 myths and misconceptions about living paycheck to paycheck busted, how do you feel about it? Take the time to consider each point and decide for yourself if living paycheck to paycheck is really that bad after all.
This article was co-authored by our team of in-house and freelance writers, and reviewed by our editors, who share their experiences and knowledge about the "Seven F's of Life".
JC Franco
JC Franco is a New York-based editor for Lifevif. He mainly focuses on content about faith, spirituality, personal growth, finance, and sports. He graduated from Mercyhurst University with a Bachelor’s degree in Business, majoring in Marketing. He is a certified tennis instructor who teaches in the New York City Metropolitan area. In terms of finance, he has passed the Level I exam of the CFA program.
