I don’t accept that 78% of Americans live paycheck to paycheck

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AUTHOR: R Quinn on 6/19/2024

If 78% of Americans were truly living paycheck to paycheck – implying no money except for basic necessities, the economy would be at a standstill. No purchases at retail store sales, no entertainment venues, no travel – unless, of course it’s all on credit. Only utilities, food markets and insurance companies would be in business- maybe a McDonalds of Chick-fil-A or two.

The reported percentages are based on surveys. People don’t always give honest answers in surveys. Surveys themselves report that most people (around 80%) say they answer truthfully. However, that number might be a little inflated, since people might not want to admit to lying!

Even if the survey answers are truthful, defining paycheck to paycheck may be viewed differently. My bank account is virtually the same at the end of the month as at the start. In other words, I spend all of my net pension. However, I save a little, fund 529 plans, give to charity, go out to eat, etc. Is that paycheck to paycheck living? No way, but I could honestly answer yes to the question. 

There are two parts to the equation, income and spending. Hearing someone is living paycheck to paycheck may be perceived as low income, but that is not always the case. Most income levels can spend all their income if they choose, as unwise as that may be. 

Yes, there are some Americans living paycheck to paycheck with no choice doing so, but 78%? Nope! My guess is is that no more than 40% can claim that financial unpleasantness.

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