When someone lives paycheck to paycheck, they may feel relatively stable in a financial sense. They can pay their bills and make ends meet. But they must receive that next paycheck to do so. A disruption to their earnings, such as job loss, could mean that they are suddenly in over their head.
According to some statistics, this is true for roughly 34% of people in America. Even if they can afford all of their necessities today, losing their job would mean that suddenly it isn’t true. They may not even be able to make the next mortgage payment or the next car payment. Their debt level is only sustainable as long as they are earning a consistent income and getting paid every two weeks.
Unhappy with their savings
Some argue that the percentage of Americans living paycheck to paycheck is actually higher than 34%. But what some studies have found is that roughly 59% of people in America would claim they are “uncomfortable with their emergency savings.”
While this doesn’t necessarily mean that they’re living paycheck to paycheck, it could mean that they are relatively close. Maybe someone has a few thousand dollars in savings. If they got fired today, they know they could continue paying their bills for the next month, but they would only have that long to find another job. They still feel some level of financial instability because they’re right on the edge of not being able to pay their bills.
Reports like this show how quickly people can find themselves facing overwhelming debt, even if they previously believed their financial situation was secure. This is when it can be helpful to look into all potential legal options, including bankruptcy.