Living Paycheck to Paycheck

I just read a post from an expert financial blogger, G.E. Miller of 20somethingfinance. He discusses the recent results from a nationwide based study where the FINRA Investor Education Foundation states that only 41 % of americans who responded to this report are spending less than they earn! (seriously?). Just over a third (36%) spend their income, and 19% are spending more than their income!

This means, as Miller points out in his post,  that 55% of americans are essentially living paycheck-to-paycheck! Wow, I’m not sure that I expected the number to be that high, where basically every other person you meet is not saving anything.

He also pointed out that the population has misconceptions of its own financial well being, with only 31% not being satisfied with their finances. What happen to the other 24% of the paycheck to paycheck crowd?

Well, it is perhaps no surprise that I am not in favor of this lifestyle, which will never see financial independence and reliance of social welfare to get you through retirement (good luck with that). It’s also pretty risky situation, where you can easily get trapped into high interest debt should a bump along the road occur. This would likely result in spending all your spare cash on paying credit card interest, rather than ‘paying yourself’ first.

The real concern is that as a population, we seem to be putting the cart before the horse, instead of going for financial freedom and all the many benefits, such as working on things you really want to, and dealing with much less financial stress.