People Who Are Stuck Living Paycheck To Paycheck Usually Have These 11 Reasons
Getting stuck in the cycle of living paycheck to paycheck seems to be the way the world works for more and more people.
Mahir KART / Shutterstock Just a few months back, Investopedia contributor Jessica Gibson reported that PNC Bank’s Financial Wellness in the Workplace Report found that 67% of Americans are stuck in the cycle of living paycheck to paycheck. That’s an awful lot of people who barely make enough to pay for the essentials and make it through to their next paycheck. It’s unfortunate that this is the reality for so many people, but it’s one that’s very relatable. If you aren’t living paycheck to paycheck yourself, you almost surely know someone who is, and those who are stuck in that cycle usually have some understandable reasons.
That means one unexpected thing happening could throw them for a loop. An emergency room visit or a wrecked car would completely throw their economic ecosystem out of balance. Of course, this puts people in an awful position, but there’s often not much they can do to change things. Raises or better-paying jobs don’t just magically appear, and the challenging situation can leave someone feeling trapped.
People who are stuck living paycheck to paycheck usually have these 11 reasons
1. Not earning enough
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One of the most obvious reasons someone might be living paycheck to paycheck is that they’re simply not earning enough money. This doesn’t mean they’re trying to live a luxurious lifestyle that they can’t afford. Rather, it means their income isn’t enough to cover the basics. Their paycheck is meager, and it barely covers the things they need.
CBS News contributor Megan Cerullo shared that the Ludwig Institute for Shared Economic Prosperity concluded that “minimal quality of life” was unreachable for the bottom 60% of U.S. households based on earnings. The Institute’s chairman, Gene Ludwig, noted, “Americans are working harder than ever, fueling our economic growth, but the benefits of that hard work are not being distributed in a way that supports upward mobility for too many middle- and low-income Americans.”
If you can’t afford a “minimal quality of life,” what can you really afford? While the Institute did not define what this means exactly, it sounds like 60% of American households can’t afford the necessities from week to week and month to month. They quite literally have no quality of life and are doing what they can just to survive. And, as we all know, surviving does not equal thriving.
2. The cost of living
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Another reason people are living paycheck to paycheck is the insanely high cost of living. It just costs too much to get by right now, and the average person doesn’t have a paycheck that covers that cost. This can be even worse depending on where you live. Some states have astronomically high costs of living, while others are on the lower end of the spectrum, and those really don’t have a reasonable cost of living either.
According to World Population Review, most American households pay approximately $61,334 worth of expenses annually. That’s more money than some people make in a year. The most expensive state to live in is Hawaii, which earned a score of 185.0 on its Cost of Living Index, meaning the cost of living is 85% higher than the rest of the country. Oklahoma had the lowest rate at 86.0, which is 14% lower than the national average.
Overall, 22 states are above the national average on the Index. That’s almost half of the country. All the people who live in those states are grappling with a higher-than-average cost of living, and the average is already super high. It’s not a good situation, and for people dealing with the increasing costs of living, it feels like a vicious cycle that they can’t escape.
3. Living beyond their means
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One reason people live paycheck to paycheck is that they may actually have some control over is living beyond their means. Living beyond your means simply means spending more than you earn, according to Investopedia. Some people struggle to live a lifestyle that matches their income, and they end up spending money they really don’t have, which can lead to debt.
Investopedia offered some signs that someone may be living beyond their means. One has a credit score that is below 600. High credit card balances, saving less than 5% of their income, over 28% of their income going towards housing costs, and trouble paying bills are all other indications that someone is in too deep.
If someone finds that they are living beyond their means, there are things they can do to get on a better financial path. It may be necessary to work with a professional, such as a financial planner, to get expenses under control. Also, simply working to cut back on spending would go a long way. No one has to remain stuck living beyond their means.
4. Debt
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Honestly, who doesn’t have debt these days? Between student loan debt, medical debt, and credit card debt, it seems like everyone is beholden to some kind of money they have to pay back to some entity or another. Of course, the reason people go into debt in the first place is because they don’t have enough money to pay for something outright, but then it becomes a cyclical issue as that debt then prevents them from growing financially.
CNBC Select contributor Megan DeMatteo said, “In our efforts to keep up with the Joneses (or just get by during this period of economic uncertainty), debt has become a normalized part of the American lifestyle.” She noted that, among all kinds of loans you can have, including mortgages, student loans, personal loans, and credit cards, the average American is in $90,460 of debt. That’s well beyond what many people make in a year.
The institutions that you’re in debt to demand you pay that money back, which often involves a payment plan with a set amount of money contributed each month. Most people negotiate those plans down as low as possible to avoid one more overpriced bill every month, but when you’re chipping away at over $90,000 in small chunks, it can feel insurmountable. People live paycheck to paycheck because they are paying off debt, and then they go into further debt to buy the things they need while doing so.
5. Having children
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This is not meant to discourage people from having children at all. However, it is a fact that children cost money. The bigger your family, the more money you’re spending on them. It’s just logistics. If you have more children, you need more food, more clothes, a bigger house, and so much more. Many people fall into the cycle of living paycheck to paycheck because of the size of their families. While they adore their kids, there’s no question that they’re costing them.
Lending Tree conducted a study to determine how much money parents spend on a small child in the U.S. each year. Maggie Davis reported that their findings were that a single small child would cost $29,419 annually. If you had several kids, that could wipe out your entire annual income. Then, what’s left over for all essential costs unrelated to children?
It’s not fair that people have to seriously weigh the pros and cons of having children against those of living paycheck to paycheck. We should live in a world where having kids, should you choose to do so, is affordable and easy. It shouldn’t place such a heavy burden on parents. Unfortunately, many people must choose between financial stability and their desire to start a family.
6. Job loss
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Another thing that factors into living paycheck to paycheck is job loss and instability. This may sound strange because if you lose your job, you’re not actually getting a paycheck. But think about it. If you live in a two-income household, losing one of those incomes is going to affect your financial situation seriously. Similarly, if someone can’t find a stable job and has to hop around from one job to another, their paycheck is going to be constantly fluctuating, which would also affect their finances.
In August, the Bureau of Labor Statistics reported that unemployment in the U.S. sat at 4.3%, or 7.4 million people. Additionally, the American Psychological Association’s 2025 Work in America survey found that 54% of American workers were stressed about job insecurity, and 39% were worried they might lose their job soon because of new government policies.
While the unemployment rate isn’t as high as it’s been in the past, over 7 million people being out of work is still a huge problem. And, clearly, job instability and insecurity are weighing heavily on most people’s minds. All dual-income families are just one executive’s decision away from living off one paycheck. The volatility of the current job market is definitely contributing to people living paycheck to paycheck.
7. Not having an emergency fund
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If someone doesn’t have an emergency fund, that could definitely play a role in their living paycheck to paycheck. If all you have is the income you get from each paycheck, then there’s a higher chance that all you have coming in will need to go to the basic things you need. And, if you’re living paycheck to paycheck, you don’t really have a way to break free from that and start an emergency fund. This means one unexpected expense could completely throw you off.
According to Discover, “These savings are meant to be used for real, urgent needs — like to pay rent when your income dries up or to foot an unplanned medical bill … An emergency fund is not a personal slush fund for when your skis break or you’re eyeing a new dress for your best friend’s wedding.”
Author and personal finance blogger Christine Luken described her own experience with not having an emergency fund. “Before I had an emergency fund, if I had an unexpected car repair or vet bill, I had two problems. The original emergency and a money problem,” she said.
It’s important to do anything you can to develop some kind of emergency fund so you have something to fall back on. Without this, people will be stuck living paycheck to paycheck, just hoping for the best. They have no extra money to put towards emergencies, so it just comes from their paycheck.
8. Living on a fixed income
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Some people live on a fixed income, meaning they receive a certain predetermined amount of money each month. This is typical for senior citizens who have retired and are living off of Social Security benefits. This can also apply to people who receive disability benefits. These people are still getting a paycheck, but it’s usually very low because it’s not coming from an actual job.
Investing and wealth management writer James Royal, PhD, said people who are retired typically receive around $2,000 from Social Security each month. People who are on disability receive about $500 less on average. That’s not a lot of money at all. This is why financial experts are so serious about saving for retirement — you’re not going to be bringing a lot of money in.
It’s unfortunate that society’s most vulnerable, like seniors and the disabled, are apparently valued so little. But these people live paycheck to paycheck, barely hanging on and affording the things they need. If you live on a fixed income, that’s a big reason you might be living paycheck to paycheck.
9. Not budgeting
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Another reason some people are stuck living paycheck to paycheck is a lack of budgeting. If someone doesn’t have a plan for how they’re going to spend their money, it makes sense that they would often run out. By creating a budget, people can see how much money they have coming in and what they’re specifically going to spend it on.
According to the Federal Trade Commission, “A budget helps you make sure you’ll have enough money every month. Without a budget, you might run out of money before your next paycheck. A budget can also help you save for your goals or emergencies.”
Having greater control over their money will really help some people stop the paycheck-to-paycheck cycle. Of course, some people just truly are not earning enough money, and no amount of budgeting will change that. But if someone feels like they don’t have a good handle on where their money from each paycheck is going, budgeting could be really helpful.
10. Helping family
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Sometimes people struggle with living paycheck to paycheck because they aren’t just paying their own bills. They’re also helping out family members. Whether it’s an adult child moving back in with their parents, or the reverse — an adult child trying to help out their parents with financial woes — some people have family obligations that make it harder for them to save any extra money. Instead, they’re left living paycheck to paycheck.
CNBC’s Charlotte Morabito said that approximately one-third of adult children between the ages of 18 and 34 are still living with one or both of their parents. Joanne Hsu, a research associate at the University of Michigan, said, “What we found was that part of the reason we see this escalation of young adults not leaving the nest or returning to the nest is this idea that it was harder and harder for them to weather shocks.”
Meanwhile, writing for the Census Bureau, Liza C. Valle reported that 4.3 million American adults supported their parents financially in 2020. So many people are struggling right now, and their families feel an obligation to help them. This, in turn, puts them at a disadvantage as it means they are living paycheck to paycheck themselves, but they refuse to leave their family behind.
11. Medical problems
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One final reason why people find themselves living paycheck to paycheck is that they’re dealing with medical problems. We’ve already established that anyone receiving disability benefits is just getting crumbs each month. Medical debt also holds back many people struggling with their health and finances at the same time. Having health problems makes it difficult to work and hold down a job, which causes difficulties for many people.
Writing for AARP, Kenneth Terrell covered a study from the Harvard T.H. Chan School of Public Health and the de Beaumont Foundation. It found that 76% of those with a chronic illness had to take some time on the job to manage their health. 65% have needed a break, and 61% have had to take time off from work. Additionally, 14% ran out of PTO because of their health.
It can be difficult to work while you’re dealing with health issues at the same time. Taking time off frequently can lead to fluctuating paychecks or even compromise job security. Managers need employees they can count on, and, unfortunately, they don’t always see workers managing their health as the most reliable. This is incredibly unfair, but it’s the reality of the situation. For these reasons, someone with medical problems could likely be living paycheck to paycheck.
Mary-Faith Martinez is a writer with a bachelor’s degree in English and Journalism who covers news, psychology, lifestyle, and human interest topics.
