Paycheck-To-Paycheck

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DEFINITION of 'Paycheck-To-Paycheck'

An expression used to describe an individual who would be unable to meet financial obligations if unemployed because his or her salary is predominantly devoted to expenses. Persons subsisting paycheck-to-paycheck have limited or no savings, and are at greater financial risk if suddenly unemployed than individuals who have amassed a cushion of savings.

BREAKING DOWN 'Paycheck-To-Paycheck'

Persons living paycheck-to-paycheck are often referred to as the working poor. These individuals typically have limited skills and are paid low wages, and are more likely to work multiple jobs. Individuals with high paying jobs may also be in a similar situation if outgoing expenses equal (or even exceed) incoming salary.

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