What does the phrase 'living paycheck to paycheck' mean?

The phrase 'living paycheck to paycheck' refers to a financial situation where an individual relies entirely on their next paycheck to afford their monthly expenses without any leftover funds for savings. This means that as soon as individuals receive their earnings, they need to immediately allocate that money to cover necessary costs such as rent, utilities, groceries, and other bills.

In this scenario, there is typically little to no savings available for emergencies or unexpected expenses. Consequently, if an unexpected expense arises, such as car repairs or a medical bill, a person living paycheck to paycheck may struggle to manage that financial burden without incurring debt. This term highlights the precarious nature of financial stability for many individuals who do not have a financial cushion or savings to draw from, making it a common concern in discussions about personal finance and budgeting.

It contrasts with the other options, which suggest strategies for financial health, such as saving, investing, or having an emergency fund, all of which indicate a level of financial security and planning that is absent in a paycheck-to-paycheck lifestyle.