Why Do So Many People Live Paycheck-To-Paycheck?

The first time I heard the statistic that 78 percent of full-time workers in the United States live paycheck-to-paycheck, I had a hard time believing it. Not only is that true, but also 25 percent of workers regularly can’t even make ends meet.

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Unfortunately, despite the fact that the average American will earn a little more than $2 million throughout their working life most people experience Money Stress every day. So the obvious question is, “Why are so many people living paycheck-to-paycheck?”

The Four Money Principles

The answer is simple. Most people don’t know or use the Four Money Principles. But these principles are what the Financially Free understand and practice every single day. The Four Money Principles are a simple way to approach building your Financial Fitness, achieving Financial Freedom and escaping the paycheck-to-paycheck cycle.

When you Pay Yourself First, Live On What Remains, Protect Yourself, and Make Your Money Work For You, you build an impenetrable financial wall around you and your family. So why do so many continue to live with Money Stress and fear? Why are so many getting it wrong? Why do so few know how to manage their money?

The Traditional Wisdom

The answer is almost always lack of information. Traditional wisdom tells us if we study hard in school, get good grades and get a good job, our financial future will be secure. But as nice as that sounds, it’s simply not true. Without knowing how to handle, invest and grow your money, you’ll never be free to make your own choices about your life. You’ll continue to earn to spend rather than building wealth.

The Financially Free Build Wealth

So what are the Financially Free doing right? The answer to that question is they’re playing an entirely different game. They send their money out to work for them rather than working for their money. They rely on Cash Flow rather than net worth.

The financially insecure who live paycheck-to-paycheck hope their money will magically manage itself and somehow last through their retirement. Unfortunately, that isn’t the outcome for most people. The reality is 75% run out of retirement savings within the first five years.

The information you need to change your life is available. You just have to take the first step.

Erin is the managing editor of MindShift.money and the owner of Lane Change Media. As a business owner and content provider, she takes her personal motto, “Don’t slow down, just change lanes” seriously.  She lives in Los Angeles and has far too many pets.

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