Ask the Readers: Living Paycheque to Paycheque?

I read a disturbing article in the Globe and Mail recently about how 59% of employed Canadians are living paycheque to paycheque.  What does that actually mean?  Simply that 6 out of 10 Canadians would be in financial trouble if their pay cheque was delayed by a week.  Yes… a week.

Here is an excerpt from the article:

Fifty-nine per cent of Canadian workers say they would be in financial trouble if their paycheque was delayed by just a week – the same proportion as last year when the economy was still mired in a downturn, according to a poll of 2,766 people by the Canadian Payroll Association.

Almost half, or 47 per cent, are saving 5 per cent or less of their net pay. Sixty per cent of workers have been trying to save more than a year ago, though over half of them have been unsuccessful in doing so. Forty per cent say they’re not even trying to save.

I can see new grads living paycheque to paycheque as pay is generally lower, student debt can be high, and starting out on your own is expensive.  However, as pay increases and bills stabilize, savings and investments ideally should start to grow.  At the minimum, a fall back plan should be initiated (ie. an emergency fund or emergency line of credit).  Unfortunately, the truth for most is that more money earned simply results in greater expenses.

I’ll be the first to admit that we lived paycheque to paycheque when we first started our financial journey after graduation a little over 7 years ago.  But we dug ourselves out of what seemed like a never ending cycle by keeping our expenses as low as possible and saving any extra income (ways to save money).  Today, although our family income is higher as we are well into our careers while running a side business, we still aim to keep our expenses under control while investing our excess cash flow.

What do you think of the statistic?  Does it surprise you that 60% of employees live paycheque to paycheque?

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FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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13 years ago

I am in my early thirties and I have learned to save money the hard way. By that I mean screwing up earlier in my twenties. Spending to keep up with friends and family. Clothes, going out to eat and spending money on going out on the town. I learned from my mistakes, paid off my debt and am currently saving an emergency fund and a down payment on a house. Is it hard? Yes. Can I live the way I used to? No, I can not if I want to feel secure in my future. I see too many people (many the same people from my 20’s) who even though I did not realize it at the time, are living paycheque to paycheque. Sure they have more things than I do, yes they wear all brand name clothes, as do their babies or children. I know people who have had illness in their family or have lost their jobs. Sometimes bad things happen, and yes it takes a while to get back on your feet. But, when you have friends who are complaining about not having any money and finding things hard as they than show you their new $400 purses and their babies new $50 t-shirts than you can’t really be all that sympathic for them. We all screw up in life at times, things happen that we can’t control, but keeping up with the neighbours is not something that can be sustained in the long term without getting yourself in trouble.

13 years ago

P.S. I am new to your site, previously on moneysense discussion forum, great job and some very interesting reading, good luck on your journey and maybe we can exchange some ideas.


13 years ago

If these 60% of people know they are living pay to pay, why not learn and do something about it?

If I know I am doing something fundamentally wrong and would like to correct it ……. I would make every effort to do so and stop making excuses. (except for those forced into the situtation)

I have many friends that are financially well off, but are tight on cash flow due to too big a house, too fancy a car, or too busy showing off.
The Jones’ can take a hike!
I am way too lazy and too interested in having more free time to care about them and their houses, cars and clothes.
I am in the ultra-early retirement group(or semi-retirement group) and the way I did is the old fashion way of paying ourselves first and living way below our means.

I never thought about….. should I pay my RRSP first or…. pay down my mortgage? It was always pay into both them and make a concession somewhere else. Like my 20 year old sports car with two babyseats and a double stroller in the back. Or my 14 year old fishing boat. Who cares what everyone else thinks or says. A bunch of my friends have mini vans with power sliding doors or SUV’s with enough space for a 4X8 sheet of drywall, and all the other toys,cel phones, HDTV, on demand, etc.
Now there asking me how we can retire so early? It’s because we didn’t give into every want that entered our eyes.

P.S. I am new to your site, previously on moneysense discussion forum, great job and some very interesting reading, good luck on your journey and maybe we can exchange some ideas.


Lina Zussino
13 years ago

Sadly, it does not surprise me that nearly 60% of Canadians live pay cheque to pay cheque. My brother in law is a math teacher and he teaches financial education to high school students. I’ve seen some of his strategies and I often wish I was taught that in school. Perhaps I too, would have a few extra dollars in the bank! Financial education is desperately needed. It’s not that people are ignorant to it, it’s simply that they are not educated with finances and the media encourages spending – it would be nice to see some of those old school teachings brought back to our young children. Canadian statistics shows that there about 68 million bank credit cards in circulation more then three cards for every adult and this doesn’t include department store and other retail charge cards!

13 years ago

This quote from the article makes it pretty clear to me:
Younger workers are having the greatest trouble meeting their current expenses, with two thirds of those aged 18-34 saying it would be very difficult, difficult or somewhat difficult for them to meet their current financial obligations if they missed even one paycheque.


13 years ago

Boy, pretty hard to pin down exactly what the pollsters meant by “financial trouble”, and what the respondents meant by “financial trouble”.

This poll got way more publicity than it deserved, and there is precious little that can be inferred with confidence from the results.

13 years ago

Although perhaps they could have worded it more clearly, the intent of the poll is obviously that living paycheque-to-paycheque means that you would be unable to pay your bills, not that you might be inconvenienced by having to make transfers from other accounts.

Yes there are people with legitmate hardships that are part of that 60% and it may not be quite so high due to poor phrasing of the question, however, I think it is still a troubling statistic. I respect that different people have different views on money management. People can spend their money however they want, hopefully with some conscious thought. However, I don’t respect people using the bank’s money (credit cards, LOCs, etc) for their wants and then feeling hard done by.

13 years ago

@FT I have a soon to be 2 year old and am currently driving an 05 Mazda 6.We bought it used and it is a great car however, after owning it for a while, and as my daughter grows, it becomes quite the strain on my back to get her in the car. Everyday I put her in the car (far more than once) and I curse the car wishing I had an brand new shiny SUV. About a month ago I joined two friends at the park so all the kids could play. And my little silver Mazda was wedged in between a 07 Ford Escape and I think an 07 Dodge Nitro. In that moment I was envious of my friends but when I really thought about it, both of those families struggle each pay and one of them is in the process of selling their house because they can’t afford it. For some it is easy to get wrapped up in “Keeping up with the Jones'” and being able to otherwise justify those decisions (my back hurts in my case). But really I am just fine and would rather have my Mazda, when it means overall security for my family and future goals.

13 years ago

I just quit my job the other day. I’m young have a wife and 2 kids.

enough money saved for a few months so i guess i’m not the average

Although not many people would quit a job and not have another one

On the other hand i can make more money by making less lets see how many people can figure that one out.

13 years ago

Although I respect your opinion, I do not agree. Why do you need to have one or the other? Why can’t you have both? What about having balance? You can live now AND put a bit away for savings.

I didn’t say you had to have one or the other. But what constitutes “balance” for one person, isn’t the same as for others. Everyone ranks the costs and benefits differently. There is no one right way to do it.

Look — I think we all agree that some people spend more than they earn, and that ultimately this probably isn’t the wisest way to live.

But when I start to see comment threads that turn into ridiculous moral judgements of people’s choices in how to spend their own money, it is a bit galling. It is all the more so, when it is triggered by media polls that are poorly designed and exaggerate the scale of the problem.