A decade after the start of the Great Recession, nearly half of all Americans are living paycheck to paycheck. When living paycheck to paycheck, a person or family is on the edge when it comes to being homeless.

There is some debate regarding how many paychecks certain segments of the U.S. population are away from being homeless. There are a number of factors that come into play when it comes to ascertaining how many paychecks away people are from ending up homeless.

Specific Statistics Regarding Earnings and Homelessness

As of 2017, 49 percent of Americans were living paycheck to paycheck. The number was a bit higher at the start of the Great Recession in 2008. 41 percent of men were living paycheck to paycheck. 56 percent of women are living paycheck to paycheck. The bottom line is that when a person lives paycheck to paycheck, housing is immediately at risk when that paycheck is no longer available for one reason or another.

In addition to losing a job, other factors can jeopardize housing when a person lives paycheck to paycheck. A prime example is a person in this position facing a medical issue or having a family member with a medical issue. Even if an individual with a medical issue is working, and the paycheck is coming in, the lack of any other financial resources places housing at risk.

Americans and Emergency Funds

The best way to protect against losing housing due to income issues is to have an emergency fund. An associated reality is that a majority of Americans do not have suitable emergency funds.

Some financial experts maintain that people should have an emergency fund that covers six months’ worth of expenses. A total of 61 percent of U.S. residents lack an emergency fund for six months. 52 percent of men and 69 percent of women lack this type of emergency fund.

Closely followed financial expert Suze Orman maintains that an emergency fund that covers six months’ worth of expenses is not enough. She explains that a six-month cushion is not enough if a person loses a job or a family has a medical issue. She takes the firm position that a person needs at least eight to 12 months worth of living expenses in reserve or in an emergency fund.

Gender Plays a Role

Financial experts assert that one of the reasons women more than men are at risk for being a couple of paychecks away from homelessness is because of the gender pay gap. Overall, in the United States, women on average are paid 80 percent of what men are paid for similar work.

In addition, in frankly discussing the difference between women and men in this regard, recognition is necessary that aspects of a women’s lives can prove to more expensive than their male counterparts. (This situation has been called the “pink tax.”)

Wealthier People and Homelessness

A persistent misperception is that only people at the lower end of the income scale face the prospect of losing their homes if they lose their jobs. In reality, some higher earners are also living paycheck to paycheck. 10 percent of individuals earning $100,000 or more a year indicate that they would immediately miss a mortgage or rental payment.

Of course, missing one payment doesn’t mean a person will immediately be on the street. However, if the individual is renting, he or she is likely to face fairly immediate repercussions for missing a payment. A person with a home mortgage loan may have a bit more flexibility, particularly if he or she has a track record of paying on time.

Bottom Line: Paychecks and Homelessness

In considering the various factors mentioned here, nearly half the U.S. population arguably is at risk of facing homelessness because they live paycheck to paycheck and lack a suitable emergency fund. In the final analysis, the surest way to protect against homelessness if a person loses a source of income is to have an emergency fund that permits between eight to 12 mortgage of rent payments.

Some people have taken the course of temporarily taking a second, part-time job to build up an emergency fund. Although this does stretch what is likely already a tough schedule, taking this route to build up an emergency fund reduces stress and worry over the long term. Knowing that a cushion exists through which housing (and other) payments will be made in the absence of a paycheck for a more extended period of time is an invaluable situation.

Photo Courtesy of Quince Media.


Emily Kil

Co-Owner of Eco Bear Biohazard Cleaning Company

Together with her husband, Emily Kil is co-owner of Eco Bear, a leading biohazard remediation company in Southern California. An experienced entrepreneur, Emily assisted in founding Eco Bear as a means of combining her business experience with her desire to provide assistance to people facing challenging circumstances. Emily regularly writes about her first-hand experiences providing services like biohazard cleanup, suicide cleanup, crime scene cleanup, unattended death cleanup, and other types of difficult remediations in homes and businesses.