This is why the sensible thing to do is to save up a cushion of 6 months. You can continue with your employer health care with COBRA for 6 months or a year.
For example, I know a fellow who told me he could not handle the slightest disruption in his paycheck. He was driving a new car, living in new house, wore expensive clothes, and was starting a family.
A friend of mine living in an apartment told me he was unable to pay his bills. I asked him what the payment was on his new car. I suggested he sell the car, and buy a car he could pay cash for. He surprised me by following my advice and was able to reduce his stress about his finances.
My father, an officer in the AF, was once tasked with counseling the privates on their finances, as many were unable to pay their bills on the local economy. (The AF really tries to be a good citizen in the community where the base is located.)
The privates were paid every two weeks. Half of them drank their paycheck away and ate steak for the first week, and begged/borrowed/stiffed others for money the second. They received the same paychecks, but half could not manage their finances. My father would counsel them, work up budgets for them, all for naught.
Or, another scenario, the 'poverty line' is arbitrary and hardly an indicator of universal financial power.
In other words : the poverty salary 'line' tells you nothing of burden, it's just a magic number. If an individual has multiple unknown burdens, their 'poverty line' is at a much different , unknown, level.
I live in California, mostly. I know of families that live (far) below the 'Poverty Line', but because they send everything they can back to their home country for the rest of their family to live on.
Suddenly an individual at the poverty line is supporting 3-7 people in another country; and has no real legal way to justify or exemplify the practice in any legal financial way that would signify their increased burden - they become essentially a lost statistic and generally lie on their taxes due to fear of losing the arrangement.
Individuals that lead this style of life tend to go back home periodically simply because the burden of living in the US with a sub-poverty income isn't realistic.
tl;dr : The poverty income line alone means next to nothing in personal context. Don't assume that you can dwindle every persons' life down to fitting within it, that's not realistic. Saving money is absolutely important, I agree, but let's not just assume that that kind of financial flexibility exists for every individual. It'd be nice, but it's fantasy.
For some other people, if they'd drop the "keeping up with the Joneses" mentality even just a little bit, they could develop significant savings.
Yes, there are many people in the US who are just barely getting by, and can't meaningfully save without making cuts to essential spending, but that certainly doesn't describe everyone who currently lives paycheck-to-paycheck.
Signed, a homeowner who sees a lot of his less well off neighbors making much more extrvagant purchases than he does.
Braces for downvoting
If you're a democrat, it's because the economic deck is stacked against people.
I thought that a very large majority of credit card debt was healthcare costs and other structural life costs, so that is score one for the democrat view, although we are a very unhealthy population (so back to the republican view a bit)
Then again, the real estate bubble showed that people were getting way too much house (republican view)... of course enabled by almost no oversight of the lending and financials underling it (democrat view).
There are numerous Americans and American institutions whose work specifically involves pushing the interests of insurers, pharma and hospitals on Capitol Hill, against those of average people who work minimum wage jobs and can't afford basic coverage.
Our system is messed up.
