[OrwellianChild]

A simple example is the concept of living paycheck to paycheck... If you work on contract or hourly and payment is delayed (either because there weren't enough hours to work or your client is slow to pay), one of two things happens:

1) You are wealthy enough to have credit and perhaps a bit of cash savings, and you can pay your bills with that savings/credit card. When your paycheck comes, you pay down the short-term credit and you are as good as if it never happens.

2) You have no credit and no savings. You must directly choose between which bills you can and cannot pay. Some bills go into default or incur late fees. Other bills may cancel service because you cannot be relied upon to pay. In this scenario, when the paycheck comes, you pay your late bills, but you are left with the extra fees, lost services, and are at a net-loss going into the next period.

Compound scenario 2 for a few periods, and you start to incur heavily negative consequences that are very difficult to overcome.