It’s Too Expensive to Be Poor
Some people think it’s easy to be poor. You don’t have enough money to buy a lot of things, so you have to buy fewer things. But actually it is not. When you’re broke, you can’t do all the little things that will improve your budget in the long run. In fact, it costs more to be poor.
When you’re poor, you can’t wholesale food , buy quality items that will last you long , or own your own technology instead of renting it . It costs money in advance to save money in the long run. To make matters worse, poverty often has hidden intangible costs that make it even more difficult to get out of poverty.
Food can be cheap, but healthy food is expensive
Any college student can tell you that getting food when you’re poor is not that difficult. Ramen is less than twenty cents a pack. The problem is getting healthy food. Ramen is composed of 20% empty calories and 80% salt. If you were to eat this at every meal for years, your health would be at serious risk in the long run (at least that’s what my doctor told me).
This was exactly the situation I found myself in when I was broke . Time was more precious than my health, and fast food was easier than cooking at home. And it was not much more expensive. This led to an unhealthy food hierarchy: On a good week, I could buy hot dogs from my local QuikTrip store for $ 2. On a bad week, it was Ramen all day. Two liter bottles of soda in the store cost less than orange juice or milk, so if I wanted to drink anything other than water, that’s exactly what I got.
So, a few years of this diet will already be pretty bad. The long-term effects were worse. Even when I started earning more, the habits stuck. Soda is still a staple in my diet. It took a long time to form the habit of making real homemade food. It’s easy to think that you’ll just change your habits once you get more money, but you don’t realize how many bad habits you are building.
It is difficult to get out of this trap. Healthy eating costs an average of $ 1.50 more per day (or ~ $ 45 per month) than unhealthy diets, according to a study by the Harvard School of Public Health . When you have money, it doesn’t really matter. However, if you set a federal minimum wage of $ 7.25 an hour and work 40 hours a week, that is approximately 3.6% of your annual salary. If you can work 32 hours a week part-time (which is more common with minimum wage jobs), that’s 4.5% of your annual income. Before taxes, by the way.
With $ 1.50 a day accounting for nearly 5% of your annual salary, it’s no surprise that you prefer $ 1 soda over $ 4 orange juice. Who the hell cares about “long term health effects” when you can barely pay your rent? Do you know what has serious “long-term health effects”? Eviction. I will pay the rent today and worry about heart disease later.
When you are poor, you cannot afford to think long term. I knew it would be smart to buy something from the big membership stores , but I couldn’t even overpay the membership fees. I knew that eating hot dogs at the gas station and ramen would kill me someday, but until that day came before the lease was due, I had to come to terms with it. I could probably work a little better if I planned on preparing more food ahead of time, but like 6.8 million Americans, according to the Bureau of Labor Statistics , I had to work multiple jobs to survive. I didn’t have enough time to be healthy and I didn’t have enough money to save money.
Cheap car repairs are more expensive and public transport sucks
Work doesn’t really matter if you can’t get to work. Car ownership is expensive even after you have paid the original cost. Public transport may be more suitable for low-income people, but it is not always available in every city.
When you’re poor, transportation comes with two major hidden costs. First, a lot of expensive car repairs can be avoided … if you have the money to fix them early. Before, I hadn’t paid attention to changing brake pads for months. My car was starting to make that familiar squeal that indicated that I didn’t have much time before the brake pads disappeared. I hated noise, but more hated the overdraft on my account. So, I turned up the stereo volume and tried to drive less.
Replacing brake pads can cost an average of $ 145 , depending on your vehicle. If I had to spend $ 145 to replace brake pads (assuming I even had that much in my account), at best I would spend my budget on food for a month. At worst, it won’t be enough to pay for utilities. So I put it aside.
On at least one occasion, my brakes got so bad that they grinded the rotors. If this has never happened before, grinding the rotors will make an awful metal-on-metal sound . Replacing a rotor also costs hundreds more than replacing brake pads. Of course, I successfully postponed one consumption, but when the rotors broke, I got a kick out of it. The longer I waited for basic service, the more expensive the repairs became.
However, waiting was often my only option. Unlike buying healthy food, there were times when I literally had no money. Not “I have this money, but I shouldn’t spend it.” Rather, the repair of the car is $ 145, and on the account there is $ 12. And I still have to drive to work. There is no third option.
Public transport is a great option, but many cities don’t provide it. If yours, then all is still not good. On public transport, you will face a completely different price: time. What would have been fifteen minutes’ drive turns into an hour’s bus ride. If you miss the bus, you will lose another 10-15 minutes. When you only have a couple of hours a day to spare, that hour on the bus can mean you can’t cook decent food or do your laundry. This may apply to cars as well (“I’ll just do an hour-long oil change next week”), but with public transportation, the cost of time is really increasing rapidly.
Unfortunately, transportation is optional. If your car breaks down and you don’t have the money to repair it, you will lose more wages. Some even lose their jobs. The time spent on public transport can also make it difficult to adjust to things that get out of poverty, such as education. Ironically, just getting to work can get harder if you can’t afford all of the costs involved.
You need to dress nicely to move up, but new clothes are not a priority.
Despite the necessity, buying new clothes is often viewed as one of the stereotypically frivolous purchases. Why should poor people buy new or nice clothes when they struggle to make ends meet, right? The problem is, if you don’t spend money on clothes, you are paying huge social costs.
I worked at Walmart a few years ago. As with most retail employees, I had to buy myself a uniform. At that time, we were required to wear blue shirts and khaki trousers. Since I didn’t have either, I had to spend my entire budget on clothes to be ready to go (before I got my first paycheck, no less). The problem was that I worked on the street as a pusher of a cart. Navy blue shirts tend to fade in the harsh Georgia sunshine. Plus, my shoes wore out every three months from walking on the sidewalk all day. And not only “they look shabby” – my toes literally touched the burning sidewalk a few months after buying a new shoe.
Needless to say, I looked like shit most of the time. My shirts were discolored and my shoes were falling apart, and that was when I was on watch. The rest of my wardrobe looked even worse. All the money I could save on clothes was usually spent on a new uniform. The problem is, if I wanted to get a job somewhere else, the most beautiful thing I had to wear was my work clothes. It took a long time before I could afford to update my closet with anything even remotely presentable, while keeping up with steady churn. In the end, I only succeeded by opening a small line of credit in a clothing store. No matter how many people have advised against borrowing money when you’re broke, I just couldn’t afford the clothes I needed to look presentable in front of my employer before getting the job I was applying for.
Dressing Well Is An Uncomfortable Trick-22. If you are poor and you have a good wardrobe, people think that you are irresponsible with money. However, if you are poorly dressed, you are more likely to be rated poorly , especially in a job interview . How you dress can be the difference between getting a job and getting kicked out the moment you walk through the door. This type of effect is so powerful that even using a recognizable brand can improve the perception of others. It’s sad, but this is the world we live in.
Of course, clothing spending isn’t limited to social pressures. Simply keeping your clothes clean and presentable can also cost you time and money. If you do not have or do not have access to a washer and dryer, you need to visit the launderette. Not only does it cost money every time you clean your clothes, but it also takes precious time that could be better spent working, learning skills, or caring for your family.
The worst part is how frivolous it all sounds. To be honest, it is demoralizing. As someone who had to wear trashy clothes and even trashy clothes on weekends to work, I know what it feels like to be seen differently. You get comments on how you need new clothes. You are politely and uselessly reminded of how your clothes have faded. This implicitly implies that refusing to buy new shoes is a sign of low wages, but a sign of laziness. Why haven’t you gone to the store for new shoes yet? As if going to the store was the biggest obstacle.
However, it seems like caring about how you look is vanity, not practicality. The food is practical. Housing is practical. The transport is practical. New clothes? Why do you spend money on new clothes and then complain about how broke you are? Fortunately, you can at least ignore this way of thinking. You cannot change people’s perceptions by wearing old clothes, but you can at least ignore people accused of “wasting money.” You know, provided that you can scrape together enough to find clothes to start with.
Paying for anything that can ruin your budget
Pay avoidance is a sign of life or death for low-income households. This has its own category because when you are poor, royalties are everywhere . Commission for the presence of a bank. No bank fees. Late Payment Fees. Commission for payment with a certain type of card. Fees for Failure to Pay Fees. A person can drown in a variety of fees that disproportionately harm poor families.
One fee that has hurt me a lot over the years was overdraft fees. If I debited something from my debit card, and then it turned out that I did not have enough money, I was paid $ 35 per transaction. It doesn’t seem to be a problem, does it? Just don’t waste money that you don’t have, Eric!
Only when you are broke, you are not. You must over-analyze every transaction in your account. Not only how much, but when. If you pay your electricity bill today but it doesn’t clear until next week, you must remember that your bill is much more empty than it looks. In particular, my credit union had terrible software. His website looked like it hadn’t been updated since the 90s (and still hasn’t been updated). He had absolutely no tools to keep track of how much money was allocated for different purposes. The Available Balance field tried to indicate how much unspent money I actually had, but it was unreliable. The best I could do was keep a personal log of every transaction, but if I forgot something or made a math mistake, I got screwed up.
It got worse when my credit union applied transactions in order from highest to lowest, rather than chronologically. Let’s say I had $ 150 in my account and I accidentally spent $ 160. One transaction was a $ 150 electricity bill, and the rest were four transactions of $ 2.50 each. Even if the electricity bill was the last one I paid, I would sometimes find that it was debited from my account first, leaving me zero dollars. Then each $ 2.50 transaction will cost me an additional $ 35 in overdraft fees. If they were written off in the correct order, I would only receive one fee, but would instead be charged $ 140 in fees. Unfortunately, this happens much more often than it should . Sometimes it was my own mistake, but it also happened when deposits were not credited when I expected, or accounts were debited ahead of schedule. A small mistake due to someone having more money ruined my budget for several weeks.
Banks are not the only ones charging compounding fees. Every year I had to pay to register the car. In one particularly bad year, I had no extra money to pay for registration. I also worked one mile from work, so when it came time to choose between checking in or eating, I took the risk that I could get to work without stopping. A week after the expiration of the registration period, I was stopped. I was released with a warning and ordered to pay for the registration. A week later (even before I made enough money to pay for the registration), I was stopped again. Since this was the second offense, I received nearly $ 100 in compensation. This did not make it easier to pay the fine. In the end, I was finally able to pay off with the money I received from my relatives for Christmas. What I’ve always wanted.
Fees are everywhere when you are poor. Banks can charge huge fees for using basic services like checking. A simple traffic ticket can get out of hand, sometimes even leading to arrest and additional fees . Utilities may charge a fee when paying with a debit card. If you cannot get approval from the bank, payment schemes such as payment cards may charge you a fee just for using your money . All these fees add up to enormous suffering, which is much worse when you have no money. Failure to pay these fees only increases the fees, which means that, as in most areas of life, it is more expensive to be poor.
There is an element of responsibility in all of this. For example, could I walk to work instead of driving with an expired tag? May be! On the other hand, I tried this for a while, got caught in the rain and my phone was destroyed. At the time, I was trying to start writing about Android, so choosing to save money could derail my entire career.
This is why it is so hard to be poor. Of course, you can make choices that will reduce the load on yourself, but the margin of error is much smaller. Meanwhile, the amount of extra work you need to do to break even is much higher. You can spend dozens of hours every week trying to optimize every penny of your budget, just so that one mistake will ruin you for a month.
This is just my experience, but many people have felt much worse than me. In my worst moments, I was lucky enough to either have people who helped me, or I was lucky that I received unexpected income exactly when I needed it. Others were less fortunate. When the punishment for a mistake or accident is so severe that it is almost impossible for even the most hardworking people to break out of the vicious circle of poverty.