In the United States, the income gap between the rich and everyone else has been growing markedly, by every major statistical measure, for more than 30 years. According to the UC Berkeley economist Emmanuel Saez, the disparities between rich and poor are so pronounced that America’s top 10 percent now average more than nine times as much income as the bottom 90 percent.
Numbers are one thing, but when you put it in a particular perspective, it sheds a whole different light on the problem. So when one Redditor posted the question “In what way is it expensive to be poor?” on Ask Reddit, it was destined to hit close to the bone for many.
And when it feels like this may be a tricky question that’s deeply counterintuitive, in reality, it does make a whole lot of sense. Like, paying a times-ten fine for not having a parking ticket because you just can’t afford one. Let’s see what other fellow Americans had to share on the subject matter, and it’s more illuminating than you’d think.
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The quality of stuff you're able to buy. For example someone struggling for cash will may pair of shoes for £5 that last for a short period of time and need to be replaced every two months. And someone who is more well off can afford to buy a pair of shoes for £40 which last about two years. Therefore at the end of the two year period the poorer person has spent around £120
Mental health. Or more specifically stress. You will always have stress about future, always making decisions based on your poverty so that it won't affect your situation in bad way.
Biggest one that I always think of for all my fellow Americans is medical care. If you’re poor you put off medical care as long as possible, and it’s extremely expensive by the time it’s serious enough to address.
I saw this UTube once. A kid about 14 hrs had fall off his skateboard but the skateboard had swung back on him , hitting him in the privates literally cutting him from bottom to top . Poor kid was screaming in pain , and someone shouted “Quick call an ambulance “ as blood was all over him .... Through his screams he shouted back “No my mum will kill me don’t call an ambulance “ Wow that really hit me, as if that were my son , the first thing I’d want him to do is to take care and call for help. But this kid knew better and had it drummed into him to never call for help. America needs to do better , much bloody better .
The idea that it’s expensive to be poor may sound counterintuitive. But life is pricey in itself, no doubt. And if you break down the average American’s monthly expenditure, most of it goes towards housing, transportation, healthcare, childcare, and food and clothing.
In numerous ways, the system benefits individuals more the bigger their bank account is. According to Mallory Sanborn, a senior associate at Access Ventures, the concept of the overdraft fee is one of the examples.
“While many banks offer overdraft protection and market it as as a service, it can result in the accumulation of fines that make it more difficult to maintain a bank account. If you have insufficient funds in a linked savings account to cover the overdraft, this 'service' can cause more harm than good. Overdrafting by $5 results in a $35 overdraft fee.”
Being stuck with higher interest rates because you don't have enough credit to get low rates.
I know people need credit for various reasons, but stepping away from the buy on credit consumerist mind set would benefit many. The buy now, pay later is a terrible deal for things like house appliances, cars, holidays, clothes etc.
"The poor pay interest, and the rich collect it."
This may draw some flak. I grew up poor with some really old fashioned folks that really look down on owing anything. In that sense, frugality was drilled into me. But I am relatively debt-free besides mortgages. Any extra cash goes into investments since the interest from the mortgages are lower than my returns from the investments. It took 4 decades to start from dirt poor to relatively comfortable. I would like to say it is hard work and great insight but it isn't. It's plain old fashioned frugality for me.
You have to buy a cheap, unreliable car, that will inevitably cost you more in repairs, poor fuel economy, higher insurance etc.
Sadly, the majority of the profit banks make through these fees comes from the accounts of the poorest of the banking population in the US. The numbers speak for themselves—Americans paid a staggering $15 billion of overdraft fees in 2016 alone.
The payday loan is also something that many Americans find themselves grasping onto as a last resort when their financial situation is particularly difficult. When you have little or no savings and your car breaks down, which is the only way for you to get to your job, a payday loan becomes the only option.
But according to The Economist, in 2013, the average interest rate on a payday loan was 322% compared to the average credit card interest rate of 15%. This is cold evidence of how the system that feeds on the poorest of society is broken.
You can't afford to buy a place and essentially throw the money away into rent instead of paying off a house and being able to sell it after.
If you're ever desperate enough to take out a title/payday loan you'll discover you just stepped in financial quicksand.
Payday loan lender should just be lined up and shot! The rates of interest they charge is pure GREED, and that much greed is a deadly sin.
I saw a lady coming out of a laundromat, loading her baskets of clothes into a taxi (there is zero other public transport where I saw this happen and only a few taxis).
Not being able to put enough money together at one time to buy a car or a washing machine (she probably rented so this maybe wasn't even an option) was costing her a fortune. Just being nickeled and dimed to death.
I don't doubt that woman might have been poor, but appearances can be deceiving. I am working/middle class and we do have our own laundry machine, although we're renting (which is pretty normal here in Korea anyway), but an appliance can betray you when you need it the most, so what do you do? Well, use a public laundromat first, then call your appliance service once you have time. OR Korean winters can be so freesing, laundry at home becomes forbidden due to the freezing of water pipes, causing property damage to the neighbours. In this case, we use the public laundromat as well.
Not MONEY expensive, but TIME expensive. Everything takes longer, and you always have to wait. The bus, the laundromat, the store, the line for Money Orders or check cashing...
Before they installed the self-check registers, the Wal-Mart near my work was guaranteed to have a 10-minute wait in line, no matter when you went. Once, there were 42 people in each of the only 2 lines open, at 7P.M. on a Friday. I thought, "They can only get away with this because these people have no other choice."
There's no way the store in the nice neighborhood up the road would ever allow that, their customers would have a fit.
Also, if you're rich you can pay other people to take care of time intensive daily tasks so you can spend your time on things like growing your business or making more money.
In every manner.
If you want healthy food, that costs. But eating cheap food, while sustaining, will inevitably lead to poorer health.
Bad health will cost you.
If you want to not be stressed-and stress is huge when it comes to health-then that means not having to worry is kind of an integral part of poverty.
Stress means less awesome interpersonal relationships, means less sleep, means overwork to try to make ends meet.
Good interpersonal relationships, getting enough sleep, and not working yourself to exhaustion are things that help you stay alive.
Mentally, you now have a running total of how much everything in your life costs. I guarantee you that every poor person knows exactly, precisely, how much milk costs or gasoline, or a bus pass, or the subscription to Netflix that brings them just a little joy and if they can afford it or not. There are no coins in their couches, $5 to discover in an old coat; they need that money and they know where it is.
And if not, now they have to spend time (another expense!) dealing with debt collectors, or people at utility agencies or banks or government offices, trying to negotiate and navigate systems that may or may not be willing to help them (regardless of that system's original intent).
Poverty is merely the accumulation of expenses that one cannot pay and once you are poor, there is a system in place to ensure that you never, ever run out of those expenses.
Rent is more than a mortgage for my apartment would be, but I can't afford the down payment.
I was looking online for house a the other day because my daughter and her boyfriend are looking to buy. If you have great credit like they do, mortgages on some really nice houses with several acres were about $800. But to rent that same house was $2100. There were a few average houses for $450 mortgage, but rent was about $1400. I regret screwing my credit up when I first moved out 24 years ago st 18.
There are late fees for everything. Overdraft fees at the bank. Sh*tty jobs usually don't have good healthcare plans. If you're poor, you need credit cards just to survive, but interest rates are higher for those with low credit scores (see late fees above). Sh*tty cars are always breaking down, and that's expensive...
Now they disguise late fees as "prompt payment discounts"....it's the same thing.
Time is also expensive. I use to spend 4 hours a day on a bus just to get to work. If my manager let us out 15 minutes late, I'd have to wait an hour downtown at night because I JUST missed the bus. The bus came evert hour after a certain time.
Therapy is $400 PER SESSION even with the insurance from my job. My job doesn’t pay enough to live on my own. My spouse and I are slowly falling out of love and I’ll end up homeless and dead either way (working non stop and can’t afford living still or spouse passes and still end up homeless and dying). I’m on the autism spectrum and getting further insight costs more than what I can afford after my bills are paid. When everything is paid, I have $20 left. There’s no ladder for me to climb. I try my best to stay upbeat, because in the past I’ve already attempted suicide 3 times. That’s won’t help. But yea, poor sucks because your whole life is more expensive than it feels it’s worth many times. But somehow it’s still beautiful in tiny ways. Death won’t take me that easily; that f**ker has to fight to get my soul after the abyss of madness I’ve seen on Earth... and survived.
The justice system. If you can’t pay a fine, the state will make things more expensive by adding fees on top of fees on top of fees, then they will incarcerate you for not paying the inflated fees. Then you have to pay the parole officer who is keeping an eye on you while you care unable to get a job that pays enough to pay him.
You also cannot afford to sue people that did ilegal things. When I was in germany I worked for a university. My contrat was part time for 600 euros a month (less than half the minimum salary) but they made me work 50-75h a week 7days a week (our 'weekend' was to process the data). I informed the university and they say "we are sad that you dont like the job". I know that if I sued them I would have won because its super illegal. But I didnt have the savings to pay a lawyer and a translator and pay rent for the many months that it would last.
Can't afford to buy bulk at Costco, so end up spending more and getting less in the long run...
Being unable to pay for education is the most expensive way of staying poor. And don’t come with scholarship and that stuff, it is expensive af and even more if you are like me from a poor third world country
Low paying jobs can also be physically harmful ie factory work, and you can be treated like garbage because it's cheaper to pay out the occasional law suit and medical expenses rather than resign the factory and make it less efficient to be safer.
There is the phrase, "buy nice or buy twice." It basically means that you should buy the nicer product because you'll need to replace it less often.
For those people who can't "buy nice" they are forced to buy an inferior product multiple times.
An example is work boots. A $100 pair of boots may last 5 years. A $20 pair of boots may last 6 months. If you can't afford $100 boots then by the time 5 years is up, you would have already spent $200 on cheap boots.
Geez, would be great if my hubby's work Boots lasted 5 years. We are lucky if they last a year and they cost about $120-$150.
In certain parts of British Columbia, you have to pay a fine if you're caught panhandling. Homeless people literally have to pay money for asking for money.
Renting to own anything is really bad. You pay 4X the value of whatever it is you're renting to own. And if you miss a payment they repossess it and someone else might start at the beginning of attempting to pay for it again. Not only that you very well might be paying 4X the new value for a used item. And only low quality items are sold rent to own. Ashley furniture, sh*tty used cars, the cheapest big screen tvs available at wholesale. Houses might be better, but rent a center, and JD Byrider are worse than loan sharks.
I once had to pay money so I could set up a payment plan because I had no money. Because I was to broke I had a bunch of late fees so a 100 dollar ticket ended up being around 1500 when all was said and done
My car has a leaky seal on the transmission. It'd be about $250 to replace the seal and flush the transmission. I don't have $250, so I keep topping up the fluid and keep driving it because I'll never get $250 if I don't get to work. But, in time, that's going to destroy the transmission, which will be about $1200 to replace.
When bank fees are waived if you keep more than $X amount in your account, but they start charging for the account when the amount drops under the minimum.
... and that makes the amount fall more below the minimum, making it even harder to stay above the minimum the next month.
Not being able to afford preventative care can get expensive fast.
Be it cars, homes, bodies, or relationships.
This has probably been said already, but good cooking.
For us, middle class now, it's easy to assemble a meal from what is in the pantry and freezer supplemented by what's in our garden or in the stores within three blocks of my house.
It feels thrifty, healthy, sensible.
But to get to this point took a lot of investment. We have pots and pans, spices, flour, oils, vinegars, bags and cans of staples, grills, steamer, measuring devices galore. We have the knowledge of cooking that comes from being able to afford to learn what we liked by going to restaurants, and having the spare time to watch cooking shows, and the energy to cook everyday because we don't have two jobs each with long commutes.
And if you don't have $500 to put together a basic kitchen, or secure private cooking space so that your investment won't immediately be soiled or stolen, you're likely going to be eating a lot of fast food. And that isn't the most nutritious foundation for the next day.
If you’re poor you already have no or very little money to invest in yourself, so you have to take on debt to do so. If you want to get technical certifications or degrees. Sometimes there’s financial assistance but a lot of the time taking on loans is necessary.
WSJ on youtube did an article on the cost of education in the US for public colleges. It’s a viscous circle.
Note: this post originally had 58 images. It’s been shortened to the top 30 images based on user votes.
Been helping out a homeless couple lately. The three best purchases I made for them were raincoats, hunter grade sleeping bags and a smokin joe barbeque. These people survive with very little. Anything helps. If you were poor but came into some good fortune, help those that need a hand up. You'd have wanted someone else to do the same for you in that spot.
The most sickening thing is how businesses bend over backwards to give wealthy customers all sorts of perks and discounts, yet low budget customers are often treated differently and do not get the same benefits. It is disgustingly hipocritical when the wealthy customers do not NEED discounts and preferential rates, and lower income people need all the help they can get. I see if every day and it is so unfair and unethical.
Maybe I misunderstood but seems to me that being poor in Germany /Portugal (countries that I experienced living) it's wayyyyy different then being poor in USA, not only because of health system but at all. It's correct?
The answer to so many of these is knowledge! I wasted years of rent, because I didn't know I could get a 0% down mortgage with mortgage insurance. I was fiscally responsible, and ended up with a lousy credit rating because I didn't establish a credit record. I ended up spending months in fear of jail, and spending $1,000 because I didn't know the local laws about buying used cars. As I've pointed out to others, churches or other non-profits can point you to inexpensive therapy. You can get a free education if you can get reliable access to the internet (which, believe it or not, is still a big "if" even today.) But you need knowledgeable help on all of these matters. And when you don't have money, you don't learn these things,
Puzzled that "no volume discounts" (e.g., paying monthly instead of yearly up front) isnt/wasnt near the top-3 when I looked. Can't afford to stock up on good offers etc.
They didn’t mention all the freebies celebrities get. Everything from clothes to makeup to brand new cars. It’s absolutely disgusting
The world is so very ready for a Universal basic income. That way people can afford all these things and instead of stressing and having poor health they have the space in their heads to volunteer, create music and art, set up groups and clubs and classes, study for a better job etc. it would make the world so much better
Almost everyone has been poor at some point in their lives. Most weren't aware of it at the time (children, students), but most who are aware in hindsight should acknowledge it and feel some empathy for those who struggle. It doesn't take a huge outlay to do something that makes a tremendous difference in someone else's life. And remember that the phrase "pulling yourself up by your own bootstraps" originated as a joking slur against the impoverished, because it is an impossibility. Haha. When you're tempted to trot it out, remember that. I'd venture to guess that those who give clothing, cash or food to the homeless guy on the corner are much more likely to be working class than wealthy. And a great number of folks are about one or two paychecks away from falling into poverty due to accident, illness, divorce, or job loss. Practice gratitude and charity. The cost is less than you imagine.
I think the top one in this list is not being able to invest. If you have enough disposable income to park in U.S. stocks, you are going to make a lot of money over time. And the more you make, the more you make - it's like a runaway train
Supermarkets and gas stations are cheaper on the rich side of town than on the poor side. .
One thing I didn't see was heat/AC. When it's cold, space heaters run your electricity bill up fast and if you have an old AC unit you spend more money on your electricity bill than you would with a new one not to mention it's also expensive to get it fixed but new units are too expensive so you end up paying more in electric bills and repairs, and that is if you have the money for a repair only for the AC to go out a week later.
Some grocery stores even leave areas that they deem 'too high-crime' (as opposed to putting in safety measures). This means that people in those areas have to buy their food from convenience stores, which are hugely expensive, or take find a way to get to the grocery store; bus service in most of the US is appallingly bad.
Been helping out a homeless couple lately. The three best purchases I made for them were raincoats, hunter grade sleeping bags and a smokin joe barbeque. These people survive with very little. Anything helps. If you were poor but came into some good fortune, help those that need a hand up. You'd have wanted someone else to do the same for you in that spot.
The most sickening thing is how businesses bend over backwards to give wealthy customers all sorts of perks and discounts, yet low budget customers are often treated differently and do not get the same benefits. It is disgustingly hipocritical when the wealthy customers do not NEED discounts and preferential rates, and lower income people need all the help they can get. I see if every day and it is so unfair and unethical.
Maybe I misunderstood but seems to me that being poor in Germany /Portugal (countries that I experienced living) it's wayyyyy different then being poor in USA, not only because of health system but at all. It's correct?
The answer to so many of these is knowledge! I wasted years of rent, because I didn't know I could get a 0% down mortgage with mortgage insurance. I was fiscally responsible, and ended up with a lousy credit rating because I didn't establish a credit record. I ended up spending months in fear of jail, and spending $1,000 because I didn't know the local laws about buying used cars. As I've pointed out to others, churches or other non-profits can point you to inexpensive therapy. You can get a free education if you can get reliable access to the internet (which, believe it or not, is still a big "if" even today.) But you need knowledgeable help on all of these matters. And when you don't have money, you don't learn these things,
Puzzled that "no volume discounts" (e.g., paying monthly instead of yearly up front) isnt/wasnt near the top-3 when I looked. Can't afford to stock up on good offers etc.
They didn’t mention all the freebies celebrities get. Everything from clothes to makeup to brand new cars. It’s absolutely disgusting
The world is so very ready for a Universal basic income. That way people can afford all these things and instead of stressing and having poor health they have the space in their heads to volunteer, create music and art, set up groups and clubs and classes, study for a better job etc. it would make the world so much better
Almost everyone has been poor at some point in their lives. Most weren't aware of it at the time (children, students), but most who are aware in hindsight should acknowledge it and feel some empathy for those who struggle. It doesn't take a huge outlay to do something that makes a tremendous difference in someone else's life. And remember that the phrase "pulling yourself up by your own bootstraps" originated as a joking slur against the impoverished, because it is an impossibility. Haha. When you're tempted to trot it out, remember that. I'd venture to guess that those who give clothing, cash or food to the homeless guy on the corner are much more likely to be working class than wealthy. And a great number of folks are about one or two paychecks away from falling into poverty due to accident, illness, divorce, or job loss. Practice gratitude and charity. The cost is less than you imagine.
I think the top one in this list is not being able to invest. If you have enough disposable income to park in U.S. stocks, you are going to make a lot of money over time. And the more you make, the more you make - it's like a runaway train
Supermarkets and gas stations are cheaper on the rich side of town than on the poor side. .
One thing I didn't see was heat/AC. When it's cold, space heaters run your electricity bill up fast and if you have an old AC unit you spend more money on your electricity bill than you would with a new one not to mention it's also expensive to get it fixed but new units are too expensive so you end up paying more in electric bills and repairs, and that is if you have the money for a repair only for the AC to go out a week later.
Some grocery stores even leave areas that they deem 'too high-crime' (as opposed to putting in safety measures). This means that people in those areas have to buy their food from convenience stores, which are hugely expensive, or take find a way to get to the grocery store; bus service in most of the US is appallingly bad.
