Being Poor is Expensive. In fact it’s more expensive than being rich or even middle class. The reasons are many. it doesn’t seem like this is true but it is. Some of you reading this right now understand because you’re living it right now. You understand because you’ve been there and you live it every single day. Struggling just to get through each week, each month and each year. Even the middle class are having a hard time now and they are losing money, losing homes, and becoming poorer each day. This article focuses on why it’s so expensive to be poor, and offers up some ideas for some solutions to the problem.
It’s Very Expensive For a Poor Person to Have a Bank Account
BANKS: First is cost more to get loans because of higher interest rates. This can cost hundreds, thousands, or even tens of thousands or more over the life of the loan. Plus banks charge insufficient funds charges on accounts which have no money (what is that anyway? banks KNOW when you don’t have money, but they charge you money they know you don’t have to begin with; It’s a scam and a scam that is hurting millions of people and putting them further in debt. Worse…when you say something about it, when you confront the banks about it, all you get is “it’s banking policy” or even worse, you get victim blaming when they say something like “You should keep enough money in your account to pay your bills on time.”
This of course transfers the blame to you and shifts it away from them. The term ‘victim blaming‘ would infer that people who get charged insufficient funds fees are victims. They are. They are victims of a long time, government sanctioned legalized scam. A scam where the government made a law which allows banks to charge people money who obviously do not have money. How else would you describe it? The banks know you don’t have money in your account, and they charge you money for not having money.
Hmmm. Worse, they say “Well, you agreed to it when you signed up for the account.” And they are right. In most circumstances you signed your name when you opened your account agreeing to it. Not to mention the charges for using other bank’s ATMs and account fees, transfer fees, and other miscellaneous fees. It’s expensive for a poor person just to have a bank account. It could cost as much as $500/year or more to have a bank account. That’s a large some of money for poor people. Hell, it’s a large sum of money for most people.
It’s Very Expensive To Get a Loan When You’re Poor
LOANS: When you are poor you will typically have a lower credit score. Not because you’re a bad person or that you don’t do what you say you’re going to do, but because you’re always struggling financially and it’s much harder to stay on top of your bills. When that happens, your credit suffers.
This in turn causes you to pay much higher interest rates on car loans, mortgages, and personal loans (which will cost you a lot more than rich or middle class pay) and that’s even IF you can qualify to get a loan to begin with. Which you most likely will not be able to do because your credit is already in bad shape because of all the bills you’re behind on because your bank keep charging you fees for not having enough money.
But don’t worry. There are SHARKS out there circling, ready to give you a loan on the title of your car and charge you what equates to 200% to 300% of your loan amount or more. Then when you can’t pay that they will take your car, you’ll lose you job because you can’t get to work, and then you’ll be homeless because you don;t have a job to pay for your house.
This happens all the time. People think poor people are lazy, but they do not understand, that’s it’s not the poor people’s fault. The system is rigged to support the rich.
Even the middle class are suffering now and being thrown into the poorhouse due to predatory loans fomr companies and banks.
Buying Furniture & Electronics For Your Home Costs More When You’re Poor
FURNITURE & ELECTRONICS: This is a category most people don’t really think of when you’re thinking of reasons why people are poor. Well, furniture, besides a car and rent is probably one of the large expenses in any home next to food and clothes.
Just so we’re clear, poor people don’t have much money. So they don’t usually have thousands of dollars sitting around to buy quality new furniture.
They usually get what they can from friends and family, or go to thrift shops and second hand stores. Even there, furniture is not “cheap”. Not to mention TVs, game consoles, and entertainment electronics. So, fret not, there are SHARKS out there that take advantage of poor people, and people who don’t know any better.
The SHARKS offer RENT-TO-OWN “DEALS” with no credit checks and usually very low or no deposit. All you need is a check stub from your work to prove income. Seems like a good deal. But it’s not. The interest rates and finance charges are so huge you could pay double or triple what it’s worth. And if you can;t pay them (you signed a contract) they will garnish your wages. If you still can’t pay, they will report you to the credit bureaus thereby damaging your credit even worse.
You’ll end up paying double for the products you purchase due to extremely high interest rates and finance charges.
When You’re Poor You Can Usually Only Afford Inferior Lower Quality Products
INFERIOR LESS THAN GOOD QUALITY PRODUCTS: Transportation. This is a BIG one!
Cars and trucks specifically. Inferior automobiles cause multiple snowball problems for poor people or people with low income. Problems which costs poor people hundreds if not thousands of dollars per year, and could cost them their jobs as well.
As we know inferior products break down more often than quality products. A car or truck it is most people’s primary mode of transportation. Without it you cannot go to work, grocery shopping, drop off or pick up the kids from school, or pick up prescriptions from the drug store.
You can’t haul anything or carry anything around or take your family on longer road trips or vacations even if you had the money because the car or truck is most likely second hand and not mechanically sound enough for long trips.
Which means you’re stuck at home, running to and from work, stressing, hoping your vehicle doesn’t break down. But it does. And that cost you money. Money you didn’t really have. But somehow you pull through and figure it out. Sometimes it doesn’t work though.
Not to mention the fuel cost. Fuel cost on an older vehicle is higher because older vehicles typically have worse gas milage thereby increasing your overall fuel costs. Insurance is required by law, and sometimes it’s lower for an older car so there might be some savings there. But when it breaks down (because it will happen) it’s very expensive. A few hundred dollars at the minimum up to thousands of dollars for more difficult mechanical problems. Poor people can’t afford that, but somehow they barely scrape by. Sometimes they don’t though. Sometimes a broken down vehicle will cause them to lose their job. If they can’t get to work, their employer will terminate their employment.
Get Off The Grid!
The system is broken. It makes sense to separate yourself from something that does not have your best interests in mind. The system doesn’t work anymore for us, the common people. It has betrayed us. We are being robbed and the only way to stop it from taking our money and ruining our lives is to protect our livelihood and our families.
The system is stacked against poor people and now it’s stacked against the middle class as well. Middle class folks are having the same problems now, and what’s worse, it’s all being done by the greedy uber rich elite who care nothing for the people and only about making more money at the expense of the people. It’s profits over people mentality. The middle class are being robbed by the rich and the poor are being blamed for being poor. Worse, they actually have the nerve to blame poor people for being poor.
It’s got to stop.
So what can you do?
You could sell everything you have left close and all your accounts but then what? You still have to have transportation and shelter and the basics, food, water, septic, etc. So you disconnect. You unplug. You get rid of things that are draining your bank account.
Only purchase quality goods and services. Don’t scrimp on quality because you will pay more in the end.
“…IF YOU CAN’T AFFORD THE BEST, BUY THE BEST YOU CAN AFFORD…”
It’s All About The Pots & Pans
Pots and pans are an odd thing to think of when you’re talking about getting off grid and plugging financial leaks, but I’d like to take a moment and use it as an instructional analogy to show how buying quality is cheaper than buying cheap.
So, you go to the store to buy a set of pots and pans for your home. Most of you probably cook at home, and some of you really love to cook so you understand the value of quality cooking utensils.
If you purchase the cheap pots and pans for $75, you will need to buy them again in 1-3 years. It will happen. Handles will break off, teflon coatings will flake off (don’t use teflon coated pans, the flakes are toxic and could cause health issues). Cheap pots and pans will warp and bow and will not sit on the stove properly, risking a spill of hot food or boiling water which could also injure you or a family member or friend and cost you even more money in costly medical bills.
Cheap pots and pans will not last long. 1-3 years typically depending on how much you cook. It’s just not worth it. So you’ll have to buy another set in 1-3 years. Not too bad, right? No, it’s bad. It’s bad because now you just spent $75 again. Then in another 3 years you’ll have to buy another set for another $75. Now you’re 6 years down the road, and into it for a total of $225 and if you continue this cycle over 10 years you’ll spend $300 or more on cheap pots and pans.
Buy Iron, Steel & Stone
However, if you buy cast iron and steel pots and pans they will last a lifetime and you will never have to buy them again. Unless of course you lose them.
So, if you live to be 80 years old and you started buying pots and pans when you were 20, that means you saved $300 in pots and pans every 10 years for 60 years, for a total savings of $1800. Buy a full set of cast iron and stainless steel pots and pans for $1000 NOW and never worry about it again! You’ll still save $800.
$800 doesn’t sound like a lot of money overall does it? I mean if you had $800 right now, sure, it would be nice and I could think of lots of things I could do with $800, but the point here is time and money and how that money could be reinvested into making your life easier, more rich and less poor.
See, if you went ahead and spent $1000 on quality steel and iron products now you could take that $800 in savings and invest it.
If you bought your iron and steel pots and pans in 1966 and reinvested that $800 savings in 1966, it would be worth $243,586.86 today.
$800 INVESTED 60 YEARS AGO WOULD BE WORTH $243,586.86 TODAY!
Yes! That’s right. Over the course of the last 60 years since 1966 if you had invested $800 in a simple S&P index fund —which returns an average of about 10% annually— it would have produced almost a quarter million dollars for you!
Can you see now why you’re losing money if you by cheap stuff?
If you bought the good stuff, not only would you still have your pots and pans, you would be $243,586.86 richer for it!
Expand This Strategy To Everything in Your Life!
Buy the BEST! If you can’t afford to buy the best, buy the best you can afford now and upgrade later.
There are many things you can save tens of tousands of dollars on and reinvest that saved money into.
When you buy iron and steel and stone, it’s both a literal thing and an allegory. The pots and pans analogy represents quality in all things you buy. It represents longevity and shows what can be done with the money you save.
Being poor sucks. I’ve been poor. I grew up poor, not as poor as some, but just as poor as many. We had to bring in water from the well in buckets (which is fine if that’s by choice; but it wasn’t, it was by necessity). We would go to the food banks to get food, my parents would sell items they owned just to put food on the table. My dad worked, but money it seemed was always tight. Mom worked too, but money was always scarce. We ate peanut butter sandwiches and lots of potatoes. Sometimes dad would splurge when he was working, but a lot of the time money was always tight.
Being knowledgeable about how to save money and reinvest those savings is key to not being poor anymore. Really living is about enjoying that richness both monetarily and in your lifestyle. It takes work and dedication.
It’s truly living sustainably. If you’re continuously replacing worn out used and broken items that is not a sustainable way to live. Bad loans and expensive financing costs you lots of money. All of it is a constant drain on your bank account whether you realize it or not.
Sure some things wear out eventually, but isn’t it better to buy things that never wear out or last a very long time?
It will go a long way to prolonging your life too because you will have less stress because you’ll be worrying less about things breaking down or not working anymore. You won’t have to worry about your car breaking down, or the interest rate on your home, or the bank charging you fees for not having money.
Less stress is good for your health. Stress is has been linked to almost every major cause of early death there is. People need to just chill.
The best way to do that is live sustainably and that starts by getting your finances in order. You do that by getting rid of all your cheap stuff and buying quality items. If you buy quality most times it will be a one-time purchase and then you never have to worry about it again. Everything you buy needs to be the best quality possible.
Off grid living is about living sustainably at it’s core. It’s not just about being disconnected from the power grid or producing your own electricity and solar power.
It’s about living your life and teaching your family how to live their lives sustainably with less impact on the planet and your bank account.
Because in the end it’s about the choices you make today.
You will be rich, in both money and life if you simply live sustainably.