Five Ways The Poor Pay More Everyday
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The truth is it’s expensive to be poor.
When you're poor things cost more. They cost more in monetary value, they cost more in time, and they cost more in the daily hustle. A Reddit thread recently posed the question: What are the items that poor people buy that most people know nothing about? The answers were quite revealing.
From motels when you can’t qualify for an apartment to replacing medicine with animal antibiotics, this thread highlighted how the poor in America struggle to get by. For those living in poverty, every day is a financial struggle, and when systems are in place that actually cause the poor to pay more, it’s hard to break out of that poverty.
So here are 5 ways the poor pay more every day:
1. People living in poverty only buy necessities which can actually cost more
When you have limited financial means you can only buy items you need. You have to shop by necessity and this means you may not be getting the best deal. We know that it's cheaper to buy items in bulk, but what if you can't afford the upfront costs? Reddit user Meepshesaid wrote:
When you are broke, you can't plan ahead or shop sales or buy in bulk. Poor people wait to buy something until they absolutely need it, so they have to pay whatever the going price is at that moment. If ten-packs of paper towels are on sale for half price, that's great, but you can only afford one roll anyway. In this way, poor people actually pay more than others for common staple goods.
The poor also pay more in having to replace items. It would be preferable to buy quality items, but sometimes necessity dictates you buy the cheaper pair of shoes in order to afford your groceries as well. Reddit commenter DrStephenFalken said:
So I can buy $60 shoes that will last or $15 walmart shoes. So I buy the walmart shoes and some groceries instead of just the $60 shoes and no groceries. Three months later I'll need new shoes again. But I'll also have to pay rent and my light bill is due. So I'll pay the light bill and buy some "shoe glue" for $4 to fix my shoes for another few weeks until I can buy the $15 ones again.
These are not easy decisions, but when you have limited resources these are the tough choices you have to make every day.
2. People are unable to access cheaper items due to limited transportation
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The poor often do not have access to good transportation. Large families may have to share a car, or they may not own a car at all- making transportation an additional expense. As a result, they cannot travel to the discount stores and are forced to buy supplies at the local corner store.
Prices in urban corner stores are almost always higher, economists say. And sometimes, prices in supermarkets in poorer neighborhoods are higher.This is due to the increased operating costs the stores face, and it’s pushed onto the customer through inflated prices. At the corner store a gallon of milk could actually cost you a dollar more than it would at another shopping center, but you don’t have the transportation means to get there.
3. From cash checking to late payments, there are unavoidable fees
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If you’ve ever struggled with money, then you know sometimes you have to decide which bills you can afford to pay that month and which ones have to wait. This means late fees. It means interest rates when you only pay the minimum balance on your credit card.
For many though, it also means unavoidable fees when you need to have your check cashed. The wealthy may have direct deposit, but obtaining a bank account for the poor may be difficult. Without proof of income, proper ID, or a minimum balance, people living in poverty sometimes have trouble opening a checking account. This leaves check cashing services which charge a fee for every transaction.For a $300 dollar check you might pay $15 in fees.
4. Poor credit means a higher interest rate and higher longer term cost
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To compound this, if you are unable to open a checking account you’re going to find it nearly impossible to get a loan. Loans have the same requirements as a checking account, but they are also looking for good credit. To put it bluntly, this is something the poor do not have.
People with good credit scores are able to get a lower interest rate which means they’re only paying slightly more for whatever loans they need.If you have bad credit though, your interest will be higher which means your monthly costs will be higher as well.
Because options were limited to begin with, the poor have to accept whatever high interest rate is offered to them and thus can pay exorbitantly more in the long run.
5. “Time is money”
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We’ve all heard this expression before, and for the poor I think it holds true in two ways. Randy Albelda, an economics professor at the University of Massachusetts said, “When you are poor, you substitute time for money.” This means instead of saving time and having your laundry sent out, you save money and do it yourself. Instead of paying for a car and saving time on your commute, you save money and take the bus instead although it increases the time it takes you to get to work. In order to save financially, you have to pay with your time.
The second way I think this expression is true, is that people living in poverty are generally employed in low paying jobs which means they have to work more hours just to make ends meet. In this case, time literally is money. They clock in and clock out at physically demanding jobs, being paid a low rate, just to make a meager check at the end of the week which may not cover all their expenses. In “Nickel and Dimed: On (Not) Getting by in America,” Barbara Ehrenreich said “What you don't necessarily realize when you start selling your time by the hour is that what you're really selling is your life.”
I’ve heard it said that “people living in poverty are poor because they made bad choices.” I don’t agree with this. To say people living in poverty have made “bad choices” implies they had choices to begin with.
Personally, I’ve had financial struggles. I can remember in college cashing my work study check each week and immediately crossing the street to hand it into the bursar’s office to help cover my tuition. I remember having to decide if I was going to buy a Monthly Metrocard (which at the time cost $89) or buy a Pay-Per-Ride card. I knew the Monthly card would save me money in the long run, and ultimately I’d pay more by buying the Pay-Per-Ride card, but at the time I couldn’t afford to pay $89 up front. I knew which one was the smarter option, but really, I only had one choice available to me.
It’s these kinds of difficult choices that people living in poverty are forced to make everyday. If we truly want to address this inequality, we have to change the systems that keep people poor.