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Old 10-27-2012, 04:51 PM
 
Location: DFW
6,717 posts, read 11,166,301 times
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Just something I've been pondering recently.. it seems like it's actually quite expensive being poor. I won't go through the details but look at these articles for more:

The High Cost of Poverty: Why the Poor Pay More

Why Being Poor is More Expensive Than Being Rich | Prose Before Hos

America

Being frugal = Getting all the benefits of being poor (except welfare) without the additional expenses of being poor (i.e. check cashing, subprime loans, lack of auto transportation, etc.)
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Old 10-27-2012, 05:25 PM
 
Location: Vallejo
13,437 posts, read 15,041,010 times
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Interesting insight into the mind of the poor. I don't have time to mail the bill but plenty of time to go waste going somewhere and paying a 10% fee. I mean, it's more true in California which has postmarked laws (paid when postmarked, not when received) but those bill pay services are everywhere in poor neighborhoods here too. Same thing with banks, especially with Mexicans. I mean, it makes some sense as the banks they dealt with in Mexico were basically criminals who would frequently blackmail you if you wanted your money. At least you know what you're getting with a 2-5% fee to cash your check. But this is America, not Mexico. If enough checking accounts get closed for NSF, you'll of course have difficulty getting a checking account. Other than that, it doesn't matter what your credit is. Just balance your check book and it doesn't matter how crappy your credit is. That isn't really being poor or not poor. Plenty of not poor people can't balance a checkbook either, they just generally are more knowledgeable and understand that not paying the bank back is going to result in more unpleasantness and it's in their own interest to pay what they owe least they end up bank less and paying 2-5% to cash every check.

Payday loans have to be my favorite however. Again, it's not being poor. I've been poor and still had okay credit despite a few late bills and bouncing a rent check once. I mean, it's not likely I was going to waltz on in and get the .9% on a brand-new car or anything, but I could certainly get a credit card. I kept getting those suckers with the 0-6% balance transfers and just rolled my balance from one to another circa 2004-2008 when I graduated and was finally able to pay it off.

Also, it kind of annoys me whenever they talk about subprime loans... that's all I qualify for, generally. I'm just now getting to where I have enough years of tax returns they'll consider that instead of the W2 I don't have seeing as how I'm self-employed.
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Old 10-27-2012, 06:30 PM
 
837 posts, read 1,569,936 times
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Interesting articles. They missed a few things (or I missed in my skim reading) I'd have added.

I always thought of the socioeconomic work "ladder". At the bottom is some PT no-benefits job. Then maybe just above that a FT job with no benefits. Then move up one more level and maybe you gain some health insurance. At a semi-decent job, you add 401K to that mix, move up another step on the socio-economic ladder and maybe you add HSA and FSAs, a real 401K match, move up another step and you add in tuition reimbursement or subsidized daycare costs or even closing costs on your new home or corporate housing. At that point maybe you've also got a little expense account, a corporate laptop, blackberry - they might even be paying for your home internet, and you might be able to deduct the taxes on your home office. Keep going up that ladder and the corporate expense account grows - now instead of 1 or 2 lunches for your team once a quarter, its weekly dinners for clients. Keep moving up that ladder... now maybe you've got a credit card that you put $5,000 or $10,000 of a month of corporate spend on - against which you earn points - then maybe you start international business class flights, so you get status with the airlines and hotels, so when you travel on vacation you get free internet, free suite upgrades, free executive lounge access, free breakfasts and free rooms. Your rental car and flights end up being free too. Go even further up that chain and now you get access to corporate jet, 'executive' healthcare packages, company paid for retreats and private vacation homes, etc..

All of this.... and we haven't even STARTED to talk about salary.
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Old 11-01-2012, 03:39 PM
 
Location: Sinking in the Great Salt Lake
12,899 posts, read 18,446,350 times
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I'd say it's expensive to be STUPID, not poor.

Having poor credit and paying higher rates for loans is not a function of poverty... its a result of making poor choices beforehand.

The same goes for paying late fees or other assorted fees that come from overstretching one's finances.
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Old 11-01-2012, 03:48 PM
 
Location: southwestern PA
20,426 posts, read 35,707,564 times
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Quote:
Originally Posted by Chango View Post
I'd say it's expensive to be STUPID, not poor.

Having poor credit and paying higher rates for loans is not a function of poverty... its a result of making poor choices beforehand.

The same goes for paying late fees or other assorted fees that come from overstretching one's finances.

I agree.
I grew up in poverty, but my mom NEVER paid late fees, or did payday loans, or had bad credit.
We did without instead of racking up fees and debt.
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Old 11-01-2012, 05:45 PM
 
Location: California Mountains
1,448 posts, read 2,493,948 times
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Quote:
Originally Posted by Chango View Post
I'd say it's expensive to be STUPID, not poor.

Having poor credit and paying higher rates for loans is not a function of poverty... its a result of making poor choices beforehand.

The same goes for paying late fees or other assorted fees that come from overstretching one's finances.

What he said.

There is one thing that does not make sense to me in the first article: the kind of grocery Mr. Carter, one of the "poor" people cited in the article, bought. $9 worth of hot fried chicken wing? For $9, I could easily buy enough chicken to cook for a week or two of good meals. A liter of soda? I don't remember when I spend money on soda. The high price of grocery is not a form of penalty that applies to the poor, only to the people with poorly eating habit. One does not need to be rich to eat well or to shop wisely. We (husband and I) live on a very fixed income (IIRC, it's $21 above poverty level), and we do not consider ourselves poor. We live within our means, but IMHO, we live well. We have excellent credit, and aside from medical debts from a recent heart attack and another two years of car payments (we are one-car family and we never shop at the high-priced convenient store), we do not spend our money on anything that is not normal to the vast majority of Americans. Not payday loans, not high credit card interest, not insufficient fund penalty, not check cashing fee. Before the medical bills, we travelled often, we saw the world years after years without incurring debts.

If we can live well with an income very slightly above poverty level, I dare to say most people could as well.

Last edited by Ol' Wanderer; 11-01-2012 at 06:38 PM..
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Old 11-01-2012, 06:19 PM
 
3,886 posts, read 5,124,765 times
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It's also expensive to overeat. I live on half the food that they are buying and have fewer medical bills.
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Old 11-02-2012, 03:42 AM
 
24,511 posts, read 34,122,907 times
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I'll sum it all up: It's expensive to be stupid.
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Old 11-02-2012, 04:42 AM
 
Location: "Daytonnati"
4,245 posts, read 5,748,743 times
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The part on the working ppor was pretty good (in the first article) , and on using the bus.

And on getting ripped-off in inner city markets.

I use the bus here in Dayton and the urban poor...or, probably, working poor...use the bus a lot to go out to big box grocery stores out in the suburbs because they get better deals at them. The bus srevice goes right up to the store in some cases, so it reduces in a small way the inconvienience of doing this.
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Old 11-02-2012, 04:44 AM
 
Location: "Daytonnati"
4,245 posts, read 5,748,743 times
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Payday loan, check cashing places, and also the RAL (refund anticipation loan) operations are whats' called "Fringe Banking", and have replaced the old-school pawnshop as a way of getting money.
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