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Financial Literacy - March 31, 2022

5 Ways Being Poor is Expensive

It can sound contradictory to say that being poor is expensive. But many times, poor people have to spend more money to get by in their daily lives.

The poor man usually pays charged twice. When you don’t have enough money, you’re compelled to make short-term judgments that add to your long-term financial burden. This leads to a vicious cycle of poverty.

Nobody wants to be in a bad financial situation. Or live in a situation where their expenses outweigh their income. Or where they are unable to make ends meet from paycheck to paycheck. 

Here are five ways being poor is expensive.

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Getting to work is Expensive

Many low-income individuals cannot afford to own a car. Most factors to consider are fuel, insurance, wear and tear, services, and significant repairs.

As a result, taking public transportation is frequently the sole option for getting around. 

If you’re poor and live far from your workplace, commuting there will cost you more than someone who lives closer to their workplace.

Public transportation can sometimes be unreliable, resulting in a chain reaction. You’re late for work, and you’re given a warning, or you’re passed over for promotions because you’re as unreliable as your mode of transportation.

This is one proof that being poor is expensive.

Late Fees Are Penalised

Poor people live paycheck to paycheck and take loans to survive until the end of the month, yet many monthly expenses will be unattended even with that loan check.

You will be penalised if you do not pay your debit orders or monthly membership payments on time. So, when you’re poor, debt continues piling up, and it’s challenging to climb out of that hole.

Loans are needed to make it to month-end

Having enough cash to get you through the month is a pipe dream when you’re poor. The only way that poor individuals, if not all of them, can make their payments is to take out a loan from unscrupulous lenders.

These lenders impose excessive interest rates, compounding over time and creating a vicious cycle.

Debts make it harder to meet their financial responsibilities as it accumulates.

Poor people pay twice when they buy cheap things

We understand that it’s one of those instances where you’re stuck between a rock and a hard place. Poor individuals can only afford inexpensive products, which do not last as long and must be replaced more frequently.

Spending a large sum of money on a high-quality name or a brand item is not even an option.

Unfortunately, products that are affordable to the poor are of bad quality. They’re a low-cost version created using the worst components and ingredients and put together with little regard for the buyer.

Products are frequently defective, knowing that the poor will not bother returning them because it is simply not worth their time or effort. 

Banks favour rich people over poor people

The most profitable customers to a financial institution are not the poor but the rich. Affluent individuals increase the bank’s revenue while poor people struggle to make ends meet and desperately take a loan. 

As a result of the obvious answer, banks aim to discourage poor individuals from using their services and instead encourage them to search elsewhere.

The poor pay into the bank, whilst the wealthy paid to bank

For example, many banks demand that a certain amount of money be kept in the account. If you don’t have that minimum amount, the bank will charge you to keep the account open.

Access to healthcare is Expensive for poor people

Money equals good healthcare, which equals a healthier and longer life.

So, what happens if you don’t have any cash? Quality healthcare is thrown out the window.

Inequality in healthcare is a concern, and studies show that poor individuals are more likely to become unwell. Political, social, and economic inequities are the root causes.

Marginalised groups frequently lack access to information that can help prevent many illnesses. And have limited access to decent hospitals or doctors who are not close by. 

Medical costs are too high; poor living conditions make germs or bacteria more likely to spread. And family members are frequently forced to quit their jobs to care for a sick relative. 

As a result, this caused a loss of income for an already struggling family.

You’ll notice large lines of individuals waiting to visit a medical expert if you drive past a low-cost healthcare institution. 

That will never happen in a doctor’s office where only the wealthy have access.

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