Ten Financial Reasons it Costs More to be Poor
Everyone knows that being poor feels terrible, but one of the worst things is that poor people have to face a number of difficult uphill battles. From having bad credit to paying late fees, being poor invites even more poverty. If you need some incentive to make money or fix your financial situation, then read these top 10 reasons why costs more to be poor. These are the most common problems that you will face on a monthly, and sometimes daily, basis.
Paying Late Fees
People who are poor have a hard time paying bills because they just don’t have enough money to pay for both essentials and bills. Letting a credit card payment slip by doesn’t seem as bad as going without food for a few days. At the same time, this causes many late payments that require even more money.
Most credit card companies, banks and other lenders will charge you at least $20 to $30 just for missing a payment. The fee often gets higher as more payments are missed. It’s hard to notice how they cumulate, but these late fees can easily cause poor people to pay hundreds or even thousands more than they would normally have to.
No Credit and Bad Credit
No credit and bad credit are the same. Being poor makes it difficult to gain access to credit cards, which makes it hard to increase your credit score. Some people can’t even get a credit card from the start, which is even worse because this is fairly easy.
Having no credit or bad credit makes it much harder to get a house, car or anything else that you really need to live an independent life.
Higher Monthly Costs
The worst thing about bad credit is that it will increase your monthly payments, which makes it even harder to escape poverty. You will have to pay higher interest rates or fees on your credit cards, loans and any other monthly bills. People who have an average amount of income often pay less per month than those who are poor.
Pre-loaded Credit Cards
A pre-loaded credit card is basically the same as a debit card. You load the credit card with money so that you can use it for your expenses. These are often the only credit cards available to poor people. Not only is their spending limit based on how much money you can supply, which probably won’t be much, but the worst thing is that these cards won’t help your credit score.
Title loans allow you to get some money if you use your car as collateral. Many people use title loans for some quick cash, but there is a major problem with this type of loan. If you miss any payments, then you lose your car. Poor people will often get these loans because they desperately need money, but they’ll usually miss a payment within a few months.
Much like payday loans, these loans have incredibly high interest rates. You can easily pay double or triple the original loan amount by the time you are finished.
Poor people are forced to jury rig nearly every problem. For example, instead of being able to fix the plumbing if the pipes burst, you’ll have to use tape or try soldering the leak and hope that everything holds. This can lead to much bigger, and more expensive, problems within several months or years.
Not only that, but you might have to contract less-than-professional workers to fix your problems. For example, you might only have enough money for an unlicensed electrician who may cause a fire due to faulty wiring.
Too Many Kids
If you look at statistics, then you’ll notice that poor people often have more children. There’s nothing wrong with kids, but there’s a major problem with having too many kids and not enough money. The most obvious problem is that you won’t have enough money to pay for food, doctors and other essentials.
Many people think that they can get around this by applying for food stamps. If you make too much money according to the program, even if you have many children, then you won’t be able to get food stamps. You need to be below a certain level of poverty to get assistance.
You want your children to do better than you, and college is often one of the best ways to improve one’s income and job opportunities. It’s becoming difficult to get a job without a degree. Poor people have two problems paying for college.
The first problem is that they don’t have enough money to pay for the upfront costs. The second problem is that poor people make too much to get assistance and certain scholarships.
Being poor forces you to be in survival mode, which can be incredibly stressful. You will constantly feel anxious about making money, getting sick, buying just enough food and managing your finances. It’s fairly common for poor people to have strokes, heart attacks or nervous breakdowns if anything unexpected happens, like a hospital visit.
This will reduce your longevity, make it incredibly difficult to enjoy any aspect of life and clouds your thoughts. Aside from just feeling awful, this will also make it difficult to make the right decisions to eventually end your poverty.
The truth is that most homeless people have mental health issues or are veterans suffering from post-traumatic stress disorder, but another leading cause of homelessness is having bad finances. While most people who are poor won’t be permanently homeless, you might have to go through this for several years before getting a job that’s good enough to support your needs.
Being poor feels awful, but there are a number of additional issues that you will have to deal with on a regular basis. Aside from higher payments and terrible credit, you’ll constantly feel stressed and anxious. If this is a destiny that you want to escape, then it’s time to consider your current finances or get a good job so that you have enough money for common expenses.