Having money gives you a really, really big upper hand. Let's take the example of buying a car, for instance. If you have a job that pays decently but doesn't really have credit, getting a reasonable interest rate to finance a new vehicle that's covered under a nice new warranty and gets good gas mileage is next to impossible. Meaning you're going to get gouged by interest or not approved for said car loan at all.
When you crunch the numbers, you find out that the $20,000 automobile you want to finance over six years is going to cost you close to $30,000. So you either bite the bullet and get royally screwed after hopping from dealership to dealership, or you go and buy a used car. Now some people can get used cars that are absolutely fine and don't give them any problems, but then there's the flip side of that equation.
If your used car breaks down and needs repairs all of a sudden, that little bit of money you saved up starts going into your vehicle. Because if you don't have reliable transportation then you're not going to be able to go to work. And if you can't get to work you can't pay to fix the darn thing anyway. Or make one-stop haul trips to bargain bulk supermarkets so you can save money on groceries. Do you see the trend here?
It's hard to pull yourself up by your bootstraps if you need a second freaking mortgage to afford some laces. There seems to be a system set in place that's designed to keep poor people poor no matter what they do. Live in the Tri-state area and are trying to save money on the myriad of tolls that you're hit with every month? Get an EZ Pass! But what happens when the company slams you with a $50 fee for a toll that costs a grand total of...wait for it....$0.00!!
According to the NY/NJ Turnpike Authority, I owe over $3,000 in fees for toll roads...for my EZ Pass failing to pick up a toll that cost...$0.00. Figure that one out.
But this is just one example of how expensive it is to not have money. In a recent Reddit thread, people shared the ways being poor ends up costing them a lot of cash.
Not having laundry at home.
"Not having in-home laundry is a great example. Say it costs you $4 to do your laundry each week. In five years you will have spent over $1,000 on laundry. For $1,000 you can get a good washing machine that would last you through those 5 years, then another five years, and maybe a lot more. And that doesn't count the time saved doing laundry at home, and any transportation costs." - Ladis_Wascheharuum
The boots condundrum.
"If you're well off, you buy one pair of boots for $150 and they last a lifetime. If you're poor, you buy boots for $30 and they last a winter. You end up spending more because you can't afford to spend more." - english_mat
Remember what I was talking about with cars?
"My car has a leaky seal on the transmission. It'd be about $250 to replace the seal and flush the transmission. I don't have $250, so I keep topping up the fluid and keep driving it because I'll never get $250 if I don't get to work. But, in time, that's going to destroy the transmission, which will be about $1,200 to replace." - pokey1984
A leaky roof.
"Our roof is leaking. It’s $1,000 to fix it. I know the water damage is happening and will be enormously expensive. But we just don’t have the $1,000." - Kyelly
Parking tickets blow.
"Parking tickets. I couldn't afford the $2 to pay to park my car so I get a $30 fine. After 2 weeks, it goes up to $60 and so on. If I didn't have $2 to park in the first place, I don't know how they think I can pay more." - butterthenugget
The wonderful world of banking.
"If you can't maintain a minimum balance or you don't have a bank account, you've got to pay fees to cash your paychecks. Then there are fees to buy money orders to pay your bills — or you can pay the cost of getting TO the utility office or car dealership or wherever to pay in cash." - BobosBigSister
Not being able to afford a Costco/Sam's Club/bulk store membership.
"Not being able to buy more than you need to save money in the long run. The toilet paper in the larger bundle is less expensive per roll? Too bad — you can only afford the smaller package. Buying peanut butter? If you get the bigger family-sized tub of it, it's cheaper by the ounce. But if you can only afford the smallest size, too bad. It sounds like it's not a big deal, but when you're counting individual coins, the savings from buying in bulk can definitely make a difference." - gwistix
You can rent...but no mortgage for you. Sorry.
The word "mortgage" comes from a French word that means "death contract"— WTF Facts (@mrwtffacts) March 19, 2021
"You can’t afford a $800/month mortgage according to the bank, so you get to pay $1,200/month in rent!" - 26Point2PipeDream
"I once had to pay money so I could set up a payment plan because I had no money. Because I was too broke, I had a bunch of late fees, so a $100 ticket ended up being around $1,500 when all was said and done." - chiphchopchip
I guess that's what they call "compound interest."
Cheap food. Cheap health.
"If you want healthy food, that costs money. But eating cheap and unhealthy food, while it may sustain you, will inevitably lead to poorer health. Bad health will cost you." - Gentleman_Villain
Low-paying jobs with little to no benefits.
"Low-paying jobs like factory work can be physically harmful, and you can be treated like garbage because it's cheaper to pay out the occasional lawsuit and medical expenses rather than change the factory's practices and make it less efficient to be safer." - strengthinarches
"Time is money. If you rely on public transportation, especially somewhere where it isn't efficient, then it can take an hour-plus on the bus just to get somewhere, and then another hour back home, as opposed to 10 minutes of driving. If so much of your time goes to traveling to and from work each day, you don't have the time or energy to learn new skills, cook for yourself, etc., resulting in more expensive habits like eating out more, and so on." - Sihplak
Payday loans are MASSIVE SCAMS more often than not.
"If you're ever desperate enough to take out a title/payday loan you'll discover you just stepped in financial quicksand." - New_Game_P1us
Rent to own.
Do. Not. Do. It. There's a reason some of these stores are under Federal investigation.
"Renting to own anything is really bad. You pay 4X the value of whatever it is you're renting to own. And if you miss a payment they repossess it and someone else might start at the beginning of attempting to pay for it again. Not only that you very well might be paying 4X the new value for a used item. And only low quality items are sold rent to own." - rhb4n8
Any type of lending, period.
I was finally approved for a credit card to begin repairing my credit. It’s been a journey to get here.— naerchan (@naerchan) March 19, 2021
Total debt at 22: 723k
Total debt at 28: 0$
Now to start accruing the debt that lenders like, instead of unpaid hospital bills.
Truck by 30 goal is real and obtainable.
"When you have money, banks and companies compete to get access to your reliable spending, be it with low interest rates on borrowing or better deals for early payment. They have to compete because you have the option to go to someone else who will gladly take your payment history and stable income.
You're a safe bet, so you have the luxury of choice.
When you don't have money institutions know you have nowhere else to go. So they happily gouge you knowing agreeing to horrendous loan terms is your only option." - Chiggadup
"Tires! Used tires cost 1/3 price and get about 20% of the life of a new tire. Also you are paying mount and balance every time, plus worry about blow outs. Even a new tire at $80 with a 30K mileage expectancy or a $100 tire at 65k mileage warranty. Over twice the life, little more than 20% in extra charge." - tireguymatt
If I had to buy a policy on the open market for myself and my husband it would cost me $42K per year to use it.(premiums, copays, oop max etc). I don't even have a job that pays that much. We need single payer, no fee at POS healthcare, not paying to make INS Co's RICH!— Christina Roberts (@ckroberts71) March 15, 2021
"Not being able to afford preventative care can get expensive fast.
Be it cars, homes, bodies, or relationships." - Ghostbuster_119