It Costs More to be Poor

There’s a cost to being poor in this country. For those of us who are solidly middle class, who have the cash or even the credit to buy quality goods, its often not something we even think about. If my options are to buy something for $10 that will last one year, or buy something for $15 that will last 2 years, obviously its less expensive to by the $15 version. Paying more now saves us money in the long run.
But what about the people who don’t have that extra $5 today? In the long run, they pay $5 more than the person who did. But it still seems cheaper to them, because that’s what they can afford today. (This is how Wal-Mart stays in business.)
You may scoff at $5, tell me that someone who can’t come up with an extra $5 deserves what they get. I’d disagree, as I’ve been in spots where I didn’t have an extra $0.05, let along $5, but how about on a bigger scale.
In March we had to replace our tires. If I had been paying attention, I would have known this was coming up and planned specifically for it. But I wasn’t paying attention, so it caught us a little off guard.
I was given a choice of tires. The least expensive was $600. The most expensive was $800. This is not an inexpensive purchase to begin with, though a necessary one. There are many, many people who can’t afford that extra $200. The problem? Paying an extra $200 now saves $600 in the future.
How does my math work? The $600 tires were warranted for 30k miles. The $800 tires were warranted for 70k miles. So over the next couple of years, as I drive 70k miles, I could either pay $800 today and be done, or I could pay $600 today, $600 at 30k miles, and $600 again at 60k miles. Even pro-rating, I’ve used 1/3 of the tires life at 70k, so the tires at 60k have cost me $200 at 70k miles.
Let’s do the math:
600+600+200=$1,400
$1,400>$800
1,400-800=$600.
There we have it. Over 70k miles, I can spend $800 on my tires or I can spend $1,400 on them. The problem with the way this math works with reality is that the poorer I am, the more likely I am to have to pay the $1,400.
And while tires are an easy example to use because of the mileage warranty and the big numbers, I know tires aren’t an every day purchase. But groceries are. Think of how much you can save by being able to afford a CostCo membership, by buying in bulk.
We all know its cheaper to buy in bulk. But what happens when you have a specific amount of money for groceries that you can’t go over for the month, like people on food stamps? It may only cost $15 to buy 10lbs of chicken where 5lbs costs $10, so you know the 10lbs is the better buy. But if your full allotment of grocery money is already accounted for buying milk, bread, canned veggies, etc, where does that extra $5 come from?
The answer is, you spend $10 on 5lbs of chicken, because that’s what you need this month, and that’s what you can afford. And next month, you’ll spend $10 on 5lbs of chicken again.
There is a hidden cost to being poor in this country, a cost that can make it exceedingly difficult to save or get ahead, through no fault of their own.