Why It’s More Expensive To Be Poor

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It defies logic, right? That the poor would pay more for basic life items, essentially ensuring that they stay in the cycle of poverty forever. But people can forget that if you are living paycheck to paycheck, then it often becomes impossible to afford buying more than one thing at a time.

For example, you are less likely to buy a staple item like toilet paper in bulk and it costs 5.9% more when purchased individually. Also, because your income is time-sensitive, you are unable to take advantages of sales, because you might not have the money to buy something as the sale is running.

Additionally, big up-front costs become more difficult, meaning you’re more likely to buy low-quality or used items. Look at it this way, if you can’t afford a reliable car, you are going more likely to buy a cheap, used car. A cheap car can end up costing more in the long-term due to more frequent breakdowns and higher maintenance costs. This applies to other large purchases such refrigerators, computers, washing machines, etc.

For a further breakdown of how expensive it is to be poor, take a look at this infographic. There are few recommended steps that you can take if you are in a paycheck-to-paycheck cycle. Start by calculating your monthly bills and evaluating how you can reduce them. Create a budget. Avoid debt when you can. Debt means interest, which will only take more money out of your pocket. Save what you can, when you can. Every little bit adds up over time.

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Via: InvestmentZen.com

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