5 Things Nobody Tells You About Being Poor
Being poor is like a game of poker where if you lose, the other players get to fuck you. And if you win, the dealer fucks you.
A bunch of you reading this are among the 45 million "working poor" in America, and if you're not, you know somebody who is. Like me.
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Or 60 percent of all retired NBA players, according to this site.
I'm not blaming anybody but myself for getting into this situation (I was drunk for two straight decades) and I'm not asking for anybody's sympathy. What I am saying is that people are quick to tell you to pick yourself up by your bootstraps and just stop being poor. What they don't understand is the series of intricate financial traps that makes that incredibly difficult.
If you're not poor, that's awesome. I'm not mad at you, or jealous. Hopefully you'll never find out that ...
#5.
You Get Charged for Using Your Own Money
This is the future, where many businesses no longer accept cash as payment. That means you are required to have a checking account to function in the economy. And if you're poor, that means at some point you're going to get bank-fucked.
Because having a checking account while poor doesn't just mean you have to be responsible and good at math -- you have to be perfect. Meticulous, flawless record keeping is the difference between surviving and having the bank seize your next paycheck.
Let's say you're running late for work and hurriedly stop to get gas, paying with a bank card. In your haste you forget to write the $55 down (gas being $4 a gallon, you know). So while you spent the last week until payday thinking you had $50 in your account to absorb minor purchases, you actually were $5 in the red.
So payday comes. You go to the bank to deposit your check, at which point the bank takes it, sticks it in their pocket and says, "Thank you very much! I'm buying myself a new pair of shoes with that shit!" They then inform you that your account was at -$200 at the moment you deposited your check.
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Oh, it gets a lot worse, stock photo woman.
The bank can hit you with a $35 fine for every charge that comes in while you are in minus territory. The bank will not tell you they charged you this money. You will have no idea anything is wrong.
It's a silent chain reaction in which every charge that comes through during those few days before payday draws the $35 fee. The $8 you spent at the gas station for cigarettes, the $24.99 that automatically comes out for your Internet access ... for each, the bank silently zaps out the charge and $35 on top of it, until your next paycheck is gone. Five seconds of oversight gave the bank the right to take away a week's worth of your labor.
Some of you are saying, "Fine, just tell the bank to go fuck itself. Walk out the door and just do everything by cash or money order." Ah, but now when you get paid, you have to go somewhere to cash your paycheck -- and businesses charge up to $8 to do it. If you're working in the service industry, congratulations -- an hour of your labor just vanished ... just so you could use your own money. Some describe this as a "poverty tax." Others refer to it as a "Because fuck you, that's why" fee.
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The one piece of advice I can offer here is that you'll be surprised how many businesses will give you some leeway if you just call them and beg. Banks are run by human beings (as of the writing of this article) and if you get a person on the phone you can get them to waive overdraft fees, particularly if it's a first offense. Even businesses waiting on a payment will give you an extra week or two if you call and explain it. In this economy, they're so used to people just taking the money and disappearing that they're happy to hear you're operating in some kind of good faith.
Otherwise, you're going to be in a bind. And this is when you'll find out ...
#4.
There is an Industry That Profits by Keeping You Poor
Think you're too smart to ever use one of those shady "payday loan" places? Well, you should know that nobody thinks they're a good deal. People go there because they're choosing between which fucking provides the most lube.
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Yeah, when you're done choosing, just stay in that position, buddy.
Say the gas bill is a month past due, and they're threatening to turn it off (if so, it's $150 to get it reconnected). Or you're about to be late on a credit card payment (which would be a fee and a doubling of your interest rate). Or your favorite S&M whip broke, and Whipfest is coming up (entry fee is nonrefundable). That is when you find yourself swallowing your pride and heading to the payday loan place.
A standard 14-day "payday" loan charges $15.50 per $100 borrowed. So a $500 loan ends up being $577.50 (or 1.5 tanks of gas in interest). But if you don't have it after 14 days, that's fine -- they offer to extend your loan to 180 days. It makes the payments miniscule. Oh, and you'll be paying back $1,275 at 403.10 percent APR.
Yes, you got fucked, in the name of your financial asshole avoiding the credit card company's bigger, barbed dick. And it's a hell of a lot better than going over on your checking account again and starting up their infinite circular fuckatron.
Via Travelblog.org
Using this.
All right, let's say you wisen up. You save and cut back. You resist an offer to, say, buy a computer on Best Buy's finance plan, because you're too smart to take on more debt. And no monthly cell phone payments for you, oh no. You're not going to put yourself in a hole again!
Congratulations. You just did. It turns out ...
#3.
No Credit Can be Just as Damaging as Bad Credit
On the spectrum of financial responsibility, from "that billionaire who drives an old Dodge Dakota" down to "MC Hammer," you'd think that the next step up from being overdue on a bunch of bills would be to have no bills at all. Don't buy it if you can't afford it, right?
You'll find out the problem the next time somebody does a credit check -- having no credit will stop you from getting a loan or an apartment just as fast as having bad credit. And more importantly, if you have old bad credit due to a bunch of previous fuckups, simply vanishing off the credit map doesn't do anything to fix it.
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It sounds good in theory, though.
It took me six months to find a place to rent after applying for every property that appeared in the paper across five towns. I was denied each time. It was my lack of credit due to years of me and lenders deciding to just stay out of each other's hair, like those old sitcoms where roommates would draw a line down the middle of the house. I even used a prepaid cell phone where I'd just be buying minutes off the shelf rather than get locked into a contract with all those termination fees and shit. When I needed something big, like a computer upgrade or furniture, I'd wait for a windfall, like a tax return, and pay cash. It's called financial responsibility, motherfucker!
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Now hand over the heroin, bitch!
Nope. It turns out that to a business, a customer with no credit is like a girl giving you the silent treatment -- they assume something is wrong.
And everybody checks your credit -- if I want to get Direct TV, I have to pay $310 worth of startup fees (the size of your up-front payments/deposits depends on your credit history). Utilities are even more -- which means trying to move to a new place costs hundreds of dollars in deposits (remember the $150 to get my gas turned on). If I need a new car, well, let's just say I need to show up at the dealership with a shoebox full of cash.
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The last two kids I bought on the black market virtually wiped out my life savings.
So repairing credit means opening accounts (having a cell phone plan is a good one, having your utilities in your own name -- as opposed to the landlord's -- is another) and, you know, making sure to pay your fucking bills on time. And don't bother trying to shortcut the system by saving the shoebox full of cash, getting a loan, then paying it all off the next month. Length of credit is part of your credit score. They want to know your ability to make steady, long term payments without missing a month or being late.
The weird thing is, while I'm unemployed, thanks to the greatest parents in the world, I won't go hungry, and live pretty comfortably. The bad thing is, I feel INCREDIBLY guilty about it. I have such a severe case of narcolepsy that the insane amount of amphetamine I have to take is a) destroying my heart (BP @ 155/105 at 29 yrs. old), and b) its also made me pretty damned nuts. When you literally can't remember what you did yesterday, people aren't likely to hire you. I finally broke down and hired a lawyer to get disability. I should've done it years ago, but I felt like I didn't deserve it. I DID move out, get married, and try to make a run of it, but thanks to the aforementioned narcolepsy and BPD, the ex ran for the hills after 3 yrs. Its just weird how the medical stuff can stack up. On paper, I just look like a lazy douche, but, even according to people I'm NOT related to, I was f*cked from the get-go. It took years (and a bullet-hole in the wall) to see that, though. What I'm saying is, some of us need perspective to understand how we got to the bottom. I've don't drink or do drugs, but I still ended up hitting bottom. I just had better cushioning than most.
ReplyJohn, you're the only writer who can make me giggle and shed a tear while reading a single sentence. So many of your struggles are also my own.
ReplyJohn Cheese, EVERYTHING hits home. and what about the part where you feel like this is all you can do because whenever something knocks you down, even once, you feel defeated?....
Reply...but we still gotta try to get over/through this. I, As a member of the working poor, i need to get rid of that mentality that this is all i can do. I literary have asked my self "Is this the best I can do? Isnt their more I can do other than this? Will this be the end of me?" You, John, have proved that we can get out of this. We can do this. SERIOUSLY, Thankyou for not forgetting where you came from. I want to get out and when i do, NOT forget where i came from either.
I want to give John Cheese a hug.
ReplyI want to give him 2 hugs
this article proves that rich get richer and poor get fucked over and out (ref. Busta Rhymes). Simple example - you pay interest for any loan, cos you poor and take loans, while rich guys deposit shitloads of money for which they get interest: these are the same extra money you pay for your loan. So, it's a logical system with linear dependency. I never expected something logical to not make sense in the real. Thanks, capitalism, I owe you. Literally.
ReplyThis article made me slightly sad because this has been my entire life growing up, and I didn't actually know that there was another way to live until I became an adult and saw (with some bitterness honestly) how my friends didn't have to struggle to make ends meet.
ReplyThen 3 years ago I was put in the hospital right after I lost my job (I got pneumonia, missed a day of work, and they fired me, which stressed me out and the pneumonia got a chance to nearly kill me), and suddenly I went from having no credit (which was bad but doable) to having 40k in debt from one week in the hospital.
Now for some reason some people say that credit based companies don't look at hospital bills, since nearly everyone has them, but I would like to say that is major bullshit. Add in another layoff (this time with the school district cutting back it's extra-curricular activities) and suddenly I'm homeless. Every moment I had before was trying to pay off the 40k, and then suddenly I have no job.
It's an endless cycle when you're poor, and there aren't many ways to pull yourself up. I'm working now as a cashier, driving a car that regularly catches fire, and on the side trying to find more steady work, and yet everyone says, "just try harder".
Well to them I politely say, f**k You.
John, I wanna tell you that I really appreciate you writing this on behalf of all the people out there in the same, or similar, situations. I also want to let you know that I'm sorry you had to go through s**t like this, I don't wish this kind of a life on anyone (Ok, I liked, I wish it on assholes that like to say s**t like "It's your own fault (sometimes it's true and it is, but usually, especially in this economy, it's not, and they say it regardless) and to those who say "Get a f*****g job" when really, it's not at all easy. But only for a while, so they know that it really isn't as easy as applying for financial aid, going to school, and getting a job). I really hope that this opens some eyes, and I'm sure it will. I'm glad things are starting to look up for you, I wish you luck :)
ReplyWell written!
ReplyRE #2 "Everything in a poor person's life is a cash vampire...About twice a year, something under the hood grinds to a halt or melts -- always another $500 on a tow and repairs. And that was the money I was saving to get a more reliable car." I am not completely sure what is meant by "cash vampire" here but you should think of a car as a utility expense rather than an investment. The vast majority of cars do not appreciate in value and represent ongoing costs to the owner throughout the ownership period. There are many resources that calculate the total cost of ownership for different cars. But keep in mind the total costs of unreliable transportation - lost time being stranded, dealing with repairs, missing work, etc.
ReplyBy 'cash vampire' he means something that was cheap, but poor quality, so that it incurs maintenance expenses and/or needs replacing often so as to more than cancel out the low price.
A car is expensive to run, but a sh*tty car is more expensive to run.
RE #3: "They want to know your ability to make steady, long term payments without missing a month or being late." Actually, what *creditors* want to know is if you are profitable for them. I read once that credit card holders who pay off their balance each statement period (and thus do not pay interest) are actually referred to as "deadbeats" (See PBS Frontline: Secret History of the Credit Card). Although I dislike it, I can understand the point of view of the creditors. What bothers me more is when parties who are not actually extending you credit, or who are taking on much more minimal risk than a credit card company (for example, utility companies) want to use your credit history to evaluate whether or not they want to enter into a contract with you.
ReplyIt seems like a lot of the problems surrounding poverty have to do with lack of credit. I'm not poor by any standard, but I have an expensive wife, plenty of student loans, plus a giant mortgage and a condo association that loves special assessments. So, while I've got a nice income, I have a lot of expenses. Sometimes, I get hit with an unexpected expense that I don't have enough cash in the bank to cover, but, because I have tons of access to cheap credit, I've never been caught short. It seems like there's a huge business opportunity making credit available to the poor. Payday advances do it to some degree, but I've got to think there's a cheaper solution. I'm just not sure what it is.
ReplyJohn, you write the most interesting thoughtful articles on this site. I myself have just left the 'breadline level' of employment after 5 years of scraping to make ends meet. I dropped out of university in 2006 and proceeded to work s****y office temp and telephone jobs until I was recently (read: October) pushed up to middle management and starting making enough money to actually live off.
ReplyEverything you comment on in this article and in “5 Things Nobody Tells Your About Being Poor” rings true. The whole 'bean counting' thing is an obsession of mine and I check the 'Financisto' app on my phone at least 10 times a day just to ponder what’s in the bank. It doesn't matter that there's currently £3.01 in my current account, the balance will look very healthy when I’m paid tomorrow, and my savings account looks healthy. I still get cold sweats and my heart beat rises when I look at it. Of course, this is just an obsession from the days when I’d take my pay check and a ledger pad and see how close I can get to £0.00 without accounting for any fun.
Another aspect where you’re spot on with is the whole “charged by the bank for missing payments, which leads to more missed payments” circle of death you discuss in the earlier article. Less that a year ago, whilst being a minute cog in the same machine that I’m a slightly bigger, more financial stable cog in now, I missed a direct debit payment. I phoned the bank and begged and pleaded not to be charged, and they allowed me that courtesy, as long as I put the money in the bank the same day and the company who I owed could re-request the direct debit I’d be fine. So, I had to go down to the bank or face their wrath. On top of this, the company who I owed the money too had give me the product interest free, an offer they would revoke if they didn’t receive payment the same day. So I drove to the bank. Luckily I was already off work that day…because I was half way through my Uncle’s funeral. So after burying my virtual second father, I had to make a handy stop to the bank on the way to his wake. The product I had bought to put me in this debt? A pair of glasses. My first pair of glasses, prescribed after 5 years of staring at computer screens for minimum wage. How did I not have the money in the bank? I had bought £10 of petrol a few days earlier and hadn’t wrote it into my ledger as the a*****e behind me on the forecourt was honking his horn.
Yes. I’m bitter about that one.
Nevertheless, I’m out of the woods now, ever so grateful and want to spread the word on how not to fall into the same pitfalls as I did. It seems however, you’ve made a great start to this yourself.
Actually, I guess I must not be out of the pitfalls entirely just yet. My laptop charger went on fire whilst I was writing this. I’m not lying for dramatic effect. I was writing the section about my Uncle’s funeral and it started billowing black smoke.
Finishing before the end of the battery…
I wrote this on the wrong f*****g article. Ugh.
i dont think you did...either way, it was well written and thought out. hope things continue to look up for you.
As I was reading this I tough poor guy in all homonyms of the word.
ReplyThis hits home. However, I'm afraid to get any credit because after my mother died and my father got sick, they left me a couple million dollars in debt. And we were as poor as f**k growing up.
ReplyAll those little f*****g things always add up and f**k with you, and then a Snarg rapes your wallet. It NEVER f*****g ENDS!!!
I don't understand how any of this is anyone's fault but your own. Luckily, I educated myself and haven't had any of these problems. It is not the payday loan company's fault that you over extended yourself. It is your fault if you haven't worked to build up your credit. You only get "charged for using your own money" if you don't keep track of your expenses. And it isn't a charge for using your own money, it is a charge for the short term loan the bank is giving you. If you don't like it, you can cancel overdraft and your card will just be declined. So what about survival mode? Who cares? Life isn't that bad. What happened to personal responsibility?
Reply Hide All See All 8 RepliesThe point is that it doesn't matter how hard you try, tiny mistakes or things that aren't your fault appear from no-where to rape your fiances.
Can you take personal responsibility for leaking pipes ? Car breaking down ? Any unplanned emergency screws you HARD.
You can keep track of fiances as well as you like, if you don't have cash to deal with something critical breaking unexpectedly, you will end up getting slapped around by bank charged or loan repayments or more literally by bailiffs. Because money has to come from somewhere, but you don't have it.
Jesus f*****g christ, did you just not read the whole f*****g article ? Go f**k yourself retard.
Dick, didn't you even read the article? I hope you break your foot and have to pay for it.
For 'luckily, I educated myself', read 'Daddy did it'. For 'life isn't that bad', 'what happened to personal responsibility', and 'it is your own fault you havent worked to build up your credit', read 'Daddy did it'. For 'i dont understand how any of this is anyone's fault but your own', read 'Daddy, why are poor people talking on my internet?'. If what you have written is your honest opinion,not only do you clearly not understand basic economics, but you evidently have never had to actually work to get something. If you were, as you say, self-educated, you would grasp the concept that this article explains because you would remember the days you spent before you first went into university, or before you went to your cushy job, when you were being faced with the no transport/no work clothes/no money/no sustenance cycle.
I hate your face, and i don't even know what it looks like yet.
Congratulations fucko, how does it feel to be perfect?
That says a lot right there - "I haven't had any of these problems". Lucky you. Not everyone is so lucky. People act as though being poor is some kind of personal failing, or worse, a deserved punishment for irresponsible behaviour. It isn't that simple. I'm disabled and - through no fault of my own - can't work. I have always been meticulous with my finances (such as they are), but when your monthly income works out to about 500$, you can't even GET credit from most places, so building it up is simply not an option. And as for being "charged for using your own money" - whether or not you go into overdraft, most banks will charge service fees for things like cashing cheques, transfering money, processing debit transactions, issuing bank statements, etc. which are all just a part of daily life. And "survival mode" - if you were paying attention - isn't about happiness, which is a luxury. "Survival mode" is when you're pushed to a place where you have to watch what opportunities you might have had pass you by simply because you literally do not have the resources to take advantage of them. So maybe "life isn't that bad", but it isn't getting any better, either.
I do not have overdraft coverage on any of my cards. Nevertheless, I have discovered that many banks will cover ACH direct debits that overdraw the account, even when I have declined overdraft coverage on the account.
It makes me sad that this person will never see these replies :/
I'd like to say F*ck You to originaldavejam over there, the sexist m*f*.
What that samantha person said was stupid, but g*******t if yours isn't more retarded.
OWS
ReplyIs there any way we can make this required reading for Congress?
ReplyI'm not sure whether I was in the "working poor" class when unemployed, honestly, but it hit home. Really brilliant, and something that needed to be said. Thank you.
I was only allowed to "thumbs up" this comment once, and that saddens me. Also, can we get a lynch mob going for d******k Samantha up there?
You hit so much right on the head. Only you forgot the constant condensation from anyone not directly in your situation at the moment. What, you can't spend $200 on dinner and drinks tonight because your electric is about to get cut off? Why don't you just get another job that pays more? Why don't you just get a second job, it's not that hard, man.
Reply2x worse if that pal who's talking down to you was just as poor as you once, and had a dumb run of luck that put him into comfortable status. It's like they completely forget what it's like.
I guess survival mode covers the constant fear that if you get downsized, you'll be on the streets in two weeks as well.
LOL! Not to make light of your situation (I've been there, heck still am), but I got a chuckle out of "the constant condensation from anyone not directly in your situation". (DamnYouAutocorrect!) It _IS_ hard to get by with all those non-poor people dripping all over you! ;-)
This one needs to be dipped in bronze and prominently displayed in some sort of Hall of Fame.
ReplyI love how bitter he is.
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