Saving can be hard. However, there is a cost to being poor and those poorly thought out ‘quick saves’ can end up costing you in the long run. Things like paying attention to flat prices, instead of price per ounce or actual value will cost big in the long-run. There’s a lot of things people do to try and make their homes more cost efficient (which end up being crazy) and ways people try to skirt around the cost of survival that can bite them in the butt. There are ways you can avoid what we will refer to in this article as “poor people problems.”
How to Avoid ‘Poor People Problems’
If you’re like many people, you’ve probably seen the show Extreme Cheapskates. It’s a reality show about people who will go above and beyond the extra mile to be economical. The show takes a moment to describe the person’s complex solution that takes time out of their day and how much it’s going to save them. Then the show freeze-frames and breaks down how their complex cheapskate solution is actually costing them money. There are many “real life” situations like this. Many people often think they are being thrifty, tricky or get so wrapped up in saving money that they are actually losing out on cash. There is a point where being cheap can actually hurt your finances.
Buy Things in Bulk
There are a number of people that say buying things in bulk will not help you save money. However, buying things in bulk will actually help you avoid “poor people problems.” There is something many people refer to as the “poor people tax.” This means that you don’t have the personal income to make purchases that will save you money in the long run. You might have gone to your local Costco and purchased enough toilet paper to last you and your family until your untimely death. Even then, they could wrap your corpse like a mummy and toilet paper the street in memoriam. But poor people often don’t have the starting capital to purchase in bulk, they may not even be able to get to those bulk super stores because of public transit limitations. Let alone buying and transporting those cheaper bulk goods to their home, most people don’t even have five hundred bucks sitting around to make a huge purchase (or even the place to store a lifetime of toilet paper).
Just going to the grocery store rather than the corner shop, or buying beans and rice in bulk can save you big time. You don’t need a car to buy foods with a long shelf life in bulk, and twenty pounds of bulk beans (a near super food!) is only fifteen bucks. If you on’t have internet to make such complex orders the library has free internet and computers to use, there’s probably one near you! Buying in bulk, healthy, sustainable food, that lasts for a long time (like brown rice) is one way to save on food costs and avoid the “poor people” tax.
Avoid Poor People Problems: Pay Off Debt
Another way to get ahead is to pay off any debts as quickly as possible. Even something seemingly small and ignorable like student loan debt builds up really quickly. It’s really smart to jump on any debt before you end up paying on it for years. The average student in 2015 graduated with $35,000 in loans. That’s more than the average yearly wage of a college aged American. It will take a while to pay that off.
Debt is a large contributor to the “poor people tax” referenced above. It can account for $800-900 dollars a year for a $22K-a-year worker trying to avoid the bank because of previous debts and that’s not even the cost of paying on debt. The average American family pays $6,000 in interest every year. Six. Grand. That’s so much money to be just spent on interest! Opting out of this as quickly as possible could mean a five day vacation to Disneyland for you, your significant other and your two children. The cost of being poor isn’t just in inaccessible cheap goods. It’s in bank availability. It’s in job insecurity, higher potential for property damage and just the cost of paying on interest.
Lower Housing Costs
Housing is one of the most important resources for survival. Trying to save on your housing is reasonable, but taking it to an extreme will cost you more in the long-run. Even something small, like a remodel could end up running up costs when the sink is a little too big for the countertops. Taking advice (or advantage of low-cost designers) might seem time taking, or counter-intuitive to your thrifty nature, but will save in the long run. Cheap roofs leak, but the lowest cost roof for the best quality (even if it is an ugly metal one) will save you a lot of money. And that’s advice you probably have to ask for. Even small fixes like your bathroom sink or a belt replacement on the car, are worth it to take it to a professional. Sure you could figure it out, but unless you’re a trained mechanic, you’re probably going to break it a thousand different ways from Sunday.
These three areas are only three of many ways you can avoid “poor people problems.” Although becoming poor or facing financial hardship can be inevitable, focusing on saving money in small areas can help you in the long run. Not only will you be prepared if financial hardship comes your way but you will also have experience cutting costs if you’re ever forced to in the future.
How do you use being cheap or cutting costs to what the author refers to as “poor people problems?”