Spend less than you earn, preserve your money, andpoof!your financial problems are solved.
If only it were this easy.
For example, here are a few expenses that actually cost more for low-income individuals.
Astudy from the University of Michigantracked the toilet paper purchases of over 100,000 American households for seven years.
They also bought more rolls on average compared to low income households.
In other words, as the studys title points out,Frugality is Hard to Afford.
Wevediscussed this phenomenon in detail, too.
Its not just toilet paper.
When youre poor, its not easy to buy stuff in bulk or buy high-quality items that will last.
The CFA looked for quotes from five of the largest insurance carriers in the United States.
A College Education
This expense might come as a surprise.
The general assumption is that the poorer you are, the more grants and scholarships you qualify for.
Basically, those colleges offer prospective low income students tuition packages that dont really meet their financial needs.
They underfund those students and save the aid for wealthier students who can afford to pay full tuition rates.
In basic terms, this practice makes it more expensive for poor people to go to college.
Theyll get aid, but its not enough.
Meanwhile, wealthier students get more aid than they actually need.
Theyreeasy enough to get around, thoughif you have the money.
For example, Bank of Americas regular checking accountcomes with a $14 monthly maintenance fee.
You canalso get around itif you sign up for their credit card and qualify for a certain tier.
This might be a decent option if you have solid credit.
Some banks let you get around it if you have a direct deposit in a certain amount.
Many others find their existing bank accounts closed because the minimum balance was too low.
Anyone who has ever struggled with poverty knows how extremely expensive it is to be poor.
-James Baldwin
Its easy to judge other peoples choices and simplify their solutionsjustdontfall into a debt trap, right?
Youd be stupid to take out a payday loan.
The problem is, there are limited alternatives for a lot of people.
