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Poverty is expensive. I know this because I've been in a place where I have to decide whether to pay for electricity or food with my paycheque. But why is it expensive? Let's discuss this for a second. (Thread time!)
You had to take a few days off work because you were sick, and since paid sick days aren't offered at your work (and aren't legally required), you end up with less money this paycheque.
Because you were short this month, you can't make your $100 car insurance payment this pay, you get a $45 NSF fee from the bank, and likely another $25-50 from your insurance company for being late. So your $100 payment turns into $195 pretty quick.
Now your phone bill runs late because you had to cover the additional charges on your insurance. You pay the minimum to keep it connected, but the next month it catches up to you and they cancel your phone. It goes to collections and your credit rating goes to hell.
Your car breaks down, and you have no money to fix it, so you have to take out a payday loan because your credit is shot. They charge you $60 interest to borrow $300 to fix your car and you have to pay it back in 1 week. You can't, so that $60 charge keeps getting added each pay.
Since you can't pay that, it gets sent to collections, and now you can't get credit for anything. Your car is beyond repair, so now you have to go to a car loan company that charges crazy interest rates for your car. You end up paying $500 a month for a car that is 6 or 7 yrs old
Because of all of this, your hydro is past due and so is your gas. They cut you off for not paying the bill, and now you have to pay the past due balance for hundreds and a reconnection fee of $50+. Since you don't have the money, you take it out of rent.
Now you only have half the rent money this month. Your landlord issues you an eviction notice. You now have to take a day off work to go talk to the landlord and tenant board about why you shouldn't be evicted.
Now you can't make your car payment because you took a day off work, you can't pay rent, your credit is shot, and the payday loan company tried to take a payment out of your account 3 times, resulting in $135 in NSF fees.
You catch up on your rent, but your insurance gets cancelled for non-payment. Now, your insurance rates go up because of that non-payment.
So your car payment is an extra $300/mo. Your NSF fees are an extra $90/mo. At least one reconnect or late fee is $50/mo. Your payments to cover collections are $50/mo, and your insurance is an extra $50/mo. That's $540 extra month, and we haven't even scratched the surface.
This is all based on missing a few days at work. Imagine what a big expense would do when someone is living paycheque to paycheque. Remember that when someone is "poor". The difference between you and them might be a few days of missed work.
