I'm privileged to have never had to worry about this, growing up comfortably middle to upper middle class.
With that said, I have a perpetual point of confusion here, likely due to my own blindspots and something I don't want to ask in person because it's not nice: is it an issue of budgeting?
Take someone who makes $15/hr and someone who makes $16/hr. Both are poor. Both live paycheck to paycheck, have no savings, etc. But theoretically, couldn't the latter person live exactly like the first one, and save $2000/yr?
Or, consider the same person from one year to the next. Expenses are lumpy. They begin the year at $0 and they end the next year at $0. It seems... unbelievably coincidental, I guess?... that they happened to earn the exact amount of money they needed.
The second part is that I've heard it's expensive to be poor. You get crappy stuff that breaks and needs replacement more often. You can't afford the larger, cheaper-per-ounce item at the grocery store, so you're paying more for the smaller things. The flip side is that if that's true, it provides kind of a ramp out, since as you're able to save, you can use your money more efficiently and save more.
> Take someone who makes $15/hr and someone who makes $16/hr. Both are poor. Both live paycheck to paycheck, have no savings, etc. But theoretically, couldn't the latter person live exactly like the first one, and save $2000/yr?
Emergency expenses are generally not the same for different people
> Or, consider the same person from one year to the next. Expenses are lumpy. They begin the year at $0 and they end the next year at $0. It seems... unbelievably coincidental, I guess?... that they happened to earn the exact amount of money they needed.
If you need $x per year and only earn $x-y per year... you're going to end up with $0 at the end of the year and not have your needs met.
> The second part is that I've heard it's expensive to be poor. You get crappy stuff that breaks and needs replacement more often. You can't afford the larger, cheaper-per-ounce item at the grocery store, so you're paying more for the smaller things. The flip side is that if that's true, it provides kind of a ramp out, since as you're able to save, you can use your money more efficiently and save more.
Saving is difficult - as mentioned before, emergency expenses come up. And it's very hard to break that mindset ("I could buy this more expensive version but I need this money for other things too")
> They begin the year at $0 and they end the next year at $0.
Or they're dead.
If you save an extra $2000/year, what are you supposed to do with the money if you're always hungry, if you're always cold? I'm guessing you could buy food and clothes; you'd end up at $0, just slightly better off. If there's no safety net to rely on, you'd save to be able to face the next problem, and maybe pay it less with your health (which is a kind of invisible debt).
And that's even assuming there's some certain income you can rely on. In my case, I know that for the next few months, I'd at least get unemployment benefits if I lost my job. Not everyone get that, and if you don't, the income floor is $0 and it's way harder to budget.
Another aspect to consider is that maybe the case of a single person who would be in poverty throughout a long life is not representative of poverty. Some people get out of poverty, some fall into it, some die early from it. If we're considering a single person always starting at $0 and always ending up at $0, several years in a row, we already dismiss these nuances. I'm sure you can find such examples, someone who lived to be 80 with a constant wealth of $0, but how common are they really?
They didn't earn the exact amount of money they needed—they didn't have enough money to meet their expenses more likely. And likewise one therefore can't save and buy better stuff. And thus the cycle of poverty continues.
> they didn't have enough money to meet their expenses more likely
What does this mean, exactly? I think that's the core of my question, and something I don't understand since I lack the experience. If someone can live like this for, say, 10 years then in some sense it is meeting their expenses exactly.
I understand a situation of accumulating debt - that's a state that's not in equilibrium. But a lot of poor people can't really obtain credit, I believe.
With that said, I have a perpetual point of confusion here, likely due to my own blindspots and something I don't want to ask in person because it's not nice: is it an issue of budgeting?
Take someone who makes $15/hr and someone who makes $16/hr. Both are poor. Both live paycheck to paycheck, have no savings, etc. But theoretically, couldn't the latter person live exactly like the first one, and save $2000/yr?
Or, consider the same person from one year to the next. Expenses are lumpy. They begin the year at $0 and they end the next year at $0. It seems... unbelievably coincidental, I guess?... that they happened to earn the exact amount of money they needed.
The second part is that I've heard it's expensive to be poor. You get crappy stuff that breaks and needs replacement more often. You can't afford the larger, cheaper-per-ounce item at the grocery store, so you're paying more for the smaller things. The flip side is that if that's true, it provides kind of a ramp out, since as you're able to save, you can use your money more efficiently and save more.
Where am I going wrong in my thinking here?