We commonly associate being poor with low-paying jobs or a lack of opportunities, but sometimes poor people get or keep themselves that way by spending too much money on things that are unnecessary and sometimes even unwise or unhealthy.
These are things that wealthy people alike spend money on, but a key difference is that wealthier people have much more discretionary income. Thus, this type of spending doesn’t put them as much at risk of missing a credit card payment, not making the rent, etc.
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1. Unused Services and Subscriptions
People frequently pay money for things they don’t use much or at all because there was a free trial or low starter price. Good examples are magazine subscriptions and gym memberships.
2. Smoking and Vaping
While people of all income levels smoke and vape, it’s more prevalent among people below the poverty line. More than 25% of them smoke, compared to 12% for people above the poverty line. Due to taxes and raised prices largely meant to discourage use, smoking has become a very expensive habit.
3. Overspending on Travel
Travel is an escape, and everyone likes a taste of luxury. However, poor people often “treat” themselves to hotels and services that are well beyond their budgets. This lands them in debt or increases existing ones.
4. Fast Food/Junk Food
Many poor people live in “food deserts,” areas that lack grocery stores with nutritious foods. As a result, they eat disproportionate amounts of fast food and junk food (and most fast food is junk food), which wastes money and contributes to bad health outcomes.
5. Credit Card Purchases
Just about everyone uses credit cards, but poor people are more likely to amass high credit card debt. That and the interest that accumulated creates a burden they often can’t get out from under. It also leads to…
6. Impulse Spending
This is a spontaneous decision to buy something you don’t really need. Credit cards make it even easier since you don’t have to pay upfront. Impulse spending is often on food and drinks, low-quality items placed to catch your eye, and on unnecessary accessories.
7. Spending Beyond Means
Credit cards and impulse spending both contribute to many poor people spending beyond their means, which can lead to debt, repossessions, and evictions. Rich people rarely spend beyond their means due to having so much more in resources.
8. Fad Products and Diets
These things are usually junk or scams. People of any income status can be taken in by them and open their wallets for them, but because poor people have fewer resources, they’re more vulnerable to financial harm by this.
9. Lottery Tickets
Fair or unfair, rich people don’t need to buy lottery tickets. To poor and even middle-class people, lottery tickets are an easy way to get rich quickly, and stories of people winning massive jackpots only encourage this. However, the chances of winning big are ridiculously small, and poor people waste hundreds or thousands of dollars on lottery tickets.
10. Expensive Coffee
It can feel nice, and it’s even somewhat of a status symbol, to get Starbucks every day. Spending several dollars a day on coffee really adds up, and when you’re not earning much to begin with, it quietly takes a big bite out of your income. That’s income needed for rent, bills, health care, etc.
11. Expensive Cable Subscriptions
A lot of people, not just the poor, pay for expensive cable subscriptions most of them don’t need or get their money’s worth from. There are more economical options available, and the money saved can go towards more important things like rent and bills.
12. Bars and Pubs
It’s fun to end the workday over drinks with friends or go out in the evening, but it’s also really expensive. In addition to draining financial resources, it can also lead to alcohol abuse and driving while drunk. Saying not to go out isn’t fair, but advising moderation in frequency and amount is.
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This article was produced by Our Woven Journey. Featured Image Credit: Mindscape studio/Shutterstock