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You have quite likely heard this phrase before but probably never thought much about it. If this phrase has crossed your mind before, you’ll not be the first to think of it. Here’s the thing with wealth disparity: it has existed for many years and there are some common agreements to it.
That agreement is the fact that when you are poor, it gets more expensive for you. As opposed to when you are rich or have more money, you get to save more. Allow me to present to you some simple and straightforward explanations for this phrase.
You spend more on items
Before you jump at me, read this reasoning first. Many people think that there are poor people’s items that are a lot cheaper than their conventional counterparts. There are budget options for poorer people and I agree they exist.
However, have you ever thought if budget options will last for long? Most times it does not last very long. Take cell phones for example. An average lifespan of a good phone and above lasts at least 5 years to 6 years. Some may last up to 10 years, who knows.
Budget phones don’t usually last that long. Typically they will last 3 years at best. Sometimes they may last up to 5 years max but can’t really function as a proper phone. That means they have to replace their phones with another cheap phone after 3 years. Every 3 years they will keep changing their phones because their old phones cannot function normally anymore.
It does not just apply to electronic gadgets. The same thing can also be applied to many essentials they need to have in their everyday lives. When they keep replacing their cheap items with other cheap item, the costs add up. In the end, they spend more than they are able to save.
Poorer people spend on their needs first
When you do not have extra money on you, savings will be the last thing on your mind. For poorer people, their spending habits and approach to money are a lot different from what rich people perceive having money to be. Not sure if this made sense but here goes.
When you earn a small income, that income goes towards spending on your needs first. You will spend on the essentials first: food, lodgings, and (public) transportation. By the time you have spent on these essentials, you do not have much left for savings, insurance, or any other “necessities”. You won’t even have the money to spend on nice things.
As opposed to people who have more money, things are vastly different for them when it comes to money. By the time they pay off all basic essentials, it’s quite likely they still have quite a lot of money left. Even if it’s not “a lot of money left”, pretty sure they still have some leftover money on them.
It’s easier for poor people to fall into debt
This point may come across as judgmental. However, please read what I have to say first. When a poor person and a wealthier person fall into debt, it’s harder for the poorer person to climb out of the debt. It’s not impossible but it’s just that it takes them longer to get out of the debt they got into.
A wealthier person may find it easier to climb out of that debt as they quite likely have disposable money stashed away somewhere. They do have the money to pay off the debt. It may not be settling 100% of the debt but it’s still paying off the debt anyway.
A poorer person does not have disposable income stashed anywhere. Hence, it may take them longer to pay off that debt.
Bottom Line
With that few reasoning, it’s easy to see why poorer people’s demise may be bigger than it seems. On the surface level, it looks like their problems are simple and “easy to overcome”. However, that is not always the case as their problems, too, run deeper than what our eyes see.
It’s not to say rich people don’t have problems. Rich people do have rich people problems we shouldn’t ignore either. Just saying that each income bracket has its own problems to face, that’s all.
Lydia is a content writer under Headliner by Newswav, a programme where content creators get to tell their unique stories through articles and at the same time monetize their content within the Newswav app.
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