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The High Cost of Being Poor

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Table of Contents  
  1. Time Is Money
  2. Poor Taxes

Being poor comes with special costs that higher earning people often don’t face. If you’re going to be poor in America, you better have money.

The poor pay a premium in stress, time, and of course money, every day.  From harassing phone calls to long lines, to food costs, being poor is almost like being constantly punished.


Everyone faces stress and in some situations, short-term stress is beneficial.  When stress is chronic, grinding you down every day, it is damaging to your health, both physical and mental.  Being poor can mean a constant, unrelenting state of stress.

Unreliable work schedule

Do you work a typical work day, 9-5 or so, Monday through Friday every week?  Many of us who sit behind a desk do.  You may have to come in early, stay late, and work the occasional weekend sometimes, but for the most part, you know what your schedule will be.

And when your work schedule is consistent, it makes it easier to schedule other things in your life; medical appointments, meetings with friends, maybe even a second job if you’re in need of some extra cash.

If your schedule is not consistent, it makes all of those things difficult. An uncertain schedule makes it virtually impossible to go to school like the bootstrap conservatives tell you to do if you don’t want to be stuck in low wage work your whole life.

Child care is another big problem when your work schedule is inconsistent.  If you don’t know your schedule week to week, imagine how hard it would be to get your kid to and from school, to arrange after school care or day care.

For a lot of low wage workers, there is no certainty week to week when they will be working, and maybe worse, how many hours they will get.  Have you ever tried to do a budget when you aren’t sure of how much money will be coming in?

This has often been a big complaint against Walmart.  When they announced they would raise their starting wage in February, they promised to improve the consistency of schedules and hours as well.  Starbucks has committed to addressing this issue as well after being shamed by a New York Times article.

Harassing Phone Calls

According to The Urban Institute, one third of American adults have a debt in collections. Because I was stupid and irresponsible with credit cards when I was in college, I have been on the receiving end of these calls.

This was before cell phones and caller ID were common so the calls were harder to avoid then they are now.  Every time the phone rings, you get that adrenaline rush of pure dread.  Once you decide to try to take control of the situation and answer the calls, you never know if you are going to get someone on the other end who is helpful or nasty.

There are protections in place now to stop the sometimes abusive nature of these calls but not everyone adheres to the law.  And many of debt collections companies get away with it because so few consumers know what rights they have when dealing with these calls.

Imagine coming home from a long day at work, maybe a long commute.  You just want to get yourself and your family ready to do it again tomorrow and your fielding or dodging phone calls looking for money you probably don’t have otherwise you’d have paid the bill.

Constant Set Backs

When you’re among the working poor, you have to do nearly everything right to just survive.  You have to do everything perfectly to get ahead.  Even if you can manage that, you also need perfect luck to keep the whole house of cards from tumbling down.

If you live in a place without public transportation, or sporadic transport, you’ll need a car to get to work.  And you need a car that is reliable.  If the car breaks down and you can’t afford to fix it immediately, you may miss days of work. Hopefully you live near enough to walk or bike or have a willing chauffeur. No money to fix the car, no paid time off, and now a smaller or no paycheck.

Maybe you have a physically demanding job.  You don’t have to suffer an on the job injury to get worn down, to be in real pain or to be so exhausted, your body is too weak to fight off a nasty cold or bought of flu.  More missed work, less earned money.

It’s finally tax return time and you’re getting a nice one this year.  You know that you should use that money to pay bills and clear some debt.  But it’s your kid’s birthday.  He’s a good kid, maybe old enough to sense the situation his family lives in so doesn’t ask for much.

So just this once, you’d like to be able to give him something you know he really wants for his birthday.  That is not a crime, that is something all good parents want to be able to do for their kids.  So you splurge on him and you’re glad you did, that you could, even if you really couldn’t.

One step forward and two steps back, rinse and repeat.  It’s so demoralizing to do the right thing, what American society, who loves a Horatio Alger story, tells us anyone can do to get ahead, and still be stuck.

Constant Fear

The worst part of being part of the working poor must surely be the constant fear.  Sometimes it’s acute and sometimes it’s low grade, like an annoying background noise you can’t quite ignore.  Whatever level the fear may be registering at in any given moment, it’s always there.

Fear because you don’t live in a safe neighborhood.  Fear that an illness could cause you to lose hours at work.  Fear that your kids go to substandard schools and you can’t be there to supervise them between the time they get out of school and you get home from work.

Fear that you might lose your job due to cutbacks because low wage workers are pretty expendable in America.  They’ll sack you and squeeze more work out of your co-workers. Good for the bottom line.

You know that sense of relief you get when something you were afraid of doing or happening is resolved?  Either it wasn’t as bad as you had feared or it never actually happened.  The working poor never feel that sense of relief, just a constant sense of dread, waiting for the Sword of Damocles to come swiftly down.

Time Is Money

One of the best ways to save money is to live close to your place of work.  I have always been lucky enough to live within walking distance of my job ever since I’ve lived in New York City.  Saves me money, time, and aggravation.


In big urban areas, housing near the city center where many jobs are, is prohibitively expensive.  If you’re on minimum wage at your job in Manhattan or San Francisco or Boston, there is little chance that your are living close enough to walk or even bike to your job.

The average American commutes about 25 minutes a day, each way. 10.8 million Americans commute more than an hour each way, and 600,000 have “super commutes,” 90 minutes or more each way.

Surely the king of the super commuters is James Robertson, the Detroit man whose commute to work includes 21 miles of walking.  He has never missed a day of work.  In fact, his boss sets the attendance standard for the rest of the employees by James.  This acknowledgement seeming didn’t move the boss to do anything to help James, raise his pay from $10.55 an hour, help arrange some kind of alternative means for him to get to work, or even offer a lift himself.

Fortunately, regular folks stepped up to help when greedy corporate overlords failed to, as they so often do.  A local college student started a GoFundMe for James which has raised over $300,000.  This is what they mean when they say, “Detroit Hustles Harder.” You can say what you like about the Motor City, and everyone has, but the people there have heart.  Detroit, a city I love, takes a lot of flack so I wanted to take the opportunity to highlight something positive about the place.

Much like the uncertain schedule, a long commute prevents the working poor from doing a lot of other things.  Working a second job, helping kids with homework, making a healthy dinner.

If your day starts at 6:00 am and doesn’t end until 8:00 pm or later, you probably don’t feel like doing much other than showering and hitting the sack.


Chores, we all have them, even the richest among us.  The difference is, some people can outsource them.  I have a cleaning lady once a week which frees up two hours for me to work.  That is a good trade off for me.

For the working poor, that’s probably not an option.  But it has to get done, so add that to the list of things to do.

Laundry can be another time killer.  Most apartments in New York City don’t have washers and dryers in them.  Luckily, I live in a big building with lots of washers and dryers.  I can put my clothes in to wash and go for a run.  Come home, put them in the dryer and get showered and dressed.

If I didn’t have a laundry room, I would send it out.  Leave it at the front desk, the launderer picks it up and drops it off hours later, clean and folded.  The point is, I don’t have to spend two hours babysitting my clothes.  No one in my building is going to steal them.

If you don’t have laundry facilities and can’t afford to send it out, you have to go to the laundromat.  In some cities, finding a laundromat is becoming harder.  So while there used to be one down the block, now maybe you have to take public transport to and from a further afield one and sit with it for two hours.


Waiting on line (in line in most of the US) is something most people hate.  But most of us probably don’t have to wait in a really long line with any great regularity.  Not true if you’re poor.

There is a low cost health clinic near me.  Every morning there is a line out the door, nearly to the corner of the block.  I don’t know how long that line translates into wait time to see a doctor but it must be at least an hour.

If you don’t have insurance, you may go to the ER when you’re sick.  Wait time averages to be seen in the ER range from a low of 15 minutes in Wyoming to 53 minutes in Washington, DC.  This seems crazy low to me, even the DC time. The one time I have ever been in an ER was with a friend with a broken hand.  We waited well over two hours.

Unless you only get sick during convenient times, or the clinic you use has non-banker’s hours, that means time off work for which your likely aren’t paid, if you get sick or need to see a doctor.

Poor Taxes

There are special costs that the poor incur that the rest of us don’t.  A lot of the tips and tricks we use to save money are not available to the poor.


Everyone is familiar with the concept of paying deposits when renting a new apartment, usually the first and last month’s rent, although it can be more if your credit isn’t great.  But that isn’t the only time a deposit may be required.

If you either have poor or no credit or have had a utility shut off in the past, you may have to pay a deposit to open a utility account in a new place.  So on top of what is probably a few thousand dollars in rental deposits, you may face a few hundred more to get the lights or other utilities turned on.


Late payment fees can also hit the poor hard.  If you have to choose between buying groceries for the week and paying your rent on time, it’s an easy choice to make.  You won’t get evicted for a late payment.  But you will be charged a late fee.

Banks love to charge all kinds of fees too.  A fee if you don’t keep a certain amount in the account, a fee if you overdraw, a fee for a bounced check.  All that adds up for anyone already struggling.

Rent To Own

Rent to own is one of the worst things you can do with your money.  You end up paying much more for a piece of furniture or computer than you would if you were able to buy it outright, sometimes two or three times the retail price.  The appeal is the very low monthly payment.  Maybe you can’t afford a $1500 refrigerator, but you can afford $30 a month!  If you don’t have $1500 and need a fridge, which we all do, you’re going to pay through the nose.

Buy In Bulk

If you want to save some money on groceries, buying in bulk is a great way to do it.  Head to Costco and stock up.  While it isn’t completely necessary, it is helpful to have a car in order to bring your big packages of chicken breasts and dozens of rolls of paper towels home.  It’s a hassle to bring regular sized groceries on public transport, never mind the massive quantities of stuff you can buy at a warehouse store.

And if you have a car, you’ll still need a place to store all that stuff.  If you live in the suburbs maybe you have a nice, big chest freezer in your garage to store all that chicken and an attic for all the paper towels.

If you are living in a small, crowded, inner city apartment, none of those things may be available to you.  And even if they were, you don’t always have the cash to take advantage of a good deal.  Yes it’s cheaper to buy twelve rolls of paper towels than one but if you don’t have the money, you buy one roll at a higher price.

Quality Over Quantity

Vimes theory of boots is similar to the buying in bulk dilemma.  The character, Samuel Vimes from Terry Pratchett’s novel Men at Arms, theorizes that the rich are rich because they spend less money.

Boots were the example he used.  The rich could afford to buy well made boots that would last for years.  The poor had to make do with the poorly made boots that they could afford at the moment and would have to be replaced often.  Calculated out, the rich spent less on boots because they could afford quality.

This holds true for nearly all consumer goods.  That’s why we have the saying, “Quality over quantity,” and there are sources on the internet like Buy It For Life. Buying well made things that last is cheaper in the long run.  But the long run is a luxury lots of people can’t afford.

It costs a lot in America to be poor.  Time, hassle, money, mental and physical health.  Not everyone is born with the same opportunities and some people pay their whole lives because of it.


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Candice Elliott - Senior Editor Candice Elliott is a substantial contributor to Listen Money Matters. She has been a personal finance writer since 2013 and has written extensively on student loan debt, investing, and credit. She has successfully navigated these areas in her own life and knows how to help others do the same. Candice has answered thousands of questions from the LMM community and spent countless hours doing research for hundreds of personal finance articles. She happily calls New Orleans, Louisiana home-the most fun city in the world.

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