I used to believe that anyone could do what I did – retire early and live the life your soul aches to live. I stand by my assertion for the majority of you reading because I assume that you’re not living in poverty.
My sister and I used to play this game: if we suddenly found ourselves penniless and homeless, what could we do to claw our way up? It was all naïvely, unintentionally insulting. Our brainstorming included going to Sam’s Club for the free samples; twirling signs on busy street corners for stores going out of business; picking up dropped change outside drive-through windows and toll booths; walking to work while forgoing soda, cigarettes, romantic relationships, and children; and staying at the YMCA.
We patted ourselves on the backs and figured we’d be thrifty as hell and make our way up in the world by our hard work and our grit and our common freaking sense!
We then developed some empathy and more nuanced common sense and in the latest iteration of our game, we dismissed most of these ideas. You need a paid membership for Sam’s Club. Imitating a sign post in the hot sun sounds rather soul-crushing. I’m not sure how safe the YMCA would be, especially for a petite female. Hanging out on the highway looking for loose change is a stupid idea. I honestly can’t believe that suggestion even made the list.
I’m not going to pretend to understand the cigarette and soda habit, but I know we all need small pleasures, small escapes. My favorite argument – expecting people to forgo children — the whole driving force behind existence — is just not realistic.
People in poverty, by definition, don’t have enough money to live on. With so little cash, you have no margin for error. And everyone errs at some point or another. Everyone. That’s why most people in poverty remain in poverty. They’re human.
Mistakes cost money. If you don’t have the money to rectify a mistake, it can ruin your life.
It’s not a character failing to be poor; especially if you were born into a poor family. It’s simply not having enough hours in the day to work if you’re not making much per hour. It doesn’t take much money, but it takes some. Early retirement is a question of what percentage of your earnings you can save. If it’s 100%, congratulations, you’re now working because you like your job. If it’s always zero or close to zero percent, you’re in for a very stressful life.
I know I’m oversimplifying. Poverty has many many faces, but I do the math and wonder. Current minimum wage in the U.S. is $7.25/hour. If I worked 80 hours a week, I would earn $30,160 in a year (before Civilization takes his cut). $30k is more than I aim to live on in a year, but that’s if I worked every single week without ever getting sick or ever taking a vacation. Not to mention the logistics of working two or more jobs with commute time, unaccomodating employers, conflicting schedules and physical toll on the body.
That sounds exhausting. Always trying, but still never getting ahead. Another reason to understand romantic relationships for thriftiness sake – it’s two incomes instead of one. It’s help. It’s more hours in the day.
There’s a part of me that still wants to believe I could somehow get to early retirement no matter my circumstances, but the more I read about poverty, the more bummed I feel. Research shows that living in poverty changes the way your brain thinks. You can’t plan for what you want long term when you’re worried about making it to payday. Not being able to plan sounds like hell to me.
If you’re hungry, if you’re not sleeping because you’re working all the time, if you’re always in high-stress mode, you simply don’t have any thoughts to spare about your credit score. I’m still learning about life and I don’t have a solution to propose, but this bothers me. Financial literacy makes life so much easier and cheaper. Here’s a list I made.
How good credit and financial literacy make life easier and better and cheaper and happier
- Better interest rates on credit cards
- Better interest rates for mortgages
- Landlords prefer renters with good credit
- Employers prefer employees with good credit
- Payday loan shops with exorbitant, predatory interest rates aren’t needed ever
- Never pay check-cashing fees
- Or other bank fees
- Or late fees because you don’t have the money
- Rent-to-own stores are also never utilized
- Never pay interest (for the harder core)
- Pawn shops are only a curiosity
- Rent-to-own mortgages just leave you baffled. I am sad that’s a thing. Here’s a tip: if you have all the responsibility of ownership, but none of the benefits and all the responsibility of renting, but none of the perks, it’s a really really bad idea.
- Save money on shoes.
The shoe story is the crux of why poor people stay poor. Being poor is expensive.
“The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.
Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.
This was the Captain Samuel Vimes ‘Boots’ theory of socioeconomic unfairness.”
Argh. Like a pirate. Arrrgh. That’s my frustration sound.