Why you can't afford to be poor

The poor have to deal with more wastes of time, wastes of their own money, stress and exhaustion than those who are well off. A really good Washington Post story that we found at the Seattle Times, illustrates many of the ways that the poor 'pay' more than the comfortable.

In our snippet, writer DeNeen L. Brown shows us the added costs of laundry and establishing credit.

According to the U.S. Census Bureau, more than 37 million people live below the poverty line. The poor know these facts of life. These facts become their lives.

Time is money, they say, and the poor pay more in time, too.

If you are poor, you don't have the luxury of throwing a load into the washer and then taking your morning jog. You wait until Monday, when the laundromat is most likely to be empty, and you load a cart with laundry from four children and drag it to the corner.

"If I had my choice, I would have a washer and a dryer," Nya Oti, 37, said at a Washington, D.C., laundromat. The four loads will take the food-service worker about two hours.

The poor also pay more in hassle: calls from bill collectors, the landlord, the utility company. So they spend money on caller identification because it gives them peace of mind.

The rich have direct deposit for their paychecks. The poor have check-cashing and payday-loan joints, which cost time and money. Payday-loan companies say they are providing an essential service. Critics say these companies prey on people who are the most "economically vulnerable."

"As you've seen with the financial-services industry, if people can cut a profit, they do it," Blumenauer said. "The poor pay more for financial services. A lot of people who are 'unbanked' pay $3 for a money order to pay their electric bill. They pay a 2 percent check-cashing fee because they don't have bank services. The reasons? Part of it is lack of education. But part of it is because people target them. There is evidence that credit-card mills have recently started trolling for the poor. They are targeting the recently bankrupt."

An angry Lenwood Brooks walks out of a check-cashing place in Washington, D.C. "They charged me $15 to cash a $300 check," he says.

Why didn't he go to a bank? He says he lost his driver's license and now his regular bank "won't recognize me as a human. That's why I had to come here. It's a rip-off, but it's like a convenience store. You pay for the convenience."

Then there's credit. The poor don't have it. What they had was a place like First Cash Advance in Washington. Through bulletproof glass, a cashier explained what you needed to get an advance on your paycheck — a pay stub, a legitimate ID, a checkbook. This meant you're doing well enough to have a checking account, but you're still poor.

If you qualify, the fee for borrowing $300 is $46.50.

That was not for a year — it's for seven days, although terms can vary. In effect, the annual percentage rate on your $300 payday loan is 806 percent.