Why poor people make bad decisions

[Clueless Git]

Apart from a few years ago when I lost my job and we struggled for quite a while we have managed to dig ourselves out of debt and are now comfortable, although living fairly frugally. I think our debt (which was at one point about £150K plus in total) was mainly due to bad decisions, as well as external factors like high house prices. We had store cards, credit cards and I had some student debt and we only paid the minimum charges and if I could go back in time and punch us in the face I would. From my own experience I know there is a massive psychological difference between living frugally through choice and living frugally because it is the only choice you have.

If it's any consolation ...

Been there, seen it, done it, would like to go back in time and punch myself in the face too.

 

[das_nut]

That some low income people buy trappings of the good life which they cannot really afford is not nonsense though.

Neither is the idea that some middle class people buy trappings of the good life that they can't afford.

 

[Clueless Git]

Neither is the idea that some middle class people buy trappings of the good life that they can't afford.

True True True ... BUT!

That just puts us straight back to ...

And bad debt (rarely a result of good decision making?) makes you poor which puts us right back in the loop of, is it either that:

1. Poor people make bad decisions

Or ...

2. Bad decisions make/keep people poor

Did you have a particular fondness for merry-go-rounds when you was a young-un, Das?

 

[Wolfie]

Indeed it is.

That some low income people buy trappings of the good life which they cannot really afford is not nonsense though.

Thank you for understanding what I was saying when no one else can seem to.

The poor on the dole should not be living better than the poor who don't depend on the government. And something needs to be done about those who make living off others a way of life, passing it from generation to generation.

 

[Wolfie]

Back to the woman with 17 kids and a Coach bag on food stamps, eh?

Actually the last one I saw with an expensive bag and phone only had 5 kids, not 17. Well, 4 and 1 on the way.

 

[das_nut]

Did you have a particular fondness for merry-go-rounds when you was a young-un, Das?

I'm just fascinated about how it appears to be popular to judge the poor on their financial decisions, but not judge the middle class.

Why is that?

 

[das_nut]

Actually the last one I saw with an expensive bag and phone only had 5 kids, not 17. Well, 4 and 1 on the way.

So you saw a woman with what appeared to be an expensive bag?

How could you tell she was on government aid? Was the bag a knock-off or the real deal? Do you know how much she paid for it or where she got it?

 

[Wolfie]

I'm just fascinated about how it appears to be popular to judge the poor on their financial decisions, but not judge the middle class.

Why is that?

Because the middle class doesn't buy junk food and pay rent with the taxpayers' donations?

 

[Wolfie]

So you saw a woman with what appeared to be an expensive bag?

How could you tell she was on government aid? Was the bag a knock-off or the real deal? Do you know how much she paid for it or where she got it?

Not real hard to tell if someone has a food stamp card if you are right behind them. The bag did appear to be the real deal but you got me there, maybe she did get it from a secondhand shop. You still will not convince me that entitlement abuse isn't rampant, because I know way too many people who do it. I grew up around it and live around it now. And yes, it pisses me off. When my job was outsourced a couple years back, there was zero help for those of us who had worked and paid in all our lives but hadn't bred. Tell me how that's fair. Pay into social programs for years but you can't get a hand if you need it. If beans and rice was good enough for me and good enough for kazyqeen's mom, then it's good enough for those on the dole. If a Walmart bag is good enough for me, it's good enough for anyone down on their luck. And I agree a cell phone anymore is a necessity especially if you don't have a landline. A Smartphone, however, is not.

 

[Moll Flanders]

The benefit/welfare system will always have people who try to defraud and get something for nothing. I think poverty would be tackled better by the government (in the UK) if people could have a proper and decent minimum wage without government handouts. I have known people who really milk the benefits system, usually by hiding that they are in fact working cash in hand or that they are getting money from "absent" fathers or illegally subletting their properties while still claiming benefit money. It's aggravating and I can see why people get annoyed, just like it's irritating when some richer people use tax loopholes to get more money. Some people are just selfish idiots and have no social responsibility.

 

[das_nut]

When my job was outsourced a couple years back, there was zero help for those of us who had worked and paid in all our lives but hadn't bred. Tell me how that's fair.

Your state sucks. I can even get help for being unemployed - it's easy, I file an unemployment insurance claim and tada - money each week!

Because the middle class doesn't buy junk food and pay rent with the taxpayers' donations?

They don't? What about the subsidies they get? They are subsidized for having children (child tax credit), subsidized for housing (mortgage interest deduction), subsidized for higher education (deductions for student loan interest, federal grants), subsidized for even transportation (gas tax not covering the costs of the road system in the US).

 

[Clueless Git]

I'm just fascinated about how it appears to be popular to judge the poor on their financial decisions, but not judge the middle class.

Why is that?

It's because the middle classes are not poor Das.

When a middle class person becomes poor they are then poor not middle class.

Would it appease you if we changed the topic to "why the poor (and people who were middle class but are now poor) make bad decisions?

 

[Clueless Git]

The poor on the dole should not be living better than the poor who don't depend on the government.

If a dolite actualy manages that then, purely financialy, it is a good decision, or decisions, they made.

If your working your butt off for less than you can get for sitting on it then, purely financialy, that decision is bad.

Purely financialy any decision(s) that make you better off have to count as good and any decision(s) that make you worse off have to count as bad.

No idea what my point is there ...

Think I may have gone a bit 'punchie' from repeatedly restating the blindingly, bleedin' obvious.

 

[Wolfie]

Your state sucks. I can even get help for being unemployed - it's easy, I file an unemployment insurance claim and tada - money each week!



They don't? What about the subsidies they get? They are subsidized for having children (child tax credit), subsidized for housing (mortgage interest deduction), subsidized for higher education (deductions for student loan interest, federal grants), subsidized for even transportation (gas tax not covering the costs of the road system in the US).

And can you pay your bills on that unemployment? Here, and I realize that's not the case in every state, unemployment is also based on, you guessed it, how many kids you have. With no kids, there is no Medicaid, no food stamps, no assistance with housing, and no having school paid for. Getting let go threw all of us for a loop, but the single moms with kids were left in a much better position than anyone else. Well, other than those whose spouses made good money.

Anyway, I got lucky, if you can call it that. I found another job before having to worry about how to make it on a pathetic unemployment check. I don't make as much as I once did, but enough that I can once again support the entitlement programs that some count on for life!

 

[Wolfie]

Your state sucks. I can even get help for being unemployed - it's easy, I file an unemployment insurance claim and tada - money each week!



They don't? What about the subsidies they get? They are subsidized for having children (child tax credit), subsidized for housing (mortgage interest deduction), subsidized for higher education (deductions for student loan interest, federal grants), subsidized for even transportation (gas tax not covering the costs of the road system in the US).

Everyone gets subsidies for having kids regardless of income. Don't even get me started on that. Or at least wait until my pc isn't acting up so I don't have to reboot every 15 minutes. And I'd be willing to bet paying someone's rent each month takes more money than mortgage interest deduction, especially since they've reduced that now. At least here. I'm not sure if that's run on a state by state basis or not. And again, it's easier to get your education totally paid for if you are single plus kids. Who cares about student loan interest deduction? You have to be able to afford a student loan first.

The will-not-work-other-than-to-pop-out-kids get supported, the rich have their loopholes and have it made, and everyone else gets screwed.

 

[Spang]

So, when poor people are given nice things as gifts from real people who have jobs or whatever, are they supposed to not be seen with such things in public? What if they won the nice thing?

Or maybe we should stop being critical of poor people and squash this idea that they live the good life simply because they have a purse you don't think they should have.

Posted from a BlackBerry that I won at work, that at the time was top-of-the-line, and I was, and still am, poor. Also, I have a MacBook Pro.

 

[das_nut]

And can you pay your bills on that unemployment? Here, and I realize that's not the case in every state, unemployment is also based on, you guessed it, how many kids you have. With no kids, there is no Medicaid, no food stamps, no assistance with housing, and no having school paid for. Getting let go threw all of us for a loop, but the single moms with kids were left in a much better position than anyone else. Well, other than those whose spouses made good money.

If I really had to do it, I could pay my bills on unemployment.

It's called living below my means.

But living below my means also results in savings, so I'm not feeling any squeeze yet.

Everyone gets subsidies for having kids regardless of income. Don't even get me started on that.

Child tax credit has a phase out income.

And I'd be willing to bet paying someone's rent each month takes more money than mortgage interest deduction, especially since they've reduced that now.

Of course - renting tends to be more expensive than owning in the long run. Yet it's often the non-elderly poor who are renters, while the middle class are more frequently home-owners. It's a subsidy on the rest of society to support the middle class.

At least here. I'm not sure if that's run on a state by state basis or not. And again, it's easier to get your education totally paid for if you are single plus kids. Who cares about student loan interest deduction? You have to be able to afford a student loan first.

Student loan payments are deferred until you get out of college. They even have programs to defer payments for time of hardship.

The will-not-work-other-than-to-pop-out-kids get supported, the rich have their loopholes and have it made, and everyone else gets screwed.

It seems that everyone is on the dole, one way or another.

Let's criticize everyone's spending.

 

[das_nut]

It's because the middle classes are not poor Das.

When a middle class person becomes poor they are then poor not middle class.

Would it appease you if we changed the topic to "why the poor (and people who were middle class but are now poor) make bad decisions?

As I said before, I'm continually fascinated by why we are so willing to judge one class of people who benefit from the government, yet don't judge similar behavior in another class of people who also benefit from the government.

 

[AeryFairy]

It's because the middle classes are not poor Das.

When a middle class person becomes poor they are then poor not middle class.

Would it appease you if we changed the topic to "why the poor (and people who were middle class but are now poor) make bad decisions?

There are people with lots of money who would still be considered working class, people with considerable debt who would still be considered upper class, and so on. Social class has a lot to do with who your parents are, where you live, your educational background, your job, who you married... so, it would be perfectly feasible for someone to be middle class and poor, as poor is a financial status, not a social one.

 

[nigel1]

There are people with lots of money who would still be considered working class, people with considerable debt who would still be considered upper class, and so on. Social class has a lot to do with who your parents are, where you live, your educational background, your job, who you married... so, it would be perfectly feasible for someone to be middle class and poor, as poor is a financial status, not a social one.

This is a very important distinction. "Poor people" with family who are better off than them (or even just grounded and existing) can more easily take risks like going after a new job that pays better than the current one at Walmart because, whether they want to admit it or not, they do have a little bit more of a support structure than the other poor people who don't have that kind of bailout in times of disaster. They are also likely more informed on how to go about helping themselves.

Das' repeated question is a good one, but to me the answer is obvious. The issue of debt among the poor who are unable to manage that debt is far different from one of debt that is well-managed among the middle class. I am middle-class and am well in the black but have a considerable mortgage at around 3% and student loans under 2%. Paying them off would be foolish considering the return I get on my savings and opportunity to build capital with the money I have. That's a far cry from a poor person borrowing beyond his means out of desperation. If we're talking about financial irresponsibility, I disagree with the claim that the middle class get little criticism. When the housing market tanked and the overextended middle-class homeowners lost their houses there was a lot of collective self-pity but I think they got their share of scrutiny.