The Poverty Cycle
Challenges of the Working Poor
I am a bankrupt.
I am the bogeyman that young bankers are warned about, the ones that you don’t allow to have accounts with your bank.
I used to have plenty of bank accounts, with plenty of money in them. I lost everything when we moved to Costa Rica, but I maintained one business checking account the whole time. Since it is in the name of my business, and not my own, it has been preserved from the claws of collectors and the garnishment of the government.
Nonetheless, I had a bookkeeping error, and I was heavily penalized for it.
I bought coffee with the debit card attached to this account, and I wasn’t watching my numbers very closely. This two dollar transaction brought my balance below zero, which fined me with a $36 fee. Two other transactions were already in process, and although there were enough funds to cover them in the account, by some creative account juggling the bank can plausibly claim that my one bookeeping error extends to these two other charges, bringing my fees over $100.
If I want to use a bank account, I have to pay a bank more money than it takes to fill my gas tank, and I can’t even do that right now.
Overdraft fees are a tax on poverty.
When you have money, and there is plenty to go around, you can pad your accounts, and protect yourself from having this sort of thing happen.
It is cruel that when you are the shortest on funds, you are most vulnerable to these exorbitant fees, which significantly reduce the likelihood that you can get back on track.
The Cycle of Poverty Fees
By using reporting agencies like Equifax, banks have unionized against consumers. If you overdraw an account with one bank, the other banks will stand in solidarity, refusing to give you any sort of account until you pay your debt with the other banks you owe money to.
It doesn’t matter if the fees were kind of bogus; you pay, or you don’t play.
Our financial system impedes the attempts of the working poor to get on their financial feet.
And I’m sorry to say, this does make sense. After all, businesses are in business to make profit, and more profit is to be had by serving the needs of the wealthy. People like me are not easy to make money from, because we have so little.
But our system should not encourage such discrimination.
Banks do not deserve to fleece the poorest people for errors with their accounting, especially after their own actions nearly crashed the world economy a few years ago. It disgusts me, and makes it more likely I will say screw it and never pay it, further crippling my already damaged credit.
When you are the Working Poor, who cares? You can bust your ass, work all the time, and still end up paying more to everyone else than you get to keep for yourself.
My life is a lot like the Magic Bus.
This big conversion van brings smiles to so many people as we pass them by.
We regularly get compliments from people on the street, people who marvel at the fun adventure this looks like.
Seeing the Magic Bus makes people happy, and I’m glad for that.
But I’ll tell you a secret: it’s really uncomfortable to go on an adventure, without the financial means to do it well.
The inside of the Magic Bus is falling apart. There is no bed we can sleep on, only a moldy piece of foam that is soaking wet from the leaks in the ceiling. The vehicle has no heat, making wet winter driving more like a crazy form of off-road tobogganing. One of the headlights is out, the radiator is leaking, and there is a huge crack in the windshield.
The bright yellow paint job makes it look like a fun ride from the outside; just like my adventures look like an exciting way to live life.
My big, ridiculous car looks like a jolly good time, but it’s cold, and clunky, and breaking down. I am glad that I can bring a momentary dream to passersby, but I do it at the price of my own comfort, and that of my family.
Our adventures are a constant game of deferment, putting off any expense we can in favor of squeaking by with the barest level of survival.
I’d like to live the adventure of this life well, but I’m the Working Poor.
I can’t spend thousands of dollars upgrading the Magic Bus when I can’t even fill the gas tank.
And before I can do that, I have to pay the bank first.
The masters of finance should not be at the front of the line for the limited funds available to the Working Poor. But, the only other choice for me is cash-only destitution. The banks have blackballed me, and I can’t get another bank account.
Longshots Don’t Pay Off
Or if they do, it’s really, really rare.
I had an ace in the hole for being financially strapped. I have managed to preserve, out of the chaos in my financial life, one gas card. It has a $0 balance on it. I’ve been saving it for a rainy day — like the day after moving into a new place, when the cash I have can be counted in one meager stack.
I was ready to use my precious gas card to fill up our tank, and postpone paying it for a month, while we recover from the massive expenses of first month’s, last month’s, and deposit. I found out at the gas station that the card expired last month. Ordering a new one will take 7-10 business days.
No ace in the hole for me. I put my last twenty bucks in the tank, and hoped it was enough to get my family home.
It was, just barely. Now I keep my van parked until I can find some funds.
Eyes on the Prize
I was really hoping that another longshot would pay off, and I could splurge on socks for my kids and a dish rack for my new house.
It was a spectacularly bad idea, and I though I had a good shot at taking the prize. If I won, we would have enough money to finance our move into a new house, and know I would make rent next month.
But I didn’t win. This guy did.
If I had won this prize, then I would have been able to buy mattresses, and sheets, and a dining room table.
Instead, I’m trying to figure out how I can get enough cash to pay a bank a penalty fee for being a bad bookkeeper.
My business isn’t profitable enough to support my family. My longshots have failed. I’m unable to hold onto money for long enough to keep it, because I owe it to so many others.
For the short term, I’m swallowing my pride, and asking for donations.
For the long term, I’m following the advice of wiser men than I, and learning how to Get Rich Slowly.
With luck, I can escape the cycle of poverty someday. I’ve been struggling financially for a long time, and it really sucks.