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"Murphy was an optimist!"

Poor people cannot spend money smarter November 14, 2007 8:23 am

Posted by Doug McCaughan in : Economy, Touchy Subjects
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Update Oct 29, 2008: The Federal poverty levels have been increased slightly.

Narration:

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Last night I found myself staring at the pain medicine shelf in two stores. I wasn’t happy with the prices at CVS and I needed some food items so I switched to Food $*itty. With a 7 person household, I often shop bulk but the food companies play tricks and sometimes the larger container costs more than buying two smaller containers so I tend to scrutinize prices.

20 Tylenol PM geltabs cost $3.99 on sale from the normal $4.99 price. 40 Tylenol PM geltabs cost $7.49. Food City didn’t sell larger quantities than that but CVS has 150 geltabs somewhere around $15. With this product, it makes sense to buy bulk.

If you live a penny wise lifestyle, the choice is easy; buy the largest container with the greatest savings. Not only will be it longer before you have to replenish (and that time going to the store is time you could be spending making money) but you will have saved money! To get the equivalent 40 geltabs in the smaller container means spending $7.98 (49 cents more) which is a 6.5% difference. That’s more money than you can earn at your bank!

Why don’t the poor buy the larger container? Simple! Because they are limited by their resources (or lack of resources). If you are trying to stretch a dollar to the next payday, you aren’t going to spend "more" for the larger container when that extra $3.50 is going to buy the bag of frozen fish sticks which feeds the family until that next payday.

I want to see poverty abolished. That does not mean everyone lives in mansions. Poverty is not having money to pay for electricity, food, shelter, clothing, etc. A person living in a mansion can find themselves in poverty although one could argue that they could sell their worldly goods to escape the poverty prison. I feel our society is designed to keep the poor down (amz). If the utility company (power, cable, phone..they all do it) cuts you off, they typically charge you the past due balance, plus a late fee, plus a reconnection fee, plus the following months anticipated bill. What about interest? If a family couldn’t afford to pay the portion of the past due to keep the utility, how are they supposed to pay the full past due, plus a future bill, plus a service fee?! They do it by failing to pay someone else who then punishes them the same way with fees, interest, penalties, connection fees, and deposits. So, why don’t they just spend smarter and stay out of this situation? Because the situation does not give them the economic power to spend smart to avoid the situation. Poverty is a classic Catch-22 (amz).


[Source]

What’s that you ask, Yossarian? Oh, I bought the smaller $3.99 bottle of 20 pills. All of Food $*itty’s larger bottles had a warning that they were not intended for households with small children.

See also: A taste of poverty

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1. Poor people cannot spend money smarter - November 14, 2007

[…] Paul Goble wrote an interesting post today onHere’s a quick excerptNot only will be it longer before you have to replenish (and that time going to the store is time you could be spending making money) but you will have saved money! To get the equivalent 40 geltabs in the smaller container means … […]

2. My Personal Blog » Poor people cannot spend money smarter - November 14, 2007

[…] Check it out! While looking through the blogosphere we stumbled on an interesting post today.Here’s a quick excerpt Narration: [See post to listen to audio] Last night I found myself staring at the pain medicine shelf in two stores. I wasn’t happy with the prices at CVS and I needed some food items so I switched to Food $*itty. With a 7 person household, I often shop bulk but the food companies play tricks and sometimes the larger container costs more than buying two smaller containers so I tend to scrutinize prices. 20 Tylenol PM geltabs cost $3.99 on sale from the normal $4.99 price. 40 Tylenol PM gelt […]

3. medicine » Blog Archive » Poor people cannot spend money smarter - November 14, 2007

[…] Read the rest of this great post here […]

4. JayMonster - November 15, 2007

There was an excellent article (that I can’t find) that say something along the lines of, most people can’t afford to be poor.

In many inner city places, there are no “real” supermakets, and the “mini-marts” just based on volume wind up charging higher prices, then the example you gave on things like choosing between the more economical of two choices or feeding your family exacerbates this situation more.

What is sad, is how many people are completely oblivious to things such as this, and think that poor people just don’t “manage their money wisely” If they only knew.

5. Doug McCaughan - November 16, 2007

I think you nailed it. People are oblivious. I think if more people had a true awareness of what the working poor had to do to survive that we would see different decisions made with regard to taxes, healthcare and so forth.

What was that Bush dialog? Didn’t the lady say she was working 3 jobs and Bush smiled and commented about how great that was?


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