Why it's so expensive to be poor
One of the problems with not having much money is that often you have to pay more for things. Yes, that's right - it can sometimes cost more to be poor.
There is no simple, easy-fix solution to breaking the poverty cycle as there are intrinsic inequalities at many steps of the way.
Here are five reasons why surviving on a low income can actually make life more expensive.
Australia is suffering a chronic housing affordability crisis, including a lack of public and affordable housing options. While I'm proud to be a landlord providing affordable housing to an older woman through a scheme run by YWCA Canberra, this is just a drop in the ocean when it comes to addressing and solving the need.
One of the sad things about COVID is it has exposed the extent of homelessness, especially among elder women, as it closed down places where the homeless usually hid such as house sitting or couch surfing.
With rental demand high and vacancy rates low, most landlords are able to choose who they want in their properties. If you were a property manager, you probably wouldn't be recommending an older woman working part-time on a low income, or a single mum with six kids on child support.
Accordingly, premium rental properties in sought-after locations and good prices usually go to those earning more. People on lower incomes often end up having to commute long distances to work and living in places that are poorly insulated or need repairs.
Or in some instances, they need to stay in motels or Airbnbs for long periods until they can secure a rental or public housing.
In an increasing number of cases, domestic violence victims are being forced to stay in unsafe households due to the housing crisis.
It's not just where you live, but the transportation options to get you from A to B. People on lower incomes often reside where there are limited public transport options - or in some cases, none at all.
Living in outer surburbs, they are more likely to pay more for public transport to get to work, childcare, study and for shopping and admin - and the public transport may be less frequent. In many cases, they may be dependent on a car for transportation.
As they are less likely to be able to afford to buy a new or newish car under warranty, they are likely to pay more for car maintenance. And they are less likely to be able to afford regular car maintenance because, well, they can't afford it.
When their car breaks down, it also affects their ability to work and even get to places where they could receive community support. It's difficult to get to playgroup without a car with car seats.
One of the cheapest ways to purchase groceries is to buy in bulk. Many items such as minced beef, chicken drumsticks, rice or toilet paper are generally cheaper when purchased in bulk.
But it's hard to shop at Costco or another wholesale shop when you are a low-income earner: it can be a challenge to afford the annual membership let alone have the cash to purchase the items (or space to store them).
Further, it can be challenging to invest in all the other bits and pieces you need to make a meal - the pantry items.
Ever followed a low-cost recipe and they ask you to just add oil, butter, eggs, spices or other things from the pantry? What if you are on a low income and can't afford all those bits you need to make the meal? It costs money to build up those supplies.
And when you have trouble making ends meet, it can also be more difficult to get around and shop for bargains - especially if transportation is a problem. For instance, a local fruit and vegetable market near me regularly offers great end-of-week discounts on items. But it is difficult for people without a reliable car to access these savings on a Sunday as few buses go there.
The same goes for many local markets held on weekends, or multicultural stores hidden away from main shopping centres.
Without being able to present a payslip with many figures on it, it is tough for people on lower incomes to get access to tier A mortgage providers, car loans or personal loans. It also means they are more vulnerable to accepting payday loan arrangements.
This means they pay more in interest and may struggle to get out of compounding debt situations. In some cases, they may end up paying back double or more on an initial debt as the outstanding amount compounds.
From checking our smartphones each morning to turning on the heater and making coffee, energy is an essential part of our daily life.
But some people live in energy poverty where just turning on the heater is something they worry about.
People on lower incomes are unlikely to have cash to splash on energy-efficient appliances, and that forces them to buy energy-sucking products that cost more than the purchase savings in the long term.
Not only that, but their accommodation is probably older-style and lacking in good insulation. While most energy companies now have hardship allowances for people who are struggling, finding ways to beat the cold in winter is a real challenge for many people, especially older Australians.
Where to get help
These are just five ways that low-income earners end up paying more for items. There are many ways in which social injustice means that those most vulnerable in our communities often end up paying more.
If you, or anyone you know, is struggling to get ahead financially, the first step is to ask for help. The National Debt Helpline (1800 007 007) provides access to free financial counselling. In addition, there are some microfinance options such as the No Interest Loans Scheme available for those doing it tough.
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