No matter how much cash you’ve got, where you put that money can really show what class you are. We’re looking at the everyday expenses that poor people waste money on, while those who are more affluent will never buy. You might learn a thing or two about where you could better spend your own money.
Borrowing Money
When you’re running low on cash, payday loans seem like they can really help you out. But then you see the interest rates, which are through the roof. While people with more money might get a bank loan or put it on their credit cards with way lower interest, those with less money end up paying loads more in the long run.
Rent-to-Own
When you need a new couch or fridge but can’t afford it all at once, rent-to-own might sound like a good idea, but it’s really not. You could end up paying double what that item is worth. Meanwhile, people with more money might just pay upfront or get a low-interest deal because it saves them a lot of money and keeps their homes looking sharp without the extra cost.
Lottery Tickets
For lots of people, dropping a few bucks on a lottery ticket is part of their weekly routine because they have dreams of striking it rich. While it might give them a little hope, those few dollars add up, especially when you’re not seeing any returns. People with more money might buy a ticket for fun now and then, but they’re not relying on a win to change their life plans.
Paying More for Less Phone Service
No contract phone plans lure you in with the promise of flexibility, although they’re usually not that much of a bargain. Paying by the month can cost more per minute or data byte than those year-long contracts. These often require a good credit score that not everyone has, which is how richer people often get better deals.
Fast Food
As delicious and cheap as it seems, eating out at fast food restaurants does get expensive, especially compared to cooking at home. Some lower-income families might depend on fast food for convenience, but people with more cash often prefer more budget-friendly meals in their own kitchens. It’s also a lot healthier, too.
Fancy Convenience Foods
Similarly, gourmet ready meals save time but not money, as they’re far more expensive than making the same dishes at home. While it’s nice to skip the prep work, the markup on these meals can make regular dining out look far more affordable. Wealthier people would rather do it all themselves.
Bargain Clothes
Cheaper clothes wear out fast, and before you know it, you’re back at the store again. People with a bit more money will spend more on something that lasts longer because it’ll save them trips and cash in the long run. Constantly buying and replacing clothes is a waste of time and money, which rich people know are both important.
A Little Vice
Cigarettes and booze are not cheap, and when things are tough, it might feel like they bring some relief. Unfortunately, that relief comes with a hefty price tag. Wealthier people might spend some cash on a fancy drink or a rare smoke, but it’s more of a treat they can comfortably afford than a form of stress relief.
Banking on Overdrafts
When money’s tight, you may find yourself with a negative balance, and those overdraft fees are no joke. People with more padding in their accounts rarely have this issue because their money works for them instead of against them. Avoiding these fees could save you hundreds of dollars, which you could otherwise put towards savings or necessities.
Credit Cards
Cards designed for people with lower credit scores can really make things expensive with high fees and interest rates. People with more money tend to have better credit, and they can get more perks or low rates, but those struggling face the worst deals. This costs them more for the privilege of borrowing and makes it harder to get ahead.
Emergency Room Instead of Doctor Visits
Without regular healthcare, minor issues become emergencies, and lower-income people often have no choice but to seek expensive emergency care. It’s far better to get regular and more affordable doctor visits, which is a possibility for those with better insurance. They’ll get more preventative care and can avoid the ER for all but real emergencies.
Subprime Mortgages
Buying a home is hard without a solid credit history, and that’s where subprime mortgages come in. Unfortunately, they have high interest rates and harsh terms. Richer people get better mortgage deals, and for them, home ownership is a smarter investment. Over time, the extra interest you pay on subprime loans can add up to thousands of dollars.
Risky Car Title Loans
When you’re desperate for cash, a car title loan might seem like a good idea. But if things go wrong, you could lose your wheels, which is why people with more money would rarely risk something so essential. After all, they have other resources to tap into, and they know that losing your car could mean losing your job if it’s your main way of getting to work.
The Cost of Commuting
Similarly, relying on public transportation can be both time-consuming and costly, especially if the services are limited. While it’s expensive upfront to own a car, it’ll often save you money and time if you can afford it. The freedom to travel at your own convenience without waiting for buses or trains can make a huge difference.
Space Heaters
Although space heaters might warm you up quickly, they also use a lot of energy, which increases your utility bills. A good central heating system is more efficient, but the upfront cost means it’s out of reach for some. Investing in efficient home heating could save you quite a bit of money over time, especially during those winter months.
Prepaid Electricity
Some people go for prepaid electricity plans, which let you pay for your power before you use it. While it sounds good for anyone keeping a tight rein on their budget, it often comes with higher rates per kilowatt-hour compared to standard post-paid plans. People who can afford to pay their bills in arrears generally get lower rates and fewer service interruptions.
High-Cost Bank Fees
People with less money often have to deal with high bank fees for basic services like account maintenance. It’s even harder if they can’t meet minimum balance requirements, and these fees can destroy an already tight budget. On the other hand, people with better bank balances typically get waived fees, plus perks like interest earnings or rewards.
Premium Gasoline
Some folks believe filling up their cars with premium gasoline is better for performance, but it’s usually just a waste of money. Richer people might choose premium fuel for high-performance engines, and it’s more of an informed choice. They understand that regular gas works just fine for everyday driving.
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