Jess and Makayla explore why it’s expensive to be poor and how everyday financial habits can make a bigger impact than many realise. While some choices feel like they save money in the short term, they often create higher costs and stress in the long run.
Why Cheap Isn’t Always Cheaper
One of the clearest examples of why it’s expensive to be poor is the idea that buying the cheapest option saves money. While low-cost items feel like a win at the checkout, they often wear out quickly or need replacing sooner than expected. Shoes, umbrellas, appliances, and even flooring can end up costing more in repeat purchases than a single, well-made item.
Cars are another area where this plays out. A cheap, unreliable vehicle may look like the smarter option initially, but the ongoing repairs and fuel inefficiency quickly add up. Spending a little more upfront – where possible – can save thousands over time.
The Spending-to-Save Trap
Everyday spending habits also highlight why it’s expensive to be poor. Buying food in small amounts or shopping multiple times a week often feels manageable, but it usually means paying more overall. Meal planning and bulk buying reduce waste and costs, but these strategies aren’t always accessible if money or storage is tight.
The same issue arises with services and subscriptions. Paying monthly for gym memberships, insurance premiums, or apps feels flexible, yet it adds up to more than annual or quarterly payments. For those unable to commit to the larger upfront cost, the long-term expense becomes unavoidable.
Renting Vs. Owning
Housing provides one of the most significant examples of why it’s expensive to be poor. Renting can feel more affordable than taking on a mortgage, especially with today’s higher interest rates, but it means paying someone else rather than building equity. Over time, home ownership generally creates financial security and reduces housing costs in retirement. Without it, the long-term expense of rent can put significant pressure on future finances.
The Value of Insurance
Insurance is another cost that often feels unnecessary – until it isn’t. Health, life, and income protection cover may never be used, but without it, families can face devastating financial consequences. A medical bill, unexpected illness, or the death of a partner can wipe out savings and push households into debt. Insurance provides a safety net, ensuring that risks too large to manage alone are covered.
Key Takeaways
- Cheap isn’t always cheaper – quality purchases often save money over time.
- Planning meals and buying in bulk reduces costs, but requires upfront cash and storage.
- Paying monthly for services feels manageable but often costs more long term.
- Renting may feel affordable now, but mortgages build equity for the future.
- Insurance is essential to protect against financial shocks.
Next steps:
If you’re ready to make smarter long-term choices for your financial future, Lighthouse Financial can help create a plan tailored to your situation.
If you’d like to learn more, check out these other episodes below.
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Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
