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Credit Wise Living in Poverty
Poverty is a
serious issue throughout the world. In my home state of
Recently, I attended a local conference regarding Financial
Literacy in We were assigned an identity and given a summary of our
current life situation. Stations were set up to represent the utility company,
the mortgage company, a pawn shop, check cashing loan store, grocery store, and
public assistance. During the simulation, I became a 19 year old, unemployed,
high school drop out, single mother with a live-in boyfriend. Our bills totaled
$555 per month including a mortgage on our mobile home, lot rent, utilities,
food, and a car title loan that we had taken out. We also had to give
transportation passes at every stop to account for the gas or the bus to get us
there. Our monthly take home pay was $794.00 per month including $234 in TANF
(Temporary Assistance for Needy Families) benefits and $120 in food stamps. That
left us with $239 per month for everything else. Trust me $60 per week for a
family of three for everything else (such as gasoline for the car, medicine, car
repairs, diapers, toiletries, and other items) does not go far. Just to make it
interesting we were also given several items of value to pawn if we got
desperate. Before the simulations started, I told my partner (a.k.a. my
live-in boyfriend) that I knew exactly what we were going to do. We would pay
our bills by priority in order of importance (housing, food, car, utilities and
then the car title loan). In my real life as a credit counselor, that’s
exactly what we teach people to do. I also informed him that we would not go to
the pawn shop at all. I knew that I was going to fly through this exercise with
no problems. I am a money
management expert, right? It was amazing to me how quickly my priorities changed. In a
matter of minutes I transformed from the calm budgeting expert who had it all
figured out to someone who was just living in survival mode. Much of my reason
and logic went out the window. I could not pay the mortgage first as planned
because we only took home $110 per week from my boyfriend’s job. It was 3
weeks before we had enough to pay the mortgage. In real life, I tell people to
pay their mortgage first since we want them to avoid homelessness. In the
simulation, we paid the mortgage next to last and had been evicted by the time
we came up with enough money to pay it. In real life I advise people to avoid paying high fees for
services such as check cashing and to stay away from the pawn shop. Logic would
tell you that it is much cheaper to open a checking account at the local bank or
credit union than to pay fees for check cashing services. In the simulation, we
did not have a bank account and could not obtain one. In order to cash my
boyfriend’s check to get money to pay the bills, we had to pay a $10.00 fee
for every check we cashed. When we got a cut off notice for the utilities, I
found myself in line at the pawn shop to hock my stereo. I took the money from
hocking the stereo to pay the gas bill just before they cut it off. I also had
to stand in a long line at the public assistance office just to confirm my TANF
benefits. I had to take my baby with me since I could not afford daycare. I
stood in line for so long that the office closed and I had to come back the next
day. I witnessed another single mom making her sick child stand in line with her
because she had no other choice. She could not afford daycare and the child
could not go to school when she was sick. It was so amazing to me how quickly I changed my priorities
during this exercise. In reality, it is pretty easy to sit behind a desk and
tell people what they “should” do with their money. When you have extra
money, it’s easy to talk about all of the responsible things you should do
with it. I guess it’s the financial equivalent of armchair quarterbacking. In
my job, I recommend the logical, money saving way to live. However, when I found
myself in the situation of not having enough money to take care of my family and
keep from getting evicted, I just did what I could to survive. If a station
forgot to ask for my transportation pass (we were required to give them at every
station) I didn’t offer it. I just kept it and hoped to get through the
transaction without having to give it up. When the gas bill was due and payday
was days away, the pawn shop looked like a pretty good option. When the problem
of no checking account stood between me and getting money, I did not care that I
had to pay the $10 fee for every check. I just needed the money. One hot topic in After a few-hours simulation, I can’t pretend to intimately
understand all of the issues that people who live in poverty face. However, I do
feel like I learned some things. As advisors, we need to make sure that the good
advice we are giving is practical to the person receiving it. It is important to
be aware of all of the programs available to help people rise above poverty. For
example, I learned about a program that would allow me to go back to school to
learn a trade and provide daycare for my child so that I could take classes.
When assisting people who live in poverty, we may have good ideas that may not
be immediately possible. It’s important to help them bridge any gaps that may
keep them from being financially stable by referring to other programs that may
offer help. While making the right choices and personal responsibility are
certainly factors in financial stability, there are many others that come into
play. We must make sure that people have the resources necessary to help them
succeed. Lawmakers, social service organization employees and the general public
would benefit from a poverty simulation. Even though I just walked one short mile in the shoes of
someone living in poverty, the knowledge I gained will definitely impact my job
as well as my personal life. Next time you think that you would never end up
making the same choices as poverty stricken individuals, I encourage you to try
it. You may be surprised. I was.
* * *
Copyright © 2006 by Jennifer Wallis. All rights reserved. Want more money-saving tips? Get a FREE Subscription to our monthly newsletter!
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