6 Ways Being Poor Is More Expensive Than Being Rich
Written by
Cara Danielle Brown
Edited by
Jenna Klaverweiden
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It seems that a grand paradox of wealth inequality is the fact that it’s more expensive to be poor than it is to be rich. This theory has been called the “Boots Theory,” popularized by a passage of Terry Pratchett’s novel “Men at Arms,” which explained it costs those in poverty more money over time to replace cheap boots than it does the wealthy to invest in more expensive and durable boots.
In keeping with this theory, here’s a look at six ways being poor is more expensive than being rich.
Limited Access to Preventive Healthcare
Annual checkups with one’s primary care physician or teeth cleanings with one’s dentist can prevent small issues, like skin moles or plaque buildup, from becoming larger, more expensive issues, like skin cancer or root canals. But individuals who can’t afford their copay, are hampered by subpar medical options or are uninsured altogether may avoid these appointments.
According to KFF.org, the financial implications of delayed care are huge. It reported that when uninsured individuals seek medical care, they frequently have unaffordable bills, with about 49% of uninsured individuals saying they have trouble affording care.
No Emergency Fund
Job losses, medical emergencies and car accidents can strike at any time, leaving people scrambling to cover bills and other unexpected costs.
“This is where an emergency fund can really come to the rescue,” said Erika Kullberg, personal finance expert, lawyer and founder of Erika.com. “Unfortunately, many of those who earn lower incomes can’t afford to create an emergency fund. Which means when disaster strikes, they end up borrowing money to get by.”
Higher Interest Rates and Fees
Those without the funds to pay off debt in a timely manner typically suffer from lower credit scores — which means future lenders require higher interest rates to offset the risk of default. Services like check cashing, payday loans and rent-to-own financing can prey on poorer individuals with exorbitant rates.
This means lower-income individuals are commonly charged higher rates than their wealthier counterparts. Additionally, low-income individuals are more often subject to overdraft fees or additional charges for failing to maintain a minimum balance.
Housing Instability
Lower-income individuals often face housing instability by way of frequent moves, eviction costs or temporary accommodations. In fact, according to a survey conducted by the U.S. Census Bureau this fall, 21% of renters said they were forced to move in 2024 because their landlords increased their rent in the last six months.
Security deposits, moving expenses and the emotional cost of unstable living environments further contribute to financially burdensome circumstances, which only dig the hole deeper.
Inability To Buy in Bulk
Consumers flock to stores like Costco because purchasing food and household essentials in bulk commonly results in savings. But for low-income individuals who don’t have the money to lay out upfront, buying in bulk is not an option. And neither is a $65 Costco membership fee.
According to the Chicago Booth Review, low-income Americans could reduce their grocery spending by 5% if they were to buy in bulk like high-income families do. Unfortunately, this just isn’t feasible for many.
Time Suck
It’s often said that time is money. So when poor individuals have to spend more of their time doing tasks wealthier individuals can outsource, they have less time and energy with which to compete in the marketplace.
For instance, if a wealthy individual can pay a housekeeper to do their laundry at home while a lower-income individual has to spend an afternoon at the laundromat and both are up for the same job, the wealthier individual may be better prepared for the interview the next day, as they had more time to prepare.
Advice To Help Reduce These Expenses
A lot of these issues are systemic and not simply resolved, according to WalletGenius. However, it’s important to remember that it’s a marathon, not a sprint.
Planning is essential. So is not attaching yourself to any one narrative. While circumstances can’t turn around overnight, there may be ways to slowly improve them. Instead of buying the highest-quality boots, perhaps budget for a slightly better-quality pair. Or set aside a small amount of money for a copay so that a simple medical issue doesn’t become a complicated one.
Small adjustments can add up over time.
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