I recently paid off my car J
The loan was originally for $10,000 with payments of $181 per month. The
interest rate was only 3.49% but would have cost $912.36 if I would have taken the
full five years of the loan. When I was attending classes it was impossible to
pay for school and make extra payments, but since I graduated in May I have
been able to pay four and five times the minimum with three years left on the
loan. The interest I actually paid was only $446.53 which saved me $465.83. I
do not like to pay fees and interest because I feel like the money goes into a
black hole of nothingness. I like to play with an interest calculator and found
that if I would have had $10,000 with 3.49% interest for five years, then I would
earn $1,903.49.
When I was a student I barely had any money in the bank and
my bank charges a $5 per month fee for not having over $500 in a checking
account. I paid that fee for several years probably losing at least $150 just
for being poor. I see borrowing money and having to pay interest as some other
form of punishing the poor.
The more money someone has, the less fees and interest one has to pay. I work with several people who do not have bank accounts and have to pay an exorbitant fee of $8 every two weeks to cash their paycheck at the nearest bank. Over the course of a year, the person will lose over $200 to the black hole of nothingness.
Another problem with not having money is knowing a lot of
people who have even less money. Rich people rarely meet poor people unless it
is a customer-server relationship. To a rich person, the poor are an abstract concept
who are only useful for charitable tax deductions. Nearly everyone in the
middle and upper strata of society can pay their utility bills, have cars and
the basic luxuries of a western lifestyle. What’s more important is everyone
they know has a similar lifestyle and are somewhat unaware people live differently
than they do. The disconnect from people who do not have modern conveniences
can save someone a lot of money. I know several people without cars and are in
need of a rides on a regular basis which over time can cost a significant
amount of money for someone with a car.
I read a paper which linked poverty with an increased rate
of smoking. I know a number of people who would rather not have heat in the
winter than give up cigarettes. The cost of a name-brand pack of cigarettes is
around $5 and assuming the person smokes a pack a day would equal $1,825 per
year that’s enough money to buy heat for a house or a really cheap car.
