[austinl]

There was a popular submission to HN a few years ago that really opened my eyes to how having a low income can cause problems to compound, making things exponentially worse.

An example the author gives of this is car problems: people with low incomes often have older cars that are more likely to have issues. If their car breaks down, there's a chance they can't afford repairs, which means they're unable to commute to work. Perhaps because of this, they choose to stop making water bill payments or buying as much food while saving for repairs. Everything is very precarious—you're essentially one or two unlucky incidents away from ruin. That, to me, is what it means to "be poor" in the US.

https://www.residentcontrarian.com/p/on-the-experience-of-be...

[randallsquared]

Also, people in these situations use loans to pay for things like repairs, or for other things they need to buy if the paycheck has to go to repairs. If you've ever wondered why anyone would use a point-of-sale loan for groceries, this is one reason: to free up cash for something urgent that they can't use a loan for, like car repair from a shade tree mechanic in the neighborhood.

Since there are often multiple things stacked up that are slightly less urgent that you might expect they'd use savings for, there's no way in this life to get ahead enough to have savings. Something will always come along (if not for you, for your family or a close friend) that you must use those savings for, should you have them, but which you could scrape by without or using a loan if you didn't have savings. This results in a lot of poor people having no habit of savings or aggressively paying down debt, which imparts difficulty in climbing out of this cyclic trap once they do get a better job.