Payday Loans and the Myth that They can Always be Avoided

At interest rates that can reach 400%, and a two week loan costs on average $15 per $100 dollars lent [1] it is safe to say that most people know they are getting into a crap load of trouble with payday loans. The thing is they often don’t have a choice. Or rather the choice isn’t all that great (ex. loan vs eviction, loan vs no car). The problem is taking the loan comes with terrible consequences, and often makes a bad situation worse. But can payday loans be avoided? Should we try to protect those who are preyed upon by these sleazy money lenders?

It’s been said that a person should save to avoid payday loans. My question: How to save money while working for minimum wage, paying rent, a car loan (or other transportation), gas, food, health care, heat, etc …and possibly supporting a child? Realistically how much do you think the best penny pincher could save? Keep in mind that the health care available to minimum wage employees is usually very sub-par making medical treatment and medicine very expensive. Let’s do some math.

before taxes
$6.55/hr * 40hrs = $262/week (~800 month after taxes)
$6.55/hr * 50hrs = $361/week (assuming time and a half for overtime) (~1150 month after taxes)

Assume you live in a dump and cheaply:
$450/month – rent
$150/month – food
$90/month – utilities (really low)
$300/month – health care (low)
$150/month – transportation (using public transportation… low)

total so far… $1140/month

Realistically we know that there are more expenses though. So how does a person living in this situation save?

flight, travel

Should it Have Been Funny or Sad?

Dear Internet,

The other day I was on a plane stuck sitting in front of loud people who described themselves as Neo Conservatives. Was the galaxy playing a “funny” trick on me, or a very mean one?

During take off and landing I was unable to shield my ears from their discussion and so I found myself alternating between fits of anger and giggles.

I nearly tore my ears off as the woman (let’s call her Ms. Showbiz for reasons I’ll get into later) explained that poverty will always be a problem because even if money was more fairly distributed there would be some people with more and others with noticeably less. Ms. Showbiz also pointed out that if America’s poor went to impoverished countries they would be well off. I won’t go into why exporting the poor isn’t a very viable solution, it’s just silly (and anyway, selling the poor might be a better idea, with thirty-seven million* people in poverty in America we could really get to work on our trade deficit). But lets just stop for a minute and think about the difference between being less rich and living in poverty. If you need a hint, the difference is the ability to own luxury items versus the ability to afford food, heat, shelter, and have access to things like quality healthcare and education. Big Screen TV vs. Antibiotics. I don’t know, seems like the difference is both different and important.

And Internet, the other thing that the man (let’s call him Professor Blackjack) said about Iraq and WMD’s, was that supposed to be funny? I couldn’t quite follow his “perfect logic,” but somehow the UN getting ejected from Iraq, his claim that Saddam’s generals even thought he had WMD’s, coupled with something about “always bet when you have eleven” justified the invasion and was, according to Professor Blackjack, “the end of the discussion.” I didn’t want to point out that debating the reasons for invading weren’t as important as a intelligent debate on how to end the war, much less that sound logic never uses gambling maxims.

In fact my dear Internet, the only part I know was supposed to be funny was Ms. Showbiz’s speech about why being on planes scared her. Particularly the digression where she explained that when she was younger she tried to be “Ms. Showbiz” and did modeling, dance, acted, and trapeze. Saying how it was good to have as many skills as possibly to land jobs. Because everyone knows that trapeze experience will put you way above the average actress. I heard that was why Meryl Streep got her big break. …Though to be fair it might have put Ms. Showbiz high in the running for circus fashion catalogs. I’ll give her that.

There was so much more, I laughed, I cried, I briefly considered building a twenty foot ray-gun to blast them and any of their similarly silly friends off the face of the universe with, but I’m just not sure which of those I was supposed to do. It was a confusing and difficult time, I’m just happy I escaped alive.

*according to the 2005 US Census thirty-five million people are in the United States are living in poverty, though there are plenty of good arguments for that number being significantly higher… and also some not very good arguments for it being lower.