November 14th, 2007 by Potato

There were two articles in the Free Press today that I found kind of interesting, especially put together. The first was on those payday loan services, and the ridiculous annual rate that their fees work out to (over 700%).

“If we’re not there, what’s going to happen? The power is going to be cut off. The kids are not going to eat,” he told the board.

Critics scoffed at the idea, saying payday loans can often trap low income-earners in a cycle of poverty.

“They’re trading off essential things, like buying medication or paying their rent, for trying to eventually pay off their loans,” said Gloria Desorcy, head of the Manitoba branch of the Consumers Association of Canada.

“How do you ever catch up?”

The second was related to the massive sinkhole that hit downtown London on Halloween. It knocked out power for the whole day, and many people weren’t able to work in the downtown core. As a result, two guys who work in a call centre are trying to recover their lost wages for the day. I don’t really know whether these guys have a case or not, and I don’t really care (though I think it’s pretty damned ballsy to try to recover lost wages for the day spent navigating the red tape at city hall). What caught my eye was this quote:

The loss of the wages hurts, said Underhill, a father of four.

“It doesn’t seem a lot to the city,” Pinnell said. “But this bill gets cut and this bill gets cut. Everybody lives paycheque to paycheque.”

[emphasis mine]

Now, maybe this was just innocent hyperbole on the part of Pinnell, but I find that kind of disturbing nonetheless, that not only are there so many people out there living paycheque-to-paycheque, but that some people perceive that to be the norm, to be an acceptable way to carry on your life. I just couldn’t imagine not having some kind of buffer in savings or overtime options or something to make up for potential lost wages or surprise expenses. And the thought that everyone lives paycheque to paycheque makes getting ahead of the payday loan places even more difficult: how can you make sacrifices to save if you don’t even believe that saving is a virtue (or at least normal)?

One Response to “Paycheque-to-paycheque”

  1. Netbug Says:

    I agree 100%. I’ve had some form of savings going since I was 18 in addition to having built an outstanding credit rating (I was PRE-APPROVED for a $100,000 line of credit, at the bank, not just like a stupid junk mail ad… wtf?).

    I would encourage everyone to read a copy of The Wealthy Barber. Paycheque to paycheque is STUPID.