4 ms·

The solution to that is not to live even closer to the edge.

pjc50 5y ago
The solution to being poor is to have more money, yes. (You're going to reply to this with "just cut expenses", to which I can pre-emptively reply that some of the people in this situation are already choosing between food and heating. I'm going to pre-emptively cite the link from the other branch of the thread, https://www.fca.org.uk/news/news-stories/tougher-rules-payday-lenders-take-effect https://www.fca.org.uk/news/news-stories/tougher-rules-payda... > We found some firms were using [continuous payment authority] as a debt collection method and that some borrowers therefore had difficulties paying for essentials such as food and heating. )
- Grustaf 5y ago
  Even if you assume that their income is entirely fixed, I don't think you believe that all of them live exactly as cheaply as they possibly can. I'd say if you can possibly survive without the heating, then it's better to do that for a while than borrowing money and end up even more dependent on your salary, being a week away from ruin rather than a month. In short, payday lending is a short term solution that make things worse in the long term, even when it is free of interest.
scrollaway 5y ago
"Thanks I'm cured" What's your revolutionary idea there? People wouldn't be poor if only they had more money?
- Grustaf 5y ago
  It's not very revolutionary but making it easier for people to save is a better long term solution than making it easier to get into debt. Remember that we are discussing this on a solutions level, not an individual level.
  - scrollaway 5y ago
    Yeah, you don't have a solution, you're just using the opportunity to complain about "the poor" (cf your other post specifically). "The solution is not to live this close to the edge" is akin to "the solution to car accidents is to not get into car accidents".
    - Grustaf 5y ago
      I wonder if you actually read what I wrote. I haven't written a single word of complaint about the poor. I am complaining about payday loans, I don't think it's a good idea, even when they are interest free. The long term effect is likely to be mostly harmful. I haven't claimed to have a solution, what I am saying is that ideas that increase saving are better. I did not saying anything like "the solution is to not live this close to the edge." That is the intended effect, not the path there. But if I were to invest in a startup in this space it would be one that helped people save. Some random ideas that I think are all better than payday loans: gamifying micro saving, lowering food costs by selling simple staple foods in bulk, access to discounts on soon-to-perish food. Also: financial literacy education. This is a problem even in well off countries, it's just that people are doing fine anyway because the bottom tier is still quite ok here.
      - scrollaway 5y ago
        You haven't been poor. There is nothing more obvious than that when someone's first suggestion is to turn off the heating, and their second one is to "gamify micro-saving". And you might be well-intentioned but your posts come across as incredibly arrogant because of that. This isn't a gotcha, or some gatekeepy way of saying "you can't fix poor people's problems if you haven't been poor". But your first step would be to try to understand why a better access to earned wages is so important and impactful that it is, in fact, potentially worth giving up a bit of money for. Having access to cashflow is a problem you can face at any level of income. Surely you understand it? (I mean, you're suggesting "financial literacy education"; I can't imagine you don't understand how important this can be…) For example right now, if you're poor and your situation calls for it, you might be taking a shittier job with worse pay just because it pays every two weeks instead of every four weeks. So having instant access to your wages may let you take a better job, and have a FAR GREATER IMPACT THAN SAVINGS. The above services by the way aren't payday loans. Those are extremely short term highly predatory one-time loans bound entirely to the customer. Services such as the ones Cashflow and Revolut are working on are more akin to: "you've already worked this much, so you have access to this % of your salary already", and they're bound to the employer. I'm not saying financial literacy wouldn't help, but fixing the perverse mechanisms that are happening when you're, as you said, close to the edge is what would have the most impact without requiring changes from the people themselves. Instant wages have a potential to kill the payday loan business and that's a big deal, even if it's not perfect.

The solution to being poor is to have more money, yes. (You're going to reply to this with "just cut expenses", to which I can pre-emptively reply that some of the people in this situation are already choosing between food and heating. I'm going to pre-emptively cite the link from the other branch of the thread, https://www.fca.org.uk/news/news-stories/tougher-rules-payday-lenders-take-effect https://www.fca.org.uk/news/news-stories/tougher-rules-payda... > We found some firms were using [continuous payment authority] as a debt collection method and that some borrowers therefore had difficulties paying for essentials such as food and heating. )

Grustaf 5y ago
Even if you assume that their income is entirely fixed, I don't think you believe that all of them live exactly as cheaply as they possibly can. I'd say if you can possibly survive without the heating, then it's better to do that for a while than borrowing money and end up even more dependent on your salary, being a week away from ruin rather than a month. In short, payday lending is a short term solution that make things worse in the long term, even when it is free of interest.

scrollaway 5y ago

"Thanks I'm cured" What's your revolutionary idea there? People wouldn't be poor if only they had more money?

Grustaf 5y ago
It's not very revolutionary but making it easier for people to save is a better long term solution than making it easier to get into debt. Remember that we are discussing this on a solutions level, not an individual level.
- scrollaway 5y ago
  Yeah, you don't have a solution, you're just using the opportunity to complain about "the poor" (cf your other post specifically). "The solution is not to live this close to the edge" is akin to "the solution to car accidents is to not get into car accidents".
  - Grustaf 5y ago
    I wonder if you actually read what I wrote. I haven't written a single word of complaint about the poor. I am complaining about payday loans, I don't think it's a good idea, even when they are interest free. The long term effect is likely to be mostly harmful. I haven't claimed to have a solution, what I am saying is that ideas that increase saving are better. I did not saying anything like "the solution is to not live this close to the edge." That is the intended effect, not the path there. But if I were to invest in a startup in this space it would be one that helped people save. Some random ideas that I think are all better than payday loans: gamifying micro saving, lowering food costs by selling simple staple foods in bulk, access to discounts on soon-to-perish food. Also: financial literacy education. This is a problem even in well off countries, it's just that people are doing fine anyway because the bottom tier is still quite ok here.
    - scrollaway 5y ago
      You haven't been poor. There is nothing more obvious than that when someone's first suggestion is to turn off the heating, and their second one is to "gamify micro-saving". And you might be well-intentioned but your posts come across as incredibly arrogant because of that. This isn't a gotcha, or some gatekeepy way of saying "you can't fix poor people's problems if you haven't been poor". But your first step would be to try to understand why a better access to earned wages is so important and impactful that it is, in fact, potentially worth giving up a bit of money for. Having access to cashflow is a problem you can face at any level of income. Surely you understand it? (I mean, you're suggesting "financial literacy education"; I can't imagine you don't understand how important this can be…) For example right now, if you're poor and your situation calls for it, you might be taking a shittier job with worse pay just because it pays every two weeks instead of every four weeks. So having instant access to your wages may let you take a better job, and have a FAR GREATER IMPACT THAN SAVINGS. The above services by the way aren't payday loans. Those are extremely short term highly predatory one-time loans bound entirely to the customer. Services such as the ones Cashflow and Revolut are working on are more akin to: "you've already worked this much, so you have access to this % of your salary already", and they're bound to the employer. I'm not saying financial literacy wouldn't help, but fixing the perverse mechanisms that are happening when you're, as you said, close to the edge is what would have the most impact without requiring changes from the people themselves. Instant wages have a potential to kill the payday loan business and that's a big deal, even if it's not perfect.