
Rental America: Why the poor pay $4,150 for a $1,500 sofa - footpath
http://www.washingtonpost.com/news/storyline/wp/2014/10/16/she-bought-a-sofa-on-installment-payments-now-its-straining-her-life/
======
aeturnum
I find it saddening and ironic that commenters here are having trouble seeing
the problem. The math is right there! The buyers should just stay within their
means! However, if we talk about a topic closer to the experience of the HN
crowd (say, Facebook's privacy policies), the tune quickly changes. People get
up in arms about the privacy policy, or the ad model, or anything else that
might affect their own lives.

Have a little empathy. These people sign contracts without understanding what
they are agreeing to, and instead of their vacation photos, they're out
thousands of dollars - substantial sections of their entire net worth. On the
other hand, if that sounds good, there are all sorts of payday loan companies
that would love investors for new branches I'm sure.

Edit: I don't mean the buyers don't grasp the full cost, but that they have
difficulty projecting their lives 6, 12, 18 months in the future. I'm not
under the impression the people in the story are dumb or ignorant.

~~~
arenaninja
I'm also bemused by the lack of understanding and empathy in this thread. For
all the social righteousness spouted by HN as a whole, this is disappointing
to witness

~~~
cheald
You're not considering that some of us may have actually been/are poor. My
frustration at people throw their paycheck-to-paycheck earnings at Rent-a-
centers isn't "oh, look at the stupid poors", it's "I've been there, and I
know that you can get a $1500 couch for $50 cash if you are willing to get up
at 5 AM on Saturday mornings and go hit garage sales."

The article's presentation of "These people have no options except to be
horrifically exploited" is wrong at best, maybe even dishonest. No matter how
much money you make, spending beyond your means because you have to have
luxuries you really can't afford is a bad financial play.

I feel a lot of empathy for people who get caught in the RAC trap. They're
digging themselves into a hole that they'll never escape from, and that's
genuinely sad. But it's a fixable problem! They aren't victims of their
circumstances, they're victims of their own consumerism. At the end of the
day, each of us is responsible for what we choose to spend our earnings on,
and if you choose to spend all your expendable income on instant
gratification, that's your choice, and you get to own the consequences of that
choice.

~~~
Delmania
How similar was your situation? Did you have a family you needed to support? A
full time job?

~~~
cheald
You realize that no matter how I answer this question, someone will say "Oh,
you weren't as poor as X", and thus claim that I'm not qualified to empathize,
right?

I had a family and was self-employed, which meant no guarantee of stable
income and self-employment insurance, plus self-employment taxes. My take home
covered rent, food, and basic utilities - usually. We certainly couldn't
afford new furniture or appliances. We ate at a 10-year-old kitchen table that
cost $100 from a grocery store with 4 chairs, which were literally falling
apart from use. My couch was second-hand from a garage sale. My car was a used
one that I learned to repair myself because I couldn't afford to pay a
mechanic to fix it for me.

I could have "afforded" to rent furniture. I even looked at it at one point,
did the math on it, and nope'd right out of there. My wife wasn't happy at all
- she'd been campaigning for new furniture for a long time - but it was the
right financial choice.

I'm in a much more stable financial situation now, but my kitchen table is a
used one that my wife and I stripped, sanded, and refinished ourselves. My
entertainment center we got from some friends who were moving and didn't have
room for it. My TV I picked up on the curb, and it cost me $35 for a new DLP
bulb. My coffee table I got for $20 at a furniture outlet store. I still have
the garage sale couch.

~~~
monksy
I've been in a situation where I was in grad school. There isn't much money
coming in if any at all, and no loans. That was years ago, even now when I
moved and had to throw out the couch I had since grad school: I refused to pay
more than $600 for a couch. It's unbelievable that someone would pay 800 for a
single couch. I paid $550 for a love seat and a couch. Is it cheap? Yes, have
I become a social pariah for doing so? The guests from last weekend's party
certainly didn't give a toss.

~~~
Noted
How is it unbelievable that someone would pay $800 for a couch? If your $550
couch isn't the best couch in the world, then maybe there's a reason other
people with different sensibilities and means would pay more than you would
for a couch.

~~~
monksy
Point of clarification: my couch and love seat for 550.

------
monksy
Part of me is disgusted that this business is allowed to operate in this
manner.

However, the sensible side is frustrated that these people aren't doing basic
math. These people are choosing to buy something that they can't afford. Do
they need these items? Does anyone need a couch? Does anyone NEED a TV/wedding
ring? No. You can live without it.

End the end: All I got from this article was: "Look at these people who don't
realize where they stand financially and refuse to accept that it's not where
they'd like to be."

~~~
nkozyra
> Part of me is disgusted that this business is allowed to operate in this
> manner.

I understand this sentiment, but it's risk mitigation. As the article points
out, there are no options for these people outside of this. It's serving a
market and it's doing so in a way that reduces the risk - in some ways for
both parties.

Is it a smart move on the part of customers? I think it's hard to argue that
it is, but I don't know that it's necessarily the fault of these businesses.
If anything, it's a better move than going to an Amscot or getting a subprime
credit card, because you're not wrecked financially nor is your credit ruined
necessarily.

~~~
bluedino
>> As the article points out, there are no options for these people outside of
this.

Going without a 60" TV or iPad isn't an option?

~~~
plorg
The TV, no, but it is entirely possible that the iPad is being used for
internet access. At this point in time a person without internet access is at
a serious disadvantage to the larger population.

~~~
S4M
How about buying second hand computers or laptops?

~~~
JetSpiegel
The amount of computers just thrown away should be enough.

------
mikeash
I'm annoyed at how this story portrays these rental ripoff places as being the
only choice. Sure, _if_ you must buy a new $1,500 couch, then it's their only
choice. But what about not buying expensive new furniture when you're poor?

I don't mean to blame the victim, here. But it really rubs me the wrong way
that the article doesn't even mention the possibility that a person could
_not_ buy stuff they don't need.

We could do with a lot better financial education. Far too many people think
of large purchases in terms of a monthly cost. We could also do with usury
laws that enforced better and harder to dodge. But we could also do with a
discussion of these things that doesn't paint buying a $1,500 sofa as the
"only option".

~~~
cheald
Or that they could buy it from Goodwill. Or a garage sale. Or through
Craigslist. Or at any of the myriad furniture outlet stores that sell flawed
and used furniture at pennies on the dollar.

There are lots of options, but they usually involve paying cash, which means
having the discipline to save cash for what you want and not spend it when you
want something else.

~~~
mikeash
Or pick stuff up off the street on garbage day. Been there, done that, still
have a garbage-rescue stool sitting around my expensive townhouse.

~~~
pluma
Sure, but the status implications of doing this severely depend on your
general situation.

If you have an expensive townhouse, picking up furniture off the street can be
seen as either being clever with your money or even "artsy" (especially if
your refurbish it before putting it in your expensive townhouse).

If you are dirt poor, it just reaffirms your inability to afford actually
spending money on things like that. And because being _actually_ poor (e.g.
being raised in a poor family, lacking a reasonable level of education, having
bad job prospects (no chance of career advancement), working three crappy jobs
to barely sustain your household without being able to put any money aside,
and so on) carries a lot of stigma, poor people tend to be more self-conscious
about how poor they appear to their peers (especially peers that _do_ buy
expensive crap even if they have to sign this kind of bullshit contracts).

There's also a distinct difference between being poor as a student or
entrepreneur (because being poor is just a temporary thing and it's seen as a
temporary sacrifice) versus being poor as a regular part of the workforce (why
don't you just save some of the money or work more?) or unemployed (why aren't
you working?) or even long-term unemployed (why haven't you been working? or
from the employer side: there must obviously be something wrong with you or
else you would have been working).

~~~
mikeash
I agree, and that stigma is part of what creates poverty traps. However, it's
still an option, and still something the article should consider before
painting these ripoff artists as the "only option."

------
cheald
> Perhaps she could have saved up the money on her own, but whenever she has
> tried to do so, her stash has been wiped out to handle daily needs.

I...what makes you think you can handle payments on a lease if you can't save
what you'd be paying on those payments otherwise?

People are really bad at managing money. The proliferation of credit has done
immense damage to peoples' abilities to conceptualize what they can afford.

~~~
pavel_lishin
Because you don't need to save up as much to make payments on a lease. Those
are, let's say $50 a month. As soon as you get your paycheck, you send that
$50 to the rent-to-own agency, and that money is gone - they're "saving" it
for you.

Whereas if you keep putting that $25-per-paycheck into a savings account (or a
shoebox, or a hollowed-out book or whatever), there will probably come a time
when being able to fix your car's transmission, or buying food to make sure
your kids aren't starving, or having just one dinner at a place with cloth
napkins, is going to seem more important than whatever you're saving for.

~~~
kstenerud
Yes, exactly right. All the more reason not to hobble yourself with crippling
financial obligations just to get a new sofa. They're essentially locking
themselves into a financial decision that cannot be undone, and therefore
when, later on down the road, more important financial decision points present
themselves, they're unable to cope.

But this ties into the poverty trap where you simply stop thinking about the
future because you're out of hope.

------
bluedino
Immediate gratification. It's easy to walk into Rent-a-center and come out
with a TV, couch, iPad, laptop, etc without realizing that for those weekly
payments, you could buy one of those items each month. In a few months you own
them all outright.

This isn't just for low-income people. Plenty of people making a decent salary
will go out and overextend themselves when they get their first apartment as
well. Rent-a-center comes to take stuff back from people that make $60k/year
just as often as they do from people who make $30k/year.

I'm also not sure I'd classify people as 'poor' who have $300/month they can
spend on renting these items which are mostly luxury items. You can argue that
you 'need' a TV or laptop to live, but you can get a $200 laptop or $200 TV,
instead of $1,000 models.

------
buyx
People are ignoring the elephant in the room: a lack of intelligence on the
part of these people. It's one thing to have a CS degree and figure out the
maths of owning vs renting, but quite another to expect a ninth grade dropout
to do the same. The idea that all people are capable of making rational
choices is a myth.

And yes, stupid people tend to be poor, and poor people tend to be stupid. I
live in a country where the vast majority of people were kept uneducated (and
I profit handsomely from the educational/intelligence differential between me
and them). They would be eaten alive by big business if the government didn't
make an effort to protect them-and the givernment knows it is into own
interest to protect the poor in the interests of social stability, since there
are so many of them.

The way I see it, is that governments in the US have no need to protect the
poor from the consequences of their own stupid choices, even if it is
ethically the right thing to do.

~~~
Meekro
When the government deliberately keeps people uneducated, then I agree with
you -- it's unethical to force people into that rut and then take advantage of
them for being there.

But the government in the US is trying to get everyone educated -- not always
effectively, though. I know some schools suck, I went to a public school in
the middle of a ghetto. Many of the students came from impoverished families,
and would routinely _bite the hand that feeds them_ when it came to education
-- by disrupting class, (very proudly) not doing their homework, and whatnot.
Watching that kind of behavior day-after-day took away any sympathy I might
have for the consequences of their actions.

------
gregatragenet2
It is interesting how this thread is split between messages of 'they should
make better decisions' and then the reply/response that absolves the decision-
maker by stating that it's the fault of the 'stress of poverty', not the fault
of the decision-maker. I think the reason more people make these short-sighted
bad decisions is exactly because they're being told that being in poverty
doesn't have anything to do with the personal decisions you make but your
'circumstance'. If we tell people this, what motivation do they have to make
prudent long-term decisions at the expense of short-term gratification? What
they decide as an individual doesn't matter, or so their told - and they are
told that it's a 'societal' problem, that 'society' needs to address/fix, so
again, where's the motivation to make sacrifices at an individual level to
increase one's lot in life?

Regardless of the reality - of the two statements "it's your decisions that
affect your level of poverty" and "it's society's fault you are poor" \- one
of these statements empowers the individual to make better choices, and the
other discourages it.

PS: +1 to the folks who said garage sale / thrift store / second-hand couches.
It's mind-boggling that anyone struggling w/ money would buy(/rent) new
furniture.

------
agentultra
I find it saddening that the commenters here are having trouble with being
empathetic.

People who are exploited don't need your advice. We all know that we _can_
live in a lean-to made of spruce branches and dry pine needles if we had to.
That's not the problem these people have.

Maybe the commenters here offering their well-intentioned advice are unaware
of the shame and guilt that goes with being poor. It is widely believed in
popular culture that your financial situation and future are within your hands
and beyond reasonable misfortunes, if you end up poor, it's self-inflicted:
you mismanaged your money, you decided to have an alcohol addiction, you don't
know how to follow safety procedures and lost your leg, you didn't study hard
in school and save money to go to college. You didn't work hard enough. You're
lazy. You're stupid. You smell. You could dress better. Blah blah blah.

The problem is that these rent-to-own businesses exploit that shame and guilt.
They're using some pretty under-handed tactics to convince economically
disadvantaged people that they can afford these luxury goods they clearly
cannot. They try to sound appealing by offering luxury goods to people who
cannot otherwise afford them so that they can stop feeling like they are
failures. They obscure the true cost of their payment plans with sticker
prices that emphasize the lowest term prices and not the full cost (car
advertisers like to show the lease-cost in the commercial but are required in
most places I know to disclose the full price of the car in the ad).

To say that these people are "stupid" for falling in with these businesses is
ignorant of the predatory practices these businesses are using and the
complicating factors which result in poverty.

------
SheepSlapper
Reminds me a lot of the Sam Vimes Boots Theory:

"The reason that the rich were so rich, Vimes reasoned, was because they
managed to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus
allowances. A really good pair of leather boots cost fifty dollars. But an
affordable pair of boots, which were sort of OK for a season or two and then
leaked like hell when the cardboard gave out, cost about ten dollars. Those
were the kind of boots Vimes always bought, and wore until the soles were so
thin that he could tell where he was in Ankh-Morpork on a foggy night by the
feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could
afford fifty dollars had a pair of boots that'd still be keeping his feet dry
in ten years' time, while the poor man who could only afford cheap boots would
have spent a hundred dollars on boots in the same time and would still have
wet feet.

This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness."

I know people that rent to own, and while part of me is screaming "WTF, save
up for a couple of months" inside, another part understands the thought
process that gets you things like couches NOW but at 4x the cost.

~~~
kwhitefoot
Snap! Made the same comment just now. I often wonder how popular Pratchett's
books are in the US and whether people see the parallels.

------
MarkLowenstein
Alternate title: Why people who pay $4,150 for a $1,500 sofa are poor

~~~
ctdonath
This.

Some feel entitled to have something ("I want it, I _deserve_ it, I'm getting
it, I don't care about consequences" \- yes, I often hear that one). Some
think they can afford it but can't ("oh, it's just $30/mo, and I've got
$100/mo to spare" \- and they do this 6 times). Some fall for fast-talk
marketing ("look at this great-looking new $5000 sofa! for just $50/mo you can
have it right now!" \- no timeframe specified, same thing is $1500 down the
street). Some just don't understand finances ("I can't be broke, my credit
card still works"). Some are proving something ("I bought it just to convince
myself I'm rich enough to" \- yup, hear that one too). Some just trust it will
work out ("I spend $150/day, my spouse takes care of it" \- while he gets
second & third job, leveraging finances to the breaking point, as she ignores
his pleas to stop). All of it adds up to: you're poor because you're spending
$4150 for a $1500 sofa you could have gotten off Craigslist for $100 and which
you didn't need anyway. Ignorant, willful or malicious, outgo > income =>
poverty.

I keep thinking back to a moment of comprehension: I was repairing a poor
family's sofa (gratis, because I care even though I'd only met them that day),
wondering why it was damaged the way it was, when the tweenagers asked me for
a sheet of plastic to cover the window they had just torn the screen out of
(and presumably had prior broken the glass) - hit me that they were in the
state they were in because they had as a way of life wantonly destroyed what
they had.

Yes, some are poor because life dealt them a bad hand; don't conflate them
with those who CHOOSE to be poor. And to the currently lead comment: I am
empathetic, and continue to assist the poor - but empathy wears thin when
people make stupid choices on a regular basis and blame those who merely
fulfill their demands & desires.

------
jack-r-abbit
> "Perhaps she could have saved up the money on her own, but whenever she has
> tried to do so, her stash has been wiped out to handle daily needs."

If you can't keep up with payments to yourself, you have no business entering
into a contract to make payments to someone else.

------
gexla
> Normal families have sofas, she says, and you’ll do what it takes to feel
> normal.

This is the problem. They have certain expectations set as to what a "normal"
life is. A big, fluffy, crap sofa. Park the thing in front of the T.V. and
waste your time.

Come to the Philippines, it's a great place to reset expectations. Personally,
I would rather setup the "living room" in nomadic style. Throw a rug and some
cushions on the floor. Maybe arrange them around a circular bamboo table on
which you can set food on. Sit around that table and talk to your family and
friends.

> Some weeks, they couldn’t pay their cellphone bills.

In the Philippines, people don't have cellphone bills. Nearly everyone goes
prepaid.

------
lostcolony
Rather than berating people for not considering the cost, put it into a
perspective you can see.

Sure, eating 10,000 calories in one meal is not something your waistline can
afford, and you recognize that, but that's about what that one donut a week is
equivalent to over the year. It's really easy to say "Okay" to something you
really really want when it's a small periodic cost, and even if at some level
you know it adds up, you still can make that mistake really easily, and get
irritated at the person who keeps bringing them to the Friday meeting (or
whatever). So some irritation at the system allowing this behavior might be
reasonable.

~~~
mikeash
Absolutely. And when an article talks about how eating one donut a week is the
"only option" for many people to reach 10,000 excess calories per year, and
never even mentions the possibility of _not_ eating 10,000 excess calories per
year, there's something seriously wrong with the writing.

------
untom
This pisses me off so hard. This isn't some poor person needing a couch, this
is downright irresponsible on the buyer's part, and then they complain about
the pricing.

I can hit craigslist and get free couches that are perfectly usable all day
long. My house is almost entirely filled with craigslist and garage sale
furniture. I have a beautiful solid wood armoir for my 26" flatscreen tv. It
and everything inside it cost less than 60 bucks.

I don't go out buying 1000 dollar 60" tvs for 5000 dollars. That's rediculous,
nobody needs to, it's just consumerism at it's worst.

~~~
noahl
You're certainly right that buying an expensive item without having the money
to do it is a bad idea, but think about the infrastructure and amount of time
you needed to find those cheap items. You had a working computer or phone, an
Internet connection, and enough knowledge to know to look at Craigslist. When
you found your item, you probably had to arrange shipment, but it was no
problem for you because you either had a car that could carry it, had a friend
with one, or in the worst case, were able to rent one. Finally, you had
several blocks of time that weren't already filled with things you had to do
to handle searching Craigslist, maybe searching again, and finally going to
pick up and take home your new piece of furniture.

I don't know your specific circumstances, and I apologize if the points above
don't all apply to you. But it's important to realize that there are a lot of
non-obvious resources that people from wealthy backgrounds have that they
don't even think about which allow them to save money.

~~~
MrZongle2
_...but think about the infrastructure and amount of time you needed to find
those cheap items._

One can purchase a local paper for $1.00 or less. Yard sales and Goodwill
stores are free and easy to peruse on a weekend morning.

Let's not pretend that finding a _couch_ is a herculean task, or _saving up
the cash_ for a couple of months is nigh impossible.

~~~
bitJericho
You could buy a minivan to haul it (and finance it at a reasonable rate), and
buy a craigslist couch for the amount she spent on her couch.

------
dutchbrit
What about second hand couches? I'm not sure how it all goes in the US, but
here in Holland, we can get tons of free couches that look fine, do people
sell everything they want to get rid of over there? -
[http://www.marktplaats.nl/z/huis-en-inrichting/banken-
bankst...](http://www.marktplaats.nl/z/huis-en-inrichting/banken-
bankstellen/bank.html?query=bank&categoryId=505&sortBy=price&sortOrder=increasing)

Stuff like this disgusts me. How is it even legal to charge so much interest?!

~~~
s1300045
To provide some background, one needs to understand the United States is vast
geographically. Driving for 2 hours over 100 miles (160 kms) is considered
normal to a lot of people. That creates a huge gap among the poor and the
middle class in terms of resources. I live in Chicago, and it is very, very
easy to get a user couch in great condition for under $100 because the supply
is plenty. People here can afford to get rid of their barely used furniture
for whatever reason they like.

On the other hand, people living in the poor, rural areas have no access to
this supply of cheap quality used goods. And they don't have the means to
leave.

I would suppose opening up a business that transfer used goods from the rich
area to poor area and capitalize on the margin would be a great idea in a lot
of ways.

~~~
bluedino
If you can drive over to Aaron's to get a couch, you can drive to someone's on
craigslist to buy one (or have them bring it to you for an extra $20)

------
colinbartlett
This is exactly how the major wireless carriers work.

Consumers pay 2x for a phone because they can't afford to pay upfront for
their phone. Or because they don't do the math to realize how how much more
they're paying by financing their phone rather than saving up for it.

------
post_break
Look at this on a micro scale. Cell phones. Tons of people have iPhones. You
can watch it happen in real time inside any T-Mobile store. Every time I go
someone stomps out without an iPhone, you know why? They abolished contracts.

Tell someone they have to spend $650 on an iPhone _today_. They will balk.

Tell someone they can spend $200 on an iPhone. They will sign their life away.
And that $200 iPhone quickly becomes a much more expensive iPhone.

------
MadManE
TL;DR Luxuries cost much more for those who might not pay for them.

~~~
paulornothing
It should actually be TL;DR It's very profitable to exploit the poor.

~~~
MadManE
Nothing about this is exploitative. Poor people have a very high chance of not
paying these debts, so they are charged a much higher fee over time instead of
being able to pay a lump sum.

These are not necessities for living. iPads, couches, and lamps are luxuries
in varying degrees. These people can always make the choice to simply _not buy
them_.

~~~
notahacker
The cost of collecting from delinquent debtors does have to be taken into
account. Here's the profit margins of the rent-to-own industry leaders in
context (from their lobby group) [http://www.rtohq.org/legislative-
resources/rto-vs-retail-a-p...](http://www.rtohq.org/legislative-
resources/rto-vs-retail-a-profit-comparison/)

Massively overcharging poor people for products they probably shouldn't buy
_is_ a profitable endeavour, but only in line with the margins made by budget
retailers usually regarded as offering good value-for-money

~~~
MadManE
This is a good point that I forget about. People seem to assume that just
because the prices being charged are insane (and they are), then the business
must be lighting cigars with $100 bills.

There is a _reason_ that the prices are so high. It's not just the "evil
capitalists".

------
orbifold
Interestingly the US and Great Britain complain that some other European
countries do not stimulate their economy by encouraging debt financed
consummation and therefore have export heavy economies (e.g. Germany). I guess
this is the flip-side, poor people buying stuff they don't really need,
without actually being able to afford them, because they have been conditioned
to do so. It's not like you couldn't get a perfectly acceptable couch for a
few hundred Euros or even for free.

Of course in the current economic climate anyone not investing properly and
just saving money is losing roughly 2% to inflation and probably even more
because the stock market has risen by much more. So countries where people
have traditionally left lots of money in saving accounts get screwed over and
those that are in debt are rewarded (the majority in the US and GB).

------
buyx
In South Africa, most consumers are poorly educated, and ignorant, and
furniture retailers have been milking them in a similar way for decades. The
National Credit Act, introduced in 2007, was supposed to tighten up on
reckless and exploitative lending, but they figured out all the loopholes. The
Marikana massacre in 2012, which was the worst example of post-apartheid
unrest can be traced to ignorant mineworkers having their wages garnished by
creditors.

In the last few months, African Bank, which owned a furniture company,
imploded.

JD Group, the dominant furniture retailer, that was built on exploitative
credit, is spinning off its financial assets.

Still, there is more pain ahead. How ironic that the U.S. is allowing its poor
to be exploited the same way.

------
ja27
I used to volunteer with the American Red Cross, mostly going out to help
people that were displaced by fires in their home. It was an amazing contrast
to see. Almost every time we had a fire in subsidised housing units, they
would be decked out like a Buddy's showroom, often complete with a bigger TV
than I had. But if you went to cheap unsubsidized apartments or trailers,
you'd see a lot more "found it at the curb" couches and milkcrates-as-shelves.

Part of that is transportation and availability. A guy living in a lower
middle class or so neighborhood that drives a pickup is a lot more likely to
find and grab a free / cheap couch than a single mom taking the bus to work.

------
madengr
I call BS on not being able to afford Craigslist items. You can find leather
furniture (i.e. low likelihood of bed bugs) for cheap.

------
MrZongle2
Proper title should be "Rental America: Why the _stupid_ pay $4,150 for a
$1,500 sofa".

Let's stop sugar-coating this kind of nonsense and shifting the blame to
predatory companies. _Nobody_ made these people spend their money on _non-
essential_ furniture and electronics.

If we were talking about food, utilities, healthcare or shelter, it would be
another thing entirely. But these folks have set aside delayed gratification
and _voluntarily_ purchased luxury items at a mark-up that would make a
theater concession stand manager blush.

~~~
pluma
That's only partially true.

Yes, nobody's pointing a gun at their head and forcing them to buy expensive
crap.

But there's advertising everywhere. Advertising is there to get people to buy
things they might otherwise not buy. I'm not against consumerism, but it's
absurd to have companies spend billions on getting people to buy their stuff
and then blaming the same people for their purchasing habits.

Humans are not rational machines. We're social animals. We do a lot of stupid
things. But we're not any more stupid for not being able to grow beyond that.

~~~
MrZongle2
_But there 's advertising everywhere. Advertising is there to get people to
buy things they might otherwise not buy._

But if advertising is such an irresistible siren song, how come you and I --
and everybody else on HN -- are not up to our necks in debt to rent-to-own
stores?

I don't think its because we're _special_. I think it's because most of us
engage in some kind of critical thinking, self control, and can do basic math.

It is the responsibility of the _individuals themselves_.

~~~
pluma
If advertising wouldn't work, there wouldn't be so much of it.

Look at yourself critically. How many of your last year's purchasing decisions
were based on actual _need_? And of those, how many times could you have
bought something cheaper instead? And no rationalisations about cost and
quality and long-term amortisations and whatnot, please.

Yes, poor people suck at managing their money. But at the same time the
advertising industry focusses on them. A lot of price-based advertising relies
on people not looking at it closely enough. Yay, free phones with mobile
contracts. I can buy a new sofa for only $50/month (over the next ten years).
This ringtone costs only 99 cents (if you subscribe for 3 ringtones per week
at a cost of $2.97/week and all the ones you want are in different
subscriptions and don't forget the offer code you originally subscribed with
or you'll have a hard time cancelling the subscription when you notice it a
month from now).

Our culture places a lot of emphasis on status symbols and wealth. If you're
not wealthy, that's because you're lazy. If you can't afford status symbols to
prove your wealth it's because you're a failure as a human being. This is an
exaggeration, but it's what the mainstream media tells you and what the
billboards shout at you.

I'm not saying it's impossible to manage your funds well if you barely have
any. I've seen plenty of old widows in Germany be able to make do with welfare
because they were used to not being able to afford anything (or even
theoretically be able to buy anything if they had the money) throughout the
post-war period, but we're talking about people who've learned to cope in a
situation where it was entirely possible to freeze or starve to death even if
you did everything right. Luxury meant having a variety of food on the table
(or having spare tobacco for your own use, rather than for trading), not being
able to afford the latest iPhone.

I would also argue that HN necessarily isn't representative of "average
folks". The average HN user _is_ special. Not better, but different. There's a
disproportionate amount of entrepreneurs (yes, they are the _exception_ ) for
example. Plus, there's the survivor bias: if you're here, you probably haven't
found it an impossible task to keep out of poverty (even if you ever were
close to it). If you had, you wouldn't be here in the first place.

But the entire point is moot anyway. If everyone is able to engage in some
kind of critical thinking, self control and doing basic math, and still there
are a lot of people trapped in these cut-throat contracts, the average person
is _evidently_ not sufficiently able to avoid them (and if those things are
all it takes to do so, they are _evidently_ not as good at them).

But I think this isn't a question of facts, it's a question of ideology: I
think it's our responsibility as a society to keep people out of situations
where they become practically unable to act freely (even if they only have
themselves to blame). You seem to hold the opinion that if they screw up their
own lives, we have no obligation to help them and they only owe it to
themselves.

------
timedoctor
The attitude of renting or getting a loan for any consumer item is financial
suicide.

Why they don't buy second hand I don't know? You can go to an auction site,
get the same $1500 sofa for $500.

~~~
ceejayoz
> The attitude of renting or getting a loan for any consumer item is financial
> suicide.

When we moved into our house, we bought all our furniture on a zero-interest,
four year loan. It made a lot of financial sense to pay a fairly low monthly
payment and have the large amount of money available for investments.

~~~
mikeash
Similarly, I _nearly_ got a zero-interest loan on the car I bought last year,
but we changed our minds at the last minute when it turned out there was a
nice hidden discount for paying up-front.

I think better phrasing would be that _needing_ to rent or get a loan for any
consumer item is a bad idea. It's fine to take out a loan if you have the cash
anyway but find it advantageous to hold onto it, but if you're relying on
future income to buy the stuff now, it's a sign of trouble.

------
duckingtest
No "the poor", but "the idiots". The family described isn't even poor, but
they waste so much money trying to live a middle class lifestyle they live
seriously below their means.

You're poor if you have serious problems having food and a basic place to live
in at the same time, without spending anything on bullshit. If your problem is
'I can't afford this sofa', or a new ipad, you aren't poor, you just aren't
wealthy.

------
tsomctl
Other commenters are saying that people shouldn't buy it, a couch isn't
necessary. I disagree. I've worked at 10 hour a day jobs of physical labor,
where I come home too tired to do anything. Having a comfortable place to sit
to recover is essential. Leaning against a wall is awkward. However, the chair
I had was a 20 year old office chair falling apart. Super comfortable, even if
I had to tighten the screws several times a year.

------
kwhitefoot
I think the point several people have made about wanting a 'normal' life is
important. The relentless advertising of an unachievable life that American,
and other countries', media saturates peoples lives with must be a factor. I
am reasonably well off and have no money worries, live in a country where
differences between rich and poor are small. I could easily afford to buy a
USD 1500 sofa, I could even without any impact on my life pay the over USD 4k
that the woman in the article will actually pay. But in fact I have never done
either, the leather sofa I have cost me the equivalent of USD 100, in fact it
cost me another USD 50 to have it delivered. The point is that the sofa does
not make me feel that I am poor so I feel pressured to spend more money on it.
In addition it's simply expensive to be poor as several people have pointed
out, see Vimes Boots on
[http://discworld.wikia.com/wiki/Samuel_Vimes](http://discworld.wikia.com/wiki/Samuel_Vimes)

------
drcube
Except for mattresses, there is simply no reason to buy new furniture. I'm an
engineer, I had a house fire recently and will easily have the budget to buy
new furniture for my house after it is repaired. But I plan on shopping at
Goodwill, Savers and Craigslist. Because new furniture is not necessary. Why
would someone who is much poorer than me think otherwise?

~~~
kwhitefoot
I upvoted you but not because I agree with what seems to be the implication,
rather because I think it is an important question that gets to the core of
the problem. >Why would someone who is much poorer than me think otherwise?
It's, partly, because they are poorer than you that they think otherwise. The
mere fact that it is new is part of what makes it attractive and because poor
people often do not actually know how those of us who are well off actually
live they aspire to what they assume are the trappings of wealth.

------
chavesn
> _So Abbott and her husband walked into Buddy’s this past winter, hoping to
> replace the old sofa in their trailer, six years old, its wiring poking
> through the bottom, cutting gashes into the living room floor._

I once bought a couch set for about the same price, but yet, thankfully, I
could afford to pay for it up front. I got two loveseats and a couch for about
$1600.

Funny story -- 6 years later, all were in perfectly fine condition -- the
springs were NOT poking out the bottom, not cutting "gashes" in my floor.

I split up the set and sold them through Craigslist for about $950 total.

My total 6-year cost? $650, or $2/week for the whole set.

I'm not going to draw any broad conclusions on the wealth/capital/income gap
or privilege, or anything like that -- but the author does readers a
disservice to gloss over the poor assumptions that lead to many believing they
are "forced" to make these kinds of purchases.

------
johnnymonster
I would be nice to see businesses focus on trying to help people to a solution
rather than feeding their addiction. This business helping them buy material
things is just as bad as the corner street drug dealer. They are just dealing
legal items instead of illegal ones.

If a business model were to come along that would help teach them how to
attain what they want through financially responsible means instead of loan
sharking, I believe it would be incredible for the impoverished society.

I have been in this sort of situation and I know the mindset. You can not even
understand how to set goals, to figure out how to better your future! You have
no idea what to do, and these business prey on that mindset.

However, if you had a business that taught how to save for items you need and
want, how to set goals and put away money, it would greatly change these
peoples lives!

------
JoelSutherland
The same thing that happened to the family in the article is happening to the
commenters in this thread -- but in reverse!

Just as the furniture rental place likely never told the family that the
weekly-payment total would be $4,150, the article doesn't clearly show the
price the family was looking at: $57.64/week.

I'm much more sympathetic to their decision when looking at the two numbers
they were faced with: $58 vs $1500. A bad sofa on Craigslist is $200.

It seems like a good solution to the problem would be to require the $4150
total to be made explicit on a standardized disclosure form, not unlike what
you see on a home mortgage.

------
gyardley
The American educational system needs to do a better job teaching financial
literacy, it seems - and they need to start that education early, before
irresponsible people like this one drop out of school in ninth grade.

------
rbcgerard
Its interesting because:

1\. there is a logical reason the stores charge what they do("some 75 percent
of items are returned or repossessed within weeks of the transaction" Anyone
care to calculate what the interest rate should be on a loan with a ~75%
chance of default?)

2\. The prices that stores charge are not a "good deal" and therefore
increasing sales "hurts people"

3\. Shouldn't people be allowed to make decisions that may be against their
best interest - at least in the U.S. there is/was a national sense of personal
freedom and self determination

------
IanDrake
>Abbott and Donald smoked a cigarette in the bathroom and sorted through the
grim math

So they can afford cigarettes? I have a hard time feeling bad for people with
low income and expensive vices.

~~~
llamataboot
Smoking is an addiction, and it is highly correlated with poverty for a
variety of reasons, some of which I'm sure you can find if you step off the
personal responsibility high-horse for a moment.

~~~
MrZongle2
So at what point are the _individuals themselves_ responsible for their
actions? Or is it addictions, poverty, and other external and unavoidable
tragedies all the way down?

~~~
mikeash
The point is when you're talking about large populations as a whole.

It's like the saying that if you owe the bank a million dollars, you have a
problem, but if you owe the bank a billion dollars, the bank has a problem.

Here, if one person is stuck in poverty because of poor life choices, they
have a problem. If ten million people are stuck in poverty because of poor
life choices, we all have a problem.

Rather than point fingers and talk about "responsibility" and all the rest, it
would be much more useful to simply talk about why this happens (both internal
and external reasons), what can be done to help, and whether those actions are
worthwhile.

------
incision
Funny thing about being broke, it seems to come with an intense even
overwhelming desire to feel/signal otherwise in what are usually
counterproductive ways.

Where I grew up, everybody was pretty damn poor. Still, probably half my
neighborhood or more was beholden to Rent-A-Center for a dining room set or
couch. Most were ashamed to shop at K-Mart or even buy generic cereal.

That said, I think IKEA could do tidy business by targeting a slimmed down
catalog to the areas where rent to own thrives.

~~~
pinkyand
Basically, low status leads to a lot of stress.So unless the community as a
whole is educated towards non-consumer ways , everybody is in a trap.

------
pseudometa
This reminded me of how much more people pay for houses on loan vs with cash.
If you pay using a loan, you may pay double the cost by the time it is paid
off. The only plus side with a house is the possibility that the value will
increase and offset the difference some. No matter how you look at it, that
furniture will never increase in value.

------
comrade1
What's probably just as infuriating to some is that I notice as my wife and I
get older and get higher and higher incomes and assets it becomes increasingly
easy to spend less money.

As an example, we just bought the company car my wife gets that we'd been
driving for free for the last couple of years. We bought it at about 50% of
the new value, an significantly discounted from the used price.

There's also things like deferred compensation, pension payments, etc that
make it easier and easier for people with money to spend less and save more.

And related to the story, we never buy anything on credit. Not even the car we
just bought. It's cash or bank transfer, or if we do pay by credit card for
something it's paid each month. We keep our credit card limits quite low
though.

~~~
ominous_prime
Yes. It's amazingly expensive to be poor.

I have the luxury of using credit cards solely for net30 financing. Car loan
-- maybe if I'm fairly certain my investment account will return more than the
loan APR.

Without that cushion of liquidity, it's all too easy to slip into a cycle of
needing credit to stay afloat. Saving small amounts doesn't feel useful, so
you don't do it; and small charges don't feel like they will hurt you, so you
rack them up.

It's a societal problem as much as a educational one. I have no idea where we
go from here, but I wonder if social systems like basic income would help
alleviate the problem.

~~~
ryan-c
There's also the fact that, at least in the US, you can get credit cards that
will pay you to use them if you have good credit.

------
byEngineer
I invite all the downvotes, but my satisfaction comes from the realization
that on the bottom of your heart you _know_ this is true:

Why stupid pay $4,150 for a $1,500 sofa?

Because when I was poor I collected one from the street for free. It hasn't
even crossed my mind to go to a store when broken.

~~~
arenaninja
Did you have kids at the time? I don't think you would've been as comfortable
picking up a sofa potentially infested with who-knows-what and your kids
sleeping on it.

I've been poor too, but I had the distinct advantage of an education, which
made it clear that certain choices were better than others. Let's not forget
that not everyone enjoys that advantage (whether it's available or not)

~~~
orbifold
Simply don't have kids when you are poor. Also it is perfectly reasonable to
sleep on the floor in a sleeping bag/on blankets, maybe with some isolation
beneath you. It is also much more healthy than to sleep on a couch. I lived
most of my university life in a room with a desk, a chair and a mattress on
the floor.

~~~
arenaninja
Your rationality could save the world, if only you added some pragmatism to
it. Here's some things you have not considered:

* religion (the poor are more likely to be religious, most religions frown upon birth control) * abusive relationships (I've seen women go from comfortable living in their on home to being on welfare because after X years, their partners are abusive) * addictions * medical bills * onset of mental illness

~~~
orbifold
Religion and birth control are both a question of indoctrination by the state.
The Soviet Union and its satellite states managed to reduce religious belief
fairly effectively, in the Czech Republic ~70% are atheist / non-believers,
East Germany has similar numbers. They provided free access to birth control,
abortions and infant child care. Of course none of this would be possible in
most of the world, religious belief is too entrenched and there are no strong
ideologies left that are prepared to fight it.

