As a follow up to the June 25 post, here's a little more information about businesses that target low-income families and potential alternatives that can save a lot of money. (For a recap of how we got on this topic, check out this Business Week article.)
Similar to a payday loan, instant tax returns from tax preparation companies can be an enticing and quick way to get back money. Low-income workers are often entitled to the Earned Income Tax Credit and can get a pretty substantial amount of money back—but if they get their refunds instantly rather than waiting a week or two, they can incur substantial fees. One available alternative for people who just need to file simple 1040 forms is the Athens Fast & Free Tax Assistance Center, operated by Job & Family Services. All Athens County residents, no matter their income, can get their taxes done for free from this service. With E-Filing, returns come back in as little as a week—and you get your ENTIRE return, with no fees deducted.
Another need that often arises in low-income families is for furniture and appliances. A $700 refrigerator is almost always out of the question when income barely covers rent and food, so paying $17.99 a week for a Hotspot refrigerator from Rent-2-Own seems like the only reasonable measure. Compare the refrigerator's posted retail price of $709.99 the total 78 weeks of $17.99 payments you'll make, though, and it's not so much of a deal: $1403.22. That's just under double what that refrigerator is worth.
Rent-2-Own's slogan is "Because we should all have nice stuff." This clearly encourages those who can least afford it to live beyond their means. Yes, in an ideal world, it would be great if we could all have leather recliners and dishwashers—but in the real world, where we don't all even have food on the table every night, it's ludicrous to encourage people to buy what they really can't afford.
The alternatives aren't always easy, but that's the way life is for low-income families. Thrift stores such as ReUse Industries and New to You are often inundated with furniture—especially futons, after the students move out at the beginning of summer. It may not be a pine bunk bed, but it's somewhere for your kids to sleep that doesn't come with the instability of a potential repossession if you can't pay the eight bucks in week 43 of your payment plan. Even local charitable organizations like Good Works offer—with limited resources, nevertheless—the chance for people to volunteer in exchange for furniture and appliances.
Computers are another thing people buy on payment plans at rental stores. Certainly an important tool for homework, job searching and other household uses in the modern age, computers don't come cheap. [Please see comments for a correction regarding this eligibility information. Thanks!]Job & Family Services offers FREE computers, to below households with children at or below 200% of the poverty level and be TANF eligible, which can also mean cooperating with CSEA or pregnant, along with training and a year's internet connection. Since its founding in 2001, the program has provided more than 2,000 computers to local households.
The BW article describes the increasing struggle low-income families are experiencing more and more across the country, and Athens certainly isn't immune from this problem. There are few easy answers for alleviating this problem, but it starts with a need for financial literacy and an increased awareness of just what strings are attached to seemingly great offers.