A new study shows lower income people in Kentucky actually pay more for everyday expenses than their wealthier counterparts.
The study from the Brookings Institution said low-income families are likely to have more expensive mortgages, higher interest rates on their car loans and costlier auto insurance.
The report also found lower income people, often pay more for their groceries, furniture and appliances.
We took a deeper look at the possible causes behind this situation and met a woman whose managed to live the American dream while defying these odds.
Christine Morgan and her family of eight, manage to stay debt-free. She said they live the American dream, minus spending beyond their means.
“People with low income think, ‘everyone has credit - I can too,’ so they try spending money to be like everyone else,” Morgan said.
Financial consultant and retirement specialist, Tony Walker said most Kentuckians can’t help falling into this vicious cycle trap.
“Banking lending look at these people’s ability to pay them back and as a consequence they charge a higher interest,” Walker explained.
He said the higher the cost, the higher the interest and the harder to get ahead.
“High interest will cost them literally hundreds of thousands of dollars over thier lifetime. People don’t just understand the high cost of money and high interest,” Walker said.
Morgan said many people don’t realize there are little things people can do to improve thier situation.
“It just takes time and you got to work at things slowly. You can’t decide to go out and do everything all at once,” Morgan explained.
In addition to being patient, Morgan said being true to yourself is the best way to be happy with what you have.
“Our best vacations, we’ll go to the beach and go camping for $20-a-night,” Morgan said.
For Walker, the best advice lies in the wisdom of the ages.
“The best thing to do is what Granddad did - don’t spend money you don’t have,” Walker explained.
For more tips on how you can better manage your money, visit www.perfectingyourwalk.com.