When I was a financial planner in New York City, I reviewed the finances of nearly 1,000 individuals and small businesses. While there were people who made bad decisions, stupid decisions, or created debt to finance consumption, the bottom line was that most of them simply didn’t earn enough to live. If they had made good decisions and lived frugally, they would still fall short month after month. When you realize that this is the situation you are in, with two parents working full time, and you still slip deeper and deeper into debt every month, why not just use credit to buy the plasma TV or go on holiday at Disney?

Living in Southeast Asia, I am confronted with poverty on a daily basis. But, there is a Western poverty in developed countries that needs to be addressed. Very few Americans are suffering from lack of food, but a significant percentage earn less than the basic minimum needed to live.

Back in America, in the 1980s, when a friend of mine, call him Jawa, was in his early twenties, he was extremely poor, living hand to mouth, pay check to pay check. Working at a grocery store, he earned slightly less than it cost him to live. One day, he was late for work, but needed to stop at the post office to mail his financial aid paperwork so he could pay his next semester’s tuition, eventually finish college, get a decent job, and not have to suffer financially and spiritually anymore.

Not finding a convenient parking space for his 15 year old car, which barely ran, Jawa parked illegally. The line in the post office was longer than expected, and while Jawa was waiting in line, his car was towed. He came outside the post office and discovered that not only was his car gone, but now he had no way to get to work.

Jawa called his boss and explained the situation.  His boss was angry, but he told Jawa to come in as soon as he could. Without a car, the only option to get to work was to take a taxi. The taxi fare would have been $20. Jawa earned $4.50 per hour. His shift was scheduled for six hours. So, after taxes, Jawa would break even. And of course, at the end of his shift, Jawa would still need to get home, which would put him $20 in the hole.

Jawa looked in his wallet and found that he had three dollars more than what he had thought. He had eight dollars. Not seeing how he could get to work, Jawa began walking home, which was closer. By the time Jawa walked the five miles back to his home, it was too late to call the towing service and find out about his car. The next morning, he woke up and called the impound lot. The cost of releasing his car was going to be $30 for the fine, $50 for the tow, and $50 for storage. Jawa needed $130 to get his car back.

Of course, he had missed both school and work that day with no way to get around. He had $80 in the bank, but in those days before ATM machines, getting the money would necessitate going to the bank, which would be $30 round trip in a taxi. This left Jawa with $50 toward the $130 that he needed to get his car out of impound. It was a Wednesday, and Jawa would be paid at his job on Friday. He earned $4.50 per hour, worked 30 hours per week, and he would get a check for about $100. The check, plus the $50 he had would be almost exactly enough to get the car back. So Jawa decided to wait till Friday, get his check, and go pick up his car.

By Friday, Jawa had been fired from his job for missing work. When he got his check, that evening, he wasn’t able to cash it, because the banks were closed. So, he had to wait till Monday. Early Monday morning, Jawa went to the bank, cashed his check, took out his other money, and went to the impound lot. At the lot, he paid his fine and tow bill. But when he went to pay the storage bill, he found out that the fee was $50 per day. The car had been there since Wednesday, so the fee was $300.

Obviously, Jawa couldn’t pay the bill. He also couldn’t get his car back, so he had no transportation to go look for a new job. The bill went into collections, and eventually, Jawa found himself the defendant in a legal action. He missed more than three days of classes at university, so he received failing marks in several of his courses. Because of his poor academic performance, his financial aid was discontinued, and he had to drop out of college.

Eventually, Jawa found another minimum wage job. It took him over an hour to walk each way, but he looked at it as a temporary problem he had to overcome, just one more obstacle, on the road to graduation from University.

During the frictional period that it took him to find a new job, Jawa failed to pay rent twice. He begged the landlord not to kick him out. The landlord was sympathetic and agreed to accept late payments when Jawa received his first salary from his new job.

When Jawa’s first pay check arrived, he found that his wages had been garnished by the impound lot. Although he had worked full time, plus over time, his check was less than $80. And, with late charges, interest and penalties, it was going to take months to pay off the debt to the towing company.

Jawa’s landlord was unimpressed with the $80. Jawa lost his apartment.

Getting a new apartment was an impossibility, because he would need to put down first and last month’s rent plus a damage deposit, money he simply didn’t have.

Then a lot of other stuff happened, and Jawa became an author, so he could live in a dignified poverty for the rest of his life.

Jawa was a relatively smarty guy, from a decent family, and through a chain of unfortunate circumstances, his life was almost ruined. How much more difficult must it be then for people from broken homes or ghettos, people with children or with a criminal record? A large percentage of the American population lives, hanging by a very narrow thread, which could break at any moment, setting them adrift, slipping into the oblivion of those two relatives, homelessness and hopelessness.

Recently, I have developed an addiction for the Judge Judy TV show. What I love about the show is Judy’s sense of justice. But I also see the show as a look into the lives of everyday Americans. Everyone on the show is not necessarily poor, but what I often see is that people behave immorality for relatively small amounts of money, and I have to believe that they would have behaved better if they weren’t living so close to poverty.

I think that many people have a moral compass, and would behave better, more fairly, if they had more money. For example, two friends go out for lunch. They decide to split the bill evenly, although one of them ordered an entree which cost fifty cents more. This is normal and moral behavior. When you are with a good friend or relative, then you think, no worries, next time, I might be the one who spends more and it will even out. But in cases where people are barely earning enough to survive they don’t apply that type of reasoning. Every debt, every contract, every discrepancy becomes a fight, results in litigation, costs more money, and often destroys personal relationships.

In a recent case that I saw on Judge Judy, the plaintiff, X, sued the defendant, Y, for several hundred dollars. Y had borrowed X’s car and wrecked it. Then the car was impounded and destroyed. So, X felt she didn’t need to pay Y, because the car was gone. Obviously, Judge Judy said that Y had to pay X for the car. Next, X continued the suit, saying that, because of the fines and fees associated with the wreck and impound, X missed payments on his insurance and rent, and incurred late fees and monetary penalties. Judge Judy basically said, you can’t sue for a chain of events. You can only sue for direct costs or direct losses.