The $3000 Plan

After reading the many comments on the Being Poor thread mentioned below, one that stuck out was commenting about how expensive it was to being poor. There are fees to cash checks, monthly fees at the bank because you don't meet the minimum balance, huge charges for bounced checks, late fees on bills when they're late due to unexpected expenses, and so on. One rents furniture because one can't get enough money together to buy. If one has a credit card, there are large interest charges on the balance one is likely carrying.

In short, all it takes is a little bit of bad luck to fall into a hole one can't dig out of. If only one had a bit of extra money, things wouldn't get worse.

A charity called Modest Needs seems to be following this philosophy.

Here's an idea to help the working poor. Take a hard-working family, and give them enough to dig them out of their hole and provide a cushion. Pay off any credit cards; catch them up on utilities and other bills; set aside a sum for first month's rent, last month's rent, and security deposit for a cheap apartment; give enough to buy some secondhand furniture and clothes; and leave enough so that one can have a checking account without fees, and enough to cover an unexpected expense or two. Depending on how big the family, and how big the hole is, that could be a fairly small amount, perhaps $3000.

In three years' time, the family must pay back whatever amount was given.

Barring serious medical expenses or the like, they should be able to pay back the $3000 Plan. That is, of course, if the reason for the original problem was bad luck. If it were bad decisions instead, chances are they will again be in dire straits.

This sounds like a great challenge to test competing viewpoints. Let's find a rich liberal to endorse the bad luck theory, and a rich conservative to endorse the bad decisions theory. The liberal can personally fund the $3000 Plan for 100 families he or she deems worthy and trustworthy. For every family that pays back in full in three years, the conservative makes a donation to the liberal's charity. For every family that can't, the liberal makes a donation to the conservative's charity.

How about it?