[randallsquared]

Also, people in these situations use loans to pay for things like repairs, or for other things they need to buy if the paycheck has to go to repairs. If you've ever wondered why anyone would use a point-of-sale loan for groceries, this is one reason: to free up cash for something urgent that they can't use a loan for, like car repair from a shade tree mechanic in the neighborhood.

Since there are often multiple things stacked up that are slightly less urgent that you might expect they'd use savings for, there's no way in this life to get ahead enough to have savings. Something will always come along (if not for you, for your family or a close friend) that you must use those savings for, should you have them, but which you could scrape by without or using a loan if you didn't have savings. This results in a lot of poor people having no habit of savings or aggressively paying down debt, which imparts difficulty in climbing out of this cyclic trap once they do get a better job.