5 Easy Steps to Being Poor

What is poor? Just a few of the dictionary definition indicate that it is “lacking material possessions”, “of, relating to, or characterized by poverty”, “Meager”, and/or “small in worth.”  Others think it is noble to be poor and ensures you a place at the pearly gates. Some say it’s the amount of money you earn. My 20 year old earns less than $10,000 a year and yet lives on his own, paying rent, utilities, gas, food, etc. Being poor is not the amount of money you make, but what you are choosing to do with it. Time and time again we hear success stories of families flourishing on what the government says is poverty level, yet they pay their bills on time, they provide for their families and manage to save a little. They may not have everything they WANT but they do have everything they NEED. What differentiates them from the actual poor is how they view money, how they manage their money and the financial decisions they make. They do not follow the steps listed in this article.

Being poor in America today is easier than you thought...we have come up with 5 easy steps that will guarantee that you and your family are/remain poor. Follow them and you can be assured that your dreams won’t come true.

1. Do not look at the cost of items you purchase in terms of total cost of time and money. So many times we make emotional purchases that in the long run cost us more than we ever imagined. Buying on time, using credit to purchase items always cost more than the price tag lists.

1. Buy items on credit terms for as long as the creditor will allow. We look at our purchases in terms of the monthly amount, we seem to want to make the payment as small as possible, to fit our monthly budget and again don’t look at the bottom line, final number as to what that car, TV, house, sofa, etc. really cost.

1. Save just to spend it.  Saving money in a 401K plan, mutual fund, money market account, saving account, need to have a purpose and should not be taken out for any other reason. We advocate that families need to set money aside for upcoming expenses and this should be in an account that has easy access with no penalties to withdraw; it only comes out when the bill comes due. Retirement accounts are for retirement only, not for a vacation, new furniture, car, etc. It should never be touched until you reach the goal that you saved for...retirement.

1. Spend money as you get it, don’t have a budget. A budget is a financial plan to succeed! We don’t see this valuable tool for what it is, instead many view it as liability, a burdensome. You will never succeed financially if you don’t know where your money is going and if you don’t plan your spending.

1. Give money away. When you have a limited income you have no business loaning money to friends, family etc. and/or co-signing for others. Remember the old saying... “No good deed goes unpunished.”  You also should not be giving your hard earned cash to your Madison Avenue creditors in the way of interest on your debt.

If you think that being poor is not the lifestyle for you then all you need to do is buy items you actually need/use, buy these using cash and not on credit terms, have savings/investing plan and follow it, know where every penny comes from and goes to, lastly don’t loan money you can’t afford to flush down the toilet and never sign your name for someone else’s spending.