Common Mistakes of the Poor

This is the second post in my Poverty Cycle series.

I live in a neighborhood in which most of the residents are struggling financially. Many factors play into the widespread local poverty, most of which are beyond the scope of this blog, but a big aspect of  it is that poor people start off behind in life, but their poor choices and attitudes often contribute to their getting mired in the quicksand of poverty and debt.
If this post seems overly critical of people, that is not the intention. The purpose of this post is to simply point out mistakes people might be making in the hopes that they'll be able to fix those mistakes and ease their financial situation.

Case Study of a Poor Family

A friend of mine with quite a large family simply cannot make ends meet. She and her husband are unskilled workers subsiding largely on charity and help from their parents.
I've shared countless ideas with her as to how she could free up some extra cash, but she hasn't been receptive to most. She simply has no time or energy to implement any changes in her life, as she is too exhausted from her job and taking care of her family.
In a recent conversation, she mentioned her salary and my jaw simply dropped.
This lady wakes up at 5 am so she can get herself and her children ready for school. She gets herself and the kids dressed, packs their lunches and school bags, takes her two youngest to their babysitters, and leaves with the rest of her children on the 45 minute long bus ride to the city, all by 7 am. She works from 8 am till 1 pm for the paltry sum of 2 dollars an hour, boards the bus back home, picks up her two youngest from the sitter, makes a quick dinner, feeds the family and takes care of the children and collapses into bed before 10 o'clock out of sheer exhaustion.
Understandably, this woman has no time, energy, or willpower to do anything to save an extra dollar. With all that's on her plate, she is simply spent. Even small money saving ideas are beyond her capabilities as she doesn't even have the mental energy to change what she's been doing until now.

In many ways, I feel that this woman typifies the mistakes of poor people. The following list is largely based on things I've noticed about her situation, but are commonplace in the lives of most of the poor people I know.

Mistakes of the Poor

Spending Time and Money on Foolishness
No, wealthy and upper class people aren't the only ones who do this. Too many poverty stricken people still allocate their resources inappropriately, making their life harder because of it.
  • Non Profitable Jobs. If I were making 2 dollars an hour at a part time job before paying for childcare, bus fare and other job related expenses as in the aforementioned story, you betcha I'd be out of that job in a heartbeat. Simply put, after all's said and done, you've just exhausted yourself without seeing any of that extra money. Every last cent has gone to pay your babysitter and you end up paying more out of pocket to pay someone else to do everything that you've got no energy to do, like paying for cleaning help, ready made food, instant things, etc.

    Unless you truly are making a decent amount of money or your work gives you a great sense of fulfillment, in many situations it is simply not worth it to work (especially if you're a mom of littles).
    Fortunately, most people do make a little more than 2 dollars an hour at their jobs, but even then it pays to evaluate how much you're really spending on work related expenses and how much extra you'd be able to save if you stayed home in comparison to how much money you bring in from working.

    If you hate your job, it exhausts you, and you're bringing in pennies, it may be worthwhile to quit so you have the energy and the head space to devote to tasks that can really save you money.
  • Vices. Money spend on addictions and bad habits can insure that you always stay in a bad financial situation. Cigarettes, alcohol, drugs and gambling are all outrageously expensive, especially if this vice is one you indulge in regularly. Easier said than done, but quitting these bad habits may be the first step in getting out of your financial trouble.

    People often get hooked on these bad habits because it is one of the few things that helps them escape the harsh realities of their life, its their coping mechanism. Whether or not vices are a healthy way of dealing with issues is beside the point- vices are simply a money suck. To make it easier to cut these expenses vices out of your life, it may be worthwhile to focus on making your life be a happier one so you don't feel the need to escape. (Frugal Babe wrote a great post about creating a life that needs no escape that you might want to check out for some inspiration.) You may decide to quit that job that is just causing stress and isn't bringing in any extra cash, or to kick your financial issues goodbye by taking the reigns on your spending so you at least don't have the added financial stresses making your life more difficult. To ease your stresses, you also might just need to do something about those pesky Joneses.

  • Keeping Up With The Joneses. Always feeling the need to have the latest and greatest things can be deadly for your finances. Keeping up with the Joneses is an exercise in futility, as the Joneses are always getting newer, better, and more expensive things. Try working on appreciating all the blessings in your life and all the things you do have instead of spending all  your hard earned money in a competition in which you can never will win.

    I'm happy to live in a community where there is little to no pressure to keep up with the latest fads and where materialistic pursuits are put on the back burner. If you find that the Joneses are in control of your community and are apt to make your life miserable should you opt out of playing their one-upmanship game,  it may be time to move.

Self Defeating Mindsets
I've touched on most of these before, but by keeping certain attitudes about money spendings and savings, poor people often have a hard time improving their financial situation. The following are attitudes that in most cases should be changed if one wants to make any headway in their quest for financial security.
  • Entitlement. When I've questioned people about their spending habits, I've heard people justify their spending money on nonsense because "I deserve it!" Honestly, who cares? Yes, people born with a silver spoon in their mouth may be no more deserving of luxuries than anyone else, and you may feel like you deserve pampering just as much as anyone else.
    You know what? I also like pampering and luxuries. (I think you'd be hard pressed to find someone that truly doesn't.) But priorities need to be made. Electric bills, water bills, mortgage needs to be paid. You may feel entitled to luxuries, and if you can afford them, then go ahead. But if you are having trouble paying your bills but still insist on spending money on luxuries like fancy professional manicures and pedicures, you may have found out one of the main reasons you're struggling financially.
    This ties in with what I wrote above about the Joneses. Stop looking over your shoulder at what your friends and neighbors have. Appreciate what you do have, and realize that feeling the need to satisfy every desire can get you into trouble.
    Feel the need for pampering? Find a low cost way of treating yourself so you can still get this enjoyment without breaking the bank.
  • Hopelessness. If you say you can or if you say you can't, you're right. Don't ever assume that the situation is so terrible that there is no use in even trying to scale down, thinking that it won't make a difference in the grand scheme of things. Saving Money in Real Life wrote a great post about the problem with saying "What's another $1,000" that addresses this issue.
    If you remain optimistic that things will improve, they probably will. By giving up hope, you're only hurting yourself.
  • Being Wasteful With Pennies. Those who are careless with seemingly small amounts of money usually end up spending lots more money in the long run, because they don't realize that little pennies add up. Remember, I'm able to get by on a lot less than most other people simply because I don't discount the value of pennies.
  • Resistance to Change. Keeping "business as usual" will keep your finances as usual. A change in actions is the only way to change your monetary situation. Too many people are afraid of doing something different and rocking the boat, not realizing that their boat is heading nowhere good and getting on a new boat in a different direction is what needs to be done.
    Be adventurous. Serve vegetarian meals during the week even if you've always been a meat family. Start shutting off appliances when not in use and line drying your laundry. Use cash only when shopping and perhaps even put back some extras before you get to the checkout line.
    Success is attainable, so long as you're willing to change!

Knowledge is Key

For all that this post may seem to be criticizing poor people, the largest issue most poor people have is simply lack of knowledge. Some people simply have no idea that there is any different way, as they've never been taught wise financial habits. Other people just don't know where to start when they want to cut back.
That's where you come in.
You've got knowledge. You read after all, already putting you ahead of the game. Teach people what you've learned. Spread the wealth, share ideas that you've learned so that others can get a hold on their financial situation and make changes.
I'm trying to spread the word that financial change is possible, that you can get by on very very little amounts of money if you think outside the box, and fortunately, I've been privileged to find a receptive audience to teach. I'm always willing to learn new tricks, as there is no limit to knowledge.

Seriously, if you know some people struggling financially, help them out. Educate them. Most people are very receptive to hearing new things, and if these changes are simple enough, they usually are willing to try them out.
That lady I mentioned at the beginning of this post?
I thought at first that with her lack of time and energy, she was a lost cause. I was mistaken, and in the time I've been friends with her, she's changed a lot of her spending habits, cut back on waste, and was more adaptive to change, simply because I gave her one thing she didn't have before- the knowledge that even she, with no time or energy can definitely save money.

Knowledge and an openness to change, in addition to being willing to work on the aforementioned mistakes can usually help a poor person get out of their rut and stop the poverty cycle in its tracks. Hopefully, with diligence, the hard work will pay off and the poor person will achieve financial freedom and security.

What do you think about my list of mistakes that poor people make? Do you agree with them? Disagree? Have anything to add to the list?
Have you ever had the privilege of teaching a poor person some tricks to help their financial situation? Did you find people receptive to your sharing your frugal knowledge with them?

Penniless Parenting

Mommy, wife, writer, baker, chef, crafter, sewer, teacher, babysitter, cleaning lady, penny pincher, frugal gal


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  1. I love your blog and totally agree, but I always seem to be surrounded with people who don't want to be frugal! I had a friend for years with a large family and no money and her answer to poverty seemed to be regularly she and her husband would stop working and mooch off me, their family, even the kids....when she told me that despite heavy debt husband was taking early retirement I told her point blank I had no more money to help out. Haven't heard from her since!

    What shocks me about some of the people I know is just how much money they have in reality- higher salaries than most yet massive debts and servicing debt constantly. Makes no sense.


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