Is there a recipe on how to stop being poor?
If yes, I wish everyone to know it to put an end to their poverty
You hate being poor and perhaps you may wonder “Why am I poor?”
Luckily I experienced the condition of being poor to feel those who are currently poor
This occurred during the 2008 deep recession where I was laid off
I realized that my knowledge in my career was very shallow and I was not up to date
That’s why I couldn’t land a job till mid of 2011 so I had to work at Walmart with minimum wage
I still remember the same emotions I passed through as if they happened yesterday
That’s I will discuss below how to stop being poor and broke
Why are you poor?
There are so many reasons why you are currently poor
I will discuss here what is so obvious
There can be hundred reasons but main one are
1- You come from unequipped family
Actually I was hesitant about the above title
I did not want to say you come from poor family
Because there are poor families but educated ones
I cannot forgot Richard Kiyosaki in his famous book Rich Dad Poor Dad
I cannot forget this book, I recommend everyone to read it
The book’s slogan what the rich teach their kids about money that the poor and middle class do not
I felt the word unequipped or unprivileged both fit better
Unequipped in teaching you how to pursue your dreams
Or may be you lack the ambitions as you don’t see your parents successful
And so you don’t have a model to follow
2- You are poor because of your location
You are poor due to where you were born
I know an acquaintance who is a Vet
Back in his mother country where people there are poor
Only few of the rich people own pets so his career is completely useless
He immigrated to Canada and worked hardly on himself
Nowadays he is working in his career as a well known Vet
He is the same person but he just changed where he lives
3- Unfortunate tragedy struck your life
This can happen to anybody discovering a disease that can bleed all of your hard saved money to cure yourself
Medical expenses can cause bankruptcy to anyone
GOD forbids any unexpected health condition thing to occur that makes you spend all your money in hospitals
4- You made bad financial decisions
I have to admit I committed few bad financial decisions
Luckily I learned from my lessons and I moved forward
When I recently got married, we purchased a new car with 5 years car loan
I remember my car on the third year was not worth the full price
Meaning if I decide to sell it, its sales value will not cover the remaining installments
What do I do if you are poor?
I considered myself being poor one day
But I did not surrender
I believe what I will mention below is verified on myself
When I was looking for a solution on how to stop being poor
1- Educate yourself – horn your skills
I knew I was not up to date with my IT skills
Take myself as an example, any job requires certain skills
I worked on myself in a way that I used to record in my memory or on my cell phone the entire interview
Even when I was good at the technical questions, it wasn’t enough
I had to practice the human resources questions
2- Attend a college or diploma but don’t do it accumulating debt
I will not be practical if I tell you to go study 4 years of college
Look for a certificate, one year college or diploma that takes your career to the next level
3- Look for competitive opportunity
I heard a lot of stories of people working with minimum salaries only to find that they are worth more than that
Someone told me once that he got doubled his salary and his employer beat this offer by 10%
4- Always buy what you need and not what you want
You have to differentiate between your needs and wants
What you really need is something you cannot live without
Like Shelter, food and transportation, you need them to survive
But you won’t want Apple watch to survive – I think you got the idea
5- Fight falling in debt by all means
If it takes you to cancel your GYM membership and not to charge it on your credit card – I would ask you to do so
The debt cycle can drag you into poverty
All of your extra money will be sucked to pay your debt
6- Find a side hustle to make more money
There is nothing wrong if you look for an extra side hustle to make more money
You can drive Uber or Lyft or even join skip the dishes
I recommend to read the below
How to Make an Extra 1000 a Month From Home Doing Easy Side Hustles
How do you survive being broke?
Again I remember my experience when I was really broke making just minimum wage
What I learned when I decided to stop being poor helped me a lot nowadays
I would like to share with you what I did to survive being broke
Never give up and keep fighting
I have to admit living 3 and half years working with minimum salary kept me thinking
Am I going to live the rest of my life like that
I realized I am the same person who never used to face this kind of crisis
It was just the circumstances and not being ready for situation like that
When bad things happen to you, keep faith that you would be able to restore yourself
Sell belongings you don’t need
There is nothing wrong if you sell things you don’t need
If you look around you, you may find a rug or a watch you can get rid of them
I love Facebook Marketplace as my number one resource to sell and buy used items
Also I tried Craigslist and eBay but Facebook Marketplace can attract local buyers in your neighborhood to pay cash
Live below your means
Sometimes it happens that you lose your job or get bankruptcy
You have to assess your current situation and adapt yourself to live below your means
Mortgage or rent is number one issue to look at
It doesn’t make sense to pay high rent or mortgage with minimum wage
Also GYM membership would not be suitable if you are working paycheck to paycheck
Cut from your expenses
I am not referring to the fixed expenses that you cannot decrease like mortgage/rent and insurance
Here I refer to flexible cell phone plans or discretionary expenses like your morning take away coffee
You have to make few sacrifices to survive while being broke
Get rid of your debt
I know few will wonder how can they pay their debts despite being broke
Actually if you don’t decide to get rid of your debt
You are still be broke
The only way to break this cycle is to waive the debt that suck your income
Increase your income with side hustle
You may be working full time with minimum wage
It drains you and thinking about working another part time job is a nightmare to you
But you can look for a side hustle to make few bucks where you decide the time you want to work
I wrote a post on how to make 200 dollars a day with lots of ideas of income you earn from home
How to stop being poor and broke?
If you are serious to stop being poor and break the broke cycle
Then follow the steps below and have a strong will to change your life
Be positive and keep your faith
I know you may not like what I will say now but this is what I believe
Acting positive and believing in yourself is the only difference between rich and poor
Spending 3 and half years working with minimum wage could have made me stay like that for the rest of my life
Only I was acting positive and kept faith in GODThe only difference between a RICH person and a POOR person is how they use their time. (Robert Kiyosaki)Click To Tweet
Be accountable and take responsibilities for your actions
Before blaming circumstances or your family for not saving money for you
Perhaps you may be born from a poor family but take a look at your past actions
You should be accountable for any action you should have done it to improve your situation
The difference between any two human beings in their lives is the actions they take
Taking no action is an action by itself to stay where you are
Learn some financial knowledge
You have to learn what is liability and why it makes you lose money
Liability is anything that takes money out of your pocket
Also asset is anything that puts money in your pocket
I recommend you read my post about personal financial literacy
Once you understand difference between assets and liabilities
You try your best to increase your assets and decrease your liabilities
Set clear financial goals
Without a clear and written financial goals, it will be hard to achieve what you aim for
But why written goals, well without writing down your goals you have less chance to achieve them
We as humans are able to process things visually hundred times than imagining them
When you write your goals
- It helps you boost your motivation
- Helps you to stay focus
- Also it will reduce your stress level as you don’t have to keep everything inside in your memory
- You will be able to track your progress
- Aim to achieve bigger goals
The above is financial goals roadmap which comes with a bundle of all what you would need for managing your budget from my download page
Make an assessment of how poor you are
I was hesitant to talk about this solution as it would be useless if you use it without changing your situation
The solution here is to make assessment of how poor you are
Some people they discover they are not that poor
They possess gold and diamond jewelries to sell and make some money right away
As I said earlier if you are not planning to change your current situation then selling your possession will not stop being poor but it will make things even worse
Also beside your physical possession, assess your skills and talents
Perhaps you have a talent to make money from like painting or playing a musical instrument
Stick to a budget
Building your own budget is not an option here
You have to know and sort out your expenses and all sources of income
I always recommend budgeting for couples to help them save money
Now if you are looking on how to stop being poor then budgeting is a must do thing
Pay your bills on time
Paying your bills on time will avoid you unnecessary penalties and interest
For hassle free, I always use the below control your bills sheet and mark all my bills that are due on calendar as shown on the bills on calendar
I have the above sheets in my ultimate budget binder product page
If you really need these 2 sheets and you don’t want to pay for them – just email me and I will send them to you
Get rid of your credit cards – use envelope system
Unfortunately I realized it is impossible to track how much I spend when paying with credit cards
I know it is hard for many to abandon their credit cards – I heard stories that some decided to tear down their credit cards and replace it with cash envelope system
I am not here to judge if you should switch to the cash envelope
You have to decide if you are uncontrollable with your credit cards or you can tame yourself and force your spending to fit under your budget
Fight your debt
I call it here fight your debt as you have no other option
You have to list an item under your budget for the amount of money you want to assign to your debt every month
You know what, you pay this amount every paycheck and not at the end of the month
By doing that you guarantee to pay the assigned amount toward your debt
You can survive if you skip your grocery for one week or buy only the bare minimum
What will be worth is you lose confident in yourself being able to finish your debt
Cut expenses and practice living frugally
I though it was hard to cut expenses as everything I spend money on I cannot sacrifice losing it
But I was wrong, I was able to cut the cable and replace it with IPTV paying $30 annually
I gave up home phone and replace it with VOIP paying $2.5 monthly
Even I can get rid of it and keep my cell phone
I know it takes time to practice living frugally but it is really worth it
Because once you start to increase your income, the same man inside you will keep thinking frugally every moment in your life
Evaluate how worth you are in today’s market
Be honest to yourself and see how much you’re worth in today’s market
If you don’t judge yourself, others will judge you
I was very cynical to myself when I get an interview with written exam – I hated it as it was proving how I was delayed compared to my peers
It took me lot of time to work on myself and I was glad I did that
Time is money so stop wasting time
That’s really true especially if you have 3-4 hours after getting back from work
What you would use your spare time for
Are you going to watch TV? or hang out with your friends?
Or you would rather use some of your spare time to work on a side hustle
I am not against relaxing and meeting your friends
What I am asking is to be reasonable and give some time to improve your condition
Final thoughts on how to stop being poor
Working on the decision to stop being poor is the best thing you can do to yourself
Don’t ever think accepting your condition is a good behavior
Or according to your belief you show GOD that you are not chasing money
And you accept your fate thinking that this is what GOD wants you to be
That’s not true, GOD wants everyone to be successful
Remember what the bible says about the man who travelled and gave his three servants different talents
He gave his first servant 5 talents and to the second servant 2 talents and the third servant one talent
Even if you have only one talent, don’t hide it in the ground, go make profit out of it