Being broke is a temporary condition. However, being poor is a mindset.
We can often be broke and experience financial hardship because of poor financial decisions and bad money management.
On the other hand, remaining poor is rarely because of one action. It’s more about your attitude and mindset toward money, along with a mix of other causes.
If you have the necessities (a shelter, clothes, food, and a little in savings), and you wonder, “Why am I still poor?” this list of reasons and tips in the post would offer you a good start.
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Why You May Be Poor: You Want Everything Immediately
Wondering “why am I so poor?”, The “I want it now” mentality might answer your question.
Meaning: You can’t wait; you always want everything NOW. And this mentality can keep you down financially.
It’s also not uncommon for people who havenice-paying jobs and end up broke because of instant gratification.
For example, When you see the new selection of designer handbags, you buy it right away instead of waiting for holiday sales (50% off or more) or pausing for 30 days to reconsider the value of the item that brings to your life.
Then you end up taking high-interest credit card debt because of overspending. The worse thing happens when you only pay the monthly minimum payment on your debt, as it might take years to get out of debt.
Not only are you paying the original balance, but also you are paying thousands of dollars in interest.
You should use compound interest to your advantage (earning interest with investments), not the other way around (paying interest on debts).
If you want to stop being broke by the end of every month, learn how to stop overspending on impulse buys, make conscious spending decisions, and practice delayed gratification.
Don’t sabotage your future financial life with unrealistic expectations. Instead, embrace delayed gratification for a better financial reward later – the end of being broke (and poor in the long run).
Also read: Why You Should Try A No-Spend Challenge And How To Do It (You haven’t tried yet)
Why You May Be Poor: You Are Wasting Your Precious Leisure Time
Why am I poor?
Perhaps you are not utilizing your free time to make additional money.
We all need some downtime to relax and do things that we enjoy. That’s perfectly OK.
But you can optimize your free time if you are not satisfied with your current financial condition.
🌟 “Your success will be in direct proportion to how you spend your ‘free’ time.” – Mike Dunlap
Whether it’s learning a new skill to advance your career or starting a side hustle to earn more in your precious free time, you are making yourself better than yesterday.
Even if you spare 30 minutes or 2 hours a day to improve yourself and learn something new, you will see a massive difference within months.
🌟 “The more you learn, the more you earn.” – Warren Buffett
Sidenote: I usedmy free time to create this profitable blog. If you want to know more about how I did it from scratch, check this post.
💡 Important: Be a lifelong learner if you aim to get ahead financially.
Why You May Be Poor: You Worry Too Much About What Others Think Of You
Why am I poor?
Dave Ramsey’s quote could give you a hint.
🌟 “We buy things we don’t need with money we don’t have to impress people we don’t like.”
Have a look at the items you have bought lying around your house.
Do you really need them? Or do you only buy them to impress others that you don’t even care about?
When you are struggling financially, those people whom you want to impress won’t come to support you financially.
Do yourself a huge favor; instead of looking rich, build long-lasting wealth to be rich.
Focus on what you want to achieve in life. Ask yourself, “what truly matters to you and makes you happy?”
When you shift your mindset, your question (Why am I still poor?) will change (What should I do to stop being poor?).
That said, it’s ok to spoil yourself with quality products once in a while within your budget. By doing this, you are being mature, responsible, and realistic.
Why You May Be Poor: You Are Surrounded By People With Poor Money Mindset
Ever heard of “opposite attracts?” It might not apply to wealth creation (similarity attracts).
🌟 Jim Rohn once said, “You are the average of the five people you spend the most time with.”
Like it or not, we influence people around us and are influenced consciously and subconsciously by them.
For instance, if your friends are big spenders and often broke because of overspending, you are more likely to be affected.
However, if your close friends have good spending habits and a positive money mindset, it’ll be much easier for you to get your finances in order.
You can choose who you want to spend time with, so choose them wisely.
Why You May Be Poor: You Spend More Than You Earn
Overspending is the easiest way to end up poor.
It’s tempting to use the future money you don’t own (i.e., credit card) and go crazy with spending.
Looking at what you have spent in the past three months and how much for each item, you will know the number that keeps you broke.
- eating outs
- premium memberships
- clothes, shoes, and bags
Want to put a stop to being poor?
Having a simple, quality lifestyle goes a long way in helping manage your money effectively and build wealth.
Why You May Be Poor: You Overspent On A House Or Car
Have your heard of house poor and car poor?
Meaning: Individuals spend too much of their total monthly income on a house or car that they can’t afford.
Not only will overspending on a house or car deplete your savings, but also it will affect your overall (physical, mental, and financial) health.
So, how do you know you have overspent?
If you spend more than 30% of your take-home income on your rent or mortgage, that is a warning sign. (source)
And if you spend more than 10% of your gross annual income on the purchase price of a vehicle, you are robbing yourself of financial freedom, reports from CNBC.
Give yourself more financial breathing room by cutting out these expenses for good.
You might want to sell your car and house. Then, buy a used car and downsize your home to quit being poor.
Imagine how much money you could save. That’s the amount of cash you can use to build wealth.
Why You May Be Poor: You Don’t Know Where Your Money Is Going
Don’t know where your money is going?
That might be the reason why you are in the viciouspaycheck-to-paycheck cycle and stay poor.
If you have a budget, you will know where you stand financially and can plan where you want your money to be.
Budgeting gives you a better view of your overall finances and helps improve the wealth of your life.
Learn how to budget your money effectively to take control of your financial situation andavoid being poor.
You can choose a budgeting method that suits your personality and personal financial needs so that you can stick to it.
For example, if you budget $500 for food this month but end up spending $800, that’s not an effective budget as you aren’t able to follow it.
💡 Note that it’s not about how much you have in your bank account initially. It’s about planning how and where you will use the money you have to ensure every hard-earned dollar is well spent.
Why You May Be Poor: You Have Too Much Debt
Why am I so poor?
Maybe you are buried in high-interest debt, which causes financial insecurity. Debt can make you sick and ruin your life.
How poor are you?
Find out how much debt and interest you need to pay back.
Numbers don’t lie. The compound interest is the real wealth killer. That’s also why the rich get richer, and the poor get poorer.
Take a deep breath when checking the figure and devise a debt repayment plan to aggressively pay off your debt if you want to turn your financial situation around.
If you are not using a credit card to your advantage (i.e., accumulating more debt), replace it with a debit card or cash.
In the meantime, build an emergency fund with enough money for the pesky emergency bills to keep you away from being broke.
When stressed and desperate, it’s easy to make poor financial decisions (e.g., take credit card debt).
Once you eliminate debt, you can work toward other financial goals and avoid being poor.
Further reading: Is It Better To Pay Off Debt Or Save First?
Why You May Be Poor: You Want To Get Rich Quick
When focusing on getting rich quick, it’s easy to make BIG money mistakes.
This mindset could make you poor, as wealth creation doesn’t happen overnight.
For example, some people might rush into the stock market without investment knowledge and end up poorer than before.
Get rich slowly and stay rich forever.
Why You May Be Poor: You Ignore Financial Literacy
Why being poor isn’t about the money?
Money, as a tool, is NOT guaranteed to help an individual stop being poor.
If people don’t know how money works and how to handle their finances, it’d be hard to get out of the financial hole that they’re in.
That’s why financial literacy plays a significant role in financial health.
Whether using your credit card responsibly or choosing the most profitable investment product, you need the financial knowledge to make wise money decisions.
Although financial education is not often taught in schools or at home, you can use the help of the internet to improve your financial literacy.
Read personal finance blogs and books, take online courses, watch videos; you have options.
Recommended reading: The Total Money Makeover: A Proven Plan For Financial Fitness (Dave Ramsey)
Why You May Be Poor: You Don’t Make Money On The Side
If you live on one income and struggle to cover your daily expenses, you can feel poor.
Consider creating multiple sources of income to stop feeling poor.
Suppose a pay raise is not possible in the foreseeable future. In that case, you can still polish your skills and acquire additional qualifications so that you can ask for a raise when an opportunity arises.
Picking up a part-time job with a competitive wage is also an option to increase your take-home pay instantly.
Luckily, it has never been easier to increase your earnings online than ever before.
The earnings from a side hustle might exceed your full-time salary over time. It also gives you more financial security and great confidence to quit a job (you hate).
Don’t hesitate to explore money-making opportunities that fit your personality and talents.
Complete Simple Surveys To Earn Extra Cash Today
Want to make fast cash?
Take surveys from legit survey sites to make extra money in your leisure time.
You can get paid by answering simple surveys on websites like Survey Junkie. This could help you set some money aside or pay part of your daily expenses.
👉 Did I mention it’s 100% free to join? You can earn cash or FREE gift cards (your choice) immediately.
Why You May Be Poor: You Don’t Cut Back On Spending
Do you have expensive habits that kill your budget?
You can analyze your spending patterns and cut unnecessary expenses by reviewing your budget.
Look for ways to save money and increase your contributions to your savings account gradually. Whether you are saving for an emergency fund or your retirement, an automatic transfer is of great help to avoid skipping a contribution.
If you need some motivation and help, take advantage of Trim (a clever personal finance robot). He can keep track of your spending automatically and cut down on your bills without any effort on your side. And it’s FREE to sign up.
Save Money To Stop Being Poor
Here are a few things you can do to save money and improve your financial situation along the way.
Buy In Bulk
Buying in bulk is one of the easiest ways to save money down the road. Don’t be afraid by paying the big bucks upfront.
Do a little math to find out how much money you could save in the long run. I bet you’d be surprised.
Note that not all products are ideal to buy in bulk (such as fresh fruits and vegetables), especially if you are shopping for one, but you can keep an eye on non-perishable items (like meat and toiletries).
Plan and buy in bulk instead of paying the full retail price.
If you want to save even more money, try these tips.
– Negotiate your bills. Trim can do it for you.
– Shop around for better deals and use coupons.
– Choose the best times to buy (e.g., major holiday sale times).
– Shop nonbranded products to halve your bills.
– Buy from local markets.
– Get a cheaper cell phone plan.
– Reconsider your cable service.
– Unsubscribe from emails and stop buying more than you need.
– Cancel unused subscriptions and find cheaper alternatives for the needed ones.
– Cut back on eating outs and start meal planning to avoid temptations (buy for convenience). I recommend the $5 meal plan if you are new to meal planning.
– Find more cost-effective alternatives for your needs and wants.
– Save money for your next big purchases with these adult piggy banks.
– Pay yourself first whenever receiving a paycheck and save for your future.
– Be completely honest about your financial condition with your partner.
This list goes on and on. Trust me; you can save money if you dig into it.
Imagine how much money you could save if you take some or all of the tips above.
– How To Stop Overspending To Save Money (#6 is SO powerful!)
– How To Break These Bad Money Habits That Keep You Poor (#3 is making most people broke.)
– Easy Ways To Save Money On Groceries (Save $230+ Per Month)
How Do I Stop Being Poor?
Constant financial struggle is stressful.
However, excessive worries and fears won’t improve your financial situation.
Instead, find out what causes you to stay poor to improve your financial situation and have a decent living standard.
Now it’s time to take responsibility for your current financial situation and make a change if you are tired of saying, “why am I still poor?”
- Reduce your spending
- Get out of debt
- Form good money habits
- Start saving money
- Make more money
- Build wealth and say goodbye to money problems
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