Posted on 09/30/2014 11:31:19 AM PDT by SeekAndFind
I read over Kathy Shaidle’s piece on the ways in which one can stay out of poverty. While a lot of the poor lifestyle decisions she points out make sense for avoiding poverty, such as finishing high school or not having numerous kids while a teenager, or even avoiding smoking, my experience as a therapist has taught me that education on how not to be poor is an important component for helping people to avoid poverty. Let me explain.
Most books like Peter Thiel’s Zero to One: Notes on Startups, or How to Build the Future tell one how to get rich and become the next billionaire. However, that is a pipe dream for most people, given that there are only about 2,325 billionaires in the entire world. What we need is more training on how not to be poor, a much more attainable goal. Yes, large life decisions can make one poor, but small, educational steps can make people capable of using money to provide a better life for themselves and their families.
Over the years, I have dealt with clients who lived in bad circumstances. They were depressed and often broke, living in a bad area which caused their depression to worsen. When they would come into any money, they quickly spent it on unproductive items or gave it to other family members, rather than learning how to use small amounts of money to slowly turn things around. Many had no bank account, no credit, and no idea that going to the local payday loan place was like adding fuel to a fire. In short, many people simply do not understand how to use money to improve their life and, in turn, improve their mental health and health in general.
I would start by teaching a client how to save money each month, how to go to the bank and set up a savings account, and from there, a checking account. Those that listened almost always ended up with cash, a car, and a home without going into debt. How do you use money wisely? You think about it and realize that you don’t need a lot of money to live well. You just need to use the money that you have as a tool rather than a hindrance.
For example, many cash-poor people buy furniture “on time” and it costs a fortune. Case in point: it can cost $26.99 a week to rent a love seat and sofa for a 104-week term. Seriously? This is about $2807.00 by the end of a contract.
WTF? Why would anyone do this? Because people–many of them who are middle class–just think about the weekly payment. “I can come up with 26 bucks a week,” they think. But at the end of it they own nothing and have paid as much or more than the furniture is worth. Why not go to some used furniture place and pick up an inexpensive coach and loveseat? Wouldn’t this make more sense? You can even go to eBay or somewhere and get a $75 couch with free shipping. Or go to Walmart and purchase a cheap new couch and save until you can afford something better. The point is, there is never a reason if you are sleeping on the floor or in your parent’s basement if broke to buy rental furniture. But people do–all the time.
Another way people get themselves into financial trouble following the same logic is when it comes time to sell their house. How many times have you seen neighbors or others overprice their house and not react rationally as it stays on the market for years? As long as they can make the mortgage payment, they believe that they need to let the house stay on the market at the high price and want even more to pay them back for all the payments.
However, after two years of $2000 a month payments, they still seem clueless in understanding that the high price has now cost them even more than if they had sold at a lower price, particularly if they have moved.
Point out to them that they have thrown $48,000 away in mortgage payments to get an extra $20,000 on their house and they will get angry and/or think you are crazy. Most people can’t do math. Those who actually crunch the numbers will realize that it is costing them more to keep the house on the market at the high price. They might cut the price by $15,000 or so and quickly sell. The others who don’t follow the advice will lose money but will feel good about themselves but wonder why they never have any money.
Money is a tool, we can teach people how to use it. Sometimes it works.
What other suggestions do you have for others on how not to be poor? For example, good websites for cheaper items such as food etc. or tips on how to save money?
bump
The don’t even teach basic penmanship or history anymore, why teach life skills math?
Don't buy individual sized snacks for the kids. Buy in bulk and buy some baggies or small plastic containers.
Don't buy anything but gas at a gas station.
Don't eat out or order in.
Don't apply for individual store credit cards.
1. Don't do illegal drugs.
2. Graduate from High School.
3. Don't have kids until you're married.
Now, he said that you can violate one or more of these rules and still be successful, but it will be much, much harder.
Aldi’s for food.
Salvation Army for clothing. I haven’t paid more than $5 for a shirt or $7 for a pair of pants or $10 for shoes in five years. I have better quality clothing than ever. Admittedly, this is at the cost of time spent dropping in once a week on 50% off day. But if I get a $75 shirt for $3, that’s a pretty good ROI for an hour.
LOL. I still remember how to write in cursive. But I cannot really do it anymore. Muscle memory seems to have jumped ship. I type so much I think my ability to print may be going away too.
Don’t do drugs. Get and keep a job. Don’t get pregnant or get a girl pregnant until you are married and can support a family.
I violate one, in that I have a Target card. I get a lot of groceries there, anyway, and having their store card amounts to them saying, "Here, have an extra 15 or 20 bucks a month for free."
But that's a special situation. Otherwise, yeah, every other place I look has a different card, pre-approved. No wonder people get themselves into credit trouble so easily.
I was shopping for a good used car one time. I saw one on a used car lot and so I stopped to look at it. I was talking with the dealer and asked him how much. He quoted a down payment and the weekly payments. I said no, I'm paying cash. He said, no, sorry. He only sells with 20% down and small weekly payments.
Its really not a scam. If people want to pay 25% interest and 150 percent over retail for a clunker, then they ought to be allowed, right?
My husband wears all the best name brands for $3 to $5.
Stop buying liquor.
Stop buying pot.
Get a job.
Stop buying Lexus, BMW and Mercedes.
Save.
Make your boss happy.
Show up for work on time, every day.
Take public transit.
Jeez. This is simple stuff. But “the poor” fail Commons Sense 101 every single day.
Economics, shop, sewing, and cooking.
As one of the Top 5% (Income) / 1% (Wealth), I am a committed Goodwill Shopper.
There are a lot of retirees in my area. When hubby kicks the bucket the widow usually calls Salvation Army for all his stuff.
I find remarkably high quality and often basically new stuff all the time.
I’m not so sure sewing make much economic sense anymore. Last time I was in a fabric store I was shocked at how high the prices were. Combine that with the low prices for clothing and it just doesn’t make sense.
Unless possibly you have the skill to turn out custom quality stuff. And even then I’d wonder about the savings per labor hour.
I actually go to the American Cancer Society shop, where, sadly, Dad succumbed early to cancer. With lots of middle-aged guy clothes barely worn.
Sad for them. Shopping opportunity for me.
I get Alan Edmonds shoes (retail $280) for $20, and Scottish tweed sport coats for $12.
Also, their prices are too high anyway because they know they have people over a barrel because they do charge a small monthly payment and they don’t do a credit check.
I think the only way to buy a used car right now is in a private purchase.
I know! And when you consider your time it really isn’t worth it.
I used to make most of mine and my boy’s clothes, even their blue jeans but that was over 30 years ago.
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